Appellate Tribunal Upholds Decision on Section 9 Application, Emphasizes Pursuing Legal Remedies

The Appellate Tribunal upheld the Adjudicating Authority's decision to reject the Section 9 Application due to a pre-existing dispute between the parties regarding the rates of Silica Sand supplied by the operational creditor. The Tribunal emphasized that legal remedies could be pursued through appropriate channels for debt recovery, leading to the dismissal of the Appeal and upholding of the Impugned Order without interference.

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Issues involved:
The judgment involves the rejection of a Section 9 Application by the Adjudicating Authority based on the existence of a pre-existing dispute between the parties.

Details of the Judgment:

Issue 1: Existence of Pre-existing Dispute
The Adjudicating Authority rejected the Section 9 Application due to a pre-existing dispute between the parties. The operational creditor filed an affidavit stating that no notice was given by the corporate debtor under Section 8(2)(a) of the Insolvency and Bankruptcy Code, 2016, and no payment was made towards the debt. The corporate debtor had filed a civil suit for recovery before receiving the demand notice. The Adjudicating Authority found that there was a dispute regarding the rates of Silica Sand supplied by the operational creditor, leading to the rejection of the Section 9 Application.

Issue 2: Appellant's Argument
The Appellant argued that the civil suit filed by the corporate debtor should not be considered a pre-existing dispute as the Section 8 Notice was issued before the suit was initiated. The Appellant contended that they voluntarily reduced the rates, which should not be deemed a pre-existing dispute. However, the Adjudicating Authority found that the facts, including a meeting between the parties to settle issues and an email sent by the Appellant regarding rates, indicated the existence of a pre-existing dispute.

Decision and Conclusion
The Appellate Tribunal upheld the decision of the Adjudicating Authority, stating that the rejection of the Section 9 Application was justified due to the pre-existing dispute between the parties. The Tribunal emphasized that the Appellant could seek legal remedies through appropriate channels for debt recovery. Therefore, the Appeal was dismissed, and the Impugned Order was upheld without interference.

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