NCLT JUDGEMENT ON RULE 5, 6 OF THE INSOLVENCY AND BANKRUPTCY (APPLICATION TO ADJUDICATING AUTHORITY) RULES, 2016 AND SECTION 4, 8, 8(1), 8(2), 8(2)(A), 9, 9(3) (B), 9(5), 9(5)(2)OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016


Micra Systems Private Limited Vs. Masters India Private Limited, (2020) 05 NCLT CK 0002

NCLT dismissed the application filed by Petitioner/Operational Creditor under Section 9 of the IBC, 2016 read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, praying therein to initiate CIRP against the Respondent/Corporate Debtor. While dismissing the application NCLT held that therefore, if we shall consider the case in hand in the light of the decisions then we find that in the case in hand also there is a pre-existing dispute between the parties regarding the terms and conditions of the agreements, payments of the salaries, engagement of the employees and other issues. Hence in view of Section 9(5)(2) of IBC, 2016, if notice of disputes has been received by the Operational Creditor or there is a record of disputes in the information utility in that case the adjudicating authority has no option but to reject the application. Here, in the case in hand, as we have already stated that there is an existence of disputes raised by the Corporate Debtor prior to the issuance of the demand notice, of course, by filing section 9(3) (b), the Operational Creditor claimed that no notice of disputes has been raised by the Corporate Debtor but for the reasons discussed above, we find that the affidavit shown by the Operational Creditor under Section 9(3) (b) is not in consonance with the averment made in the application filed by the Operational Creditor in which he claimed that the Corporate Debtor by filing the reply raised the disputes on the point that the legal notice had already been sent to the Operational Creditor by Corporate Debtor prior to the issuance of the demand notice.

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