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2024 (5) TMI 726 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHIRejection of section 9 application - Initiation of CIRP - prior dispute in relation to existence of debt or not - whether there was a pre-existing dispute between the two parties with regard to the operational debt? - HELD THAT:- In the present case, from material on record, it is clear that the demand notice was issued by the Operational Creditor on 12.07.2022 and no notice of dispute was raised by the Corporate Debtor. The argument of the Corporate Debtor is not persuasive that the notice was not effectively served upon him for reasons spelt out by the Adjudicating Authority in para 5.3.1 of the impugned order - The statutory scheme of IBC in such circumstances pretty much entitled the Operational Creditor to file an application under Section 9 and this is exactly the course of action followed by the Operational Creditor and we therefore find nothing wrong in this course of action. It is only at this stage when the Operational Creditor moved an application before the Adjudicating Authority under Section 9 that the Corporate Debtor has endeavoured to protect its interests and raised the issue of pre-existing disputes. In the present case, it is contended by the Corporate Debtor that there is no valid and legal claim to receive payment. The issue of proforma invoice in place of debit note has been voiced by the Corporate Debtor as tantamount to breach of contractual obligations and therefore held by the Adjudicating Authority to be yet another ground of dispute. Where operational creditor seeks to initiate insolvency process against a Corporate Debtor, it can only be done in clear cases where no real dispute exists between the two which however is not so borne out by the facts of the present case. That pre-existing dispute was very much there is amply supported by material on the record. Such contractual disputes require further investigation and cannot be considered by the Adjudicating Authority in the exercise of their summary jurisdiction. And for such disputed amounts, Section 9 proceeding under IBC cannot be initiated at the instance of the Operational Creditor. Keeping in view that the present facts of the case indicates that the operational debt is disputed, the Adjudicating Authority has therefore correctly rejected the Section 9 application. The Adjudicating Authority did not commit any error in rejecting the Section 9 application filed by the Appellant. There is no merit in the Appeal. Appeal is dismissed.
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