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of <h1>Dismissal of Company Petition due to Genuine Disputes: Pre-existing Evidence Supports Corporate Debtor's Claims</h1> <h3>Krishna Hi-Tech Infrastructure Private Limited Versus Bengal Shelter Housing Development Private Limited</h3> The Tribunal dismissed the Company Petition under section 9 of the Insolvency and Bankruptcy Code, 2016, finding that genuine disputes existed between the ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- The Hon’ble Supreme Court in Mobilox [2017 (9) TMI 1270 - SUPREME COURT] has also observed that all that the Adjudicating Authority has to see at ‘the stage of Admission’ is whether there is a plausible contention which requires further investigation and that the ‘Dispute’ is not a patently feeble legal argument or an assertion of fact or a moonshine defence unsupported by tangible materials/evidence. The defence is not spurious or plainly frivolous or vexatious. The dispute very much existed between the parties way before the demand notice was sent by the Operational Creditor i.e., 13 July, 2019. Hence, the Petition is dismissed. Issues:1. Is there any Pre-existing disputeRs.Analysis & Findings:The case involved a Company Petition filed under section 9 of the Insolvency and Bankruptcy Code, 2016 by an Operational Creditor against a Corporate Debtor for non-payment of dues. The Operational Creditor, an MSME unit, had issued two purchase orders to the Corporate Debtor for civil construction works. Despite receiving part payments, the Operational Creditor claimed outstanding amounts for extra work done and invoices raised. The Corporate Debtor alleged deficiencies in work, engagement of third parties due to incomplete work, and disputed the claims made by the Operational Creditor. The main issue was whether there was a pre-existing dispute between the parties.The Tribunal referred to relevant legal precedents, including the Innoventive Industries Ltd. case and Mobilox Innovations Pvt. Ltd. case, to determine the criteria for triggering the insolvency resolution process under the Code. The Supreme Court's interpretations emphasized the importance of a pre-existing dispute to avoid insolvency proceedings. The Corporate Debtor raised disputes regarding deficiencies in work, slow progress, and defective materials, supported by email communications predating the demand notice sent by the Operational Creditor. The Tribunal found these disputes genuine and existing before the demand notice, leading to the dismissal of the Petition.In conclusion, the Tribunal dismissed the Company Petition, stating that the disputes raised by the Corporate Debtor were not frivolous but existed prior to the demand notice. The Corporate Debtor was granted the liberty to pursue other legal remedies available to them. The order was pronounced on September 12, 2022, and a certified copy was to be issued upon request and compliance with formalities.
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