Appeal dismissed due to pre-existing dispute; fraud issue deferred to competent Court.

The appeal was filed against the rejection of the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, due to a pre-existing dispute. The delay in filing the appeal was condoned by the Tribunal. The Tribunal noted the presence of the pre-existing dispute as crucial in the rejection of the application. Allegations of fraud by the respondent were made, but the Tribunal clarified that the issue of fraud was not within its purview. The appeal was dismissed, emphasizing that the rejection was justified due to the pre-existing dispute, and the question of fraud would be decided by the Court of competent jurisdiction.

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Issues:
- Appeal against rejection of application under Section 9 of the Insolvency and Bankruptcy Code, 2016 due to a pre-existing dispute.
- Condonation of delay in preferring the appeal.
- Allegation of fraud by the respondent.

Analysis:
1. The appeal was filed by the Operational Creditors against the order of the Adjudicating Authority rejecting the application under Section 9 of the Insolvency and Bankruptcy Code, 2016. The appeal was filed with a delay of 12 days, which was condoned by the Tribunal after being satisfied with the grounds presented by the Appellants.

2. The Tribunal noted that a demand notice under Section 8(1) was issued on 29th January, 2018, but prior to this, on 4th December, 2017, the respondent had intimated the appellants about defective fabrics via a WhatsApp message. This pre-existing dispute was crucial in the decision-making process of the Adjudicating Authority in rejecting the application under Section 9 of the I&B Code.

3. The Tribunal acknowledged the presence of a pre-existing dispute as the reason for the rejection of the application. The counsel for the appellants alleged fraud on the part of the respondent, claiming that the respondent falsely stated that defective fabrics were returned by courier. However, the Tribunal clarified that the issue of fraud in the return of fabrics was not within its purview, as it was subsequent to the pre-existing dispute communicated via WhatsApp message.

4. The Tribunal emphasized that the Adjudicating Authority rightly rejected the application under Section 9 of the I&B Code due to the pre-existing dispute. The Tribunal did not delve into the question of whether fraud was committed during the return of fabrics, stating that this matter would be decided by the Court of competent jurisdiction. Consequently, the appeal was dismissed, and no costs were awarded in the matter.

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