Appellate Tribunal Dismisses Appeal, Upholds Rejection of Application Due to Pre-Existing Dispute and No Debt Acknowledgment.

The Appellate Tribunal upheld the rejection of an application under Section 9 due to a pre-existing dispute between the parties. The Adjudicating Authority found that the Corporate Debtor had consistently denied any payment obligation, as evidenced by a letter dated 04.02.2021 and a response to a Demand Notice. Despite the Appellant's claims of debt acknowledgment, the Tribunal agreed with the Authority's finding that no error was present in the decision, and the appeal was dismissed, affirming the absence of a clear debt acknowledgment.

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Issues involved:
The rejection of the application under Section 9 based on a pre-existing dispute.

The Appellate Tribunal considered the appeal against the rejection of the application under Section 9 due to a pre-existing dispute. The Appellant argued that the debt was acknowledged by the Corporate Debtor even after the Demand Notice, contending that the rejection was unwarranted. The Adjudicating Authority referred to a letter from the Corporate Debtor stating no liability to pay, leading to the rejection of the application.

Upon reviewing the submissions and records, the Adjudicating Authority highlighted a letter from the Corporate Debtor dated 04.02.2021, where it was mentioned that no charge was payable for the bill raised by the Operational Creditor. Despite a meeting to clarify the charge, the Corporate Debtor denied the payment obligation, leading to a notice of dispute. The Authority rejected the application based on this pre-existing dispute, a decision upheld by the Appellate Tribunal.

The Corporate Debtor responded to a Demand Notice by the Operational Creditor, reiterating the absence of any due amount. This response, along with the earlier letter denying the payment obligation, led to the rejection of the Section 9 application. The Tribunal found no error in the Authority's decision, emphasizing that the debt was not acknowledged despite certain acknowledgments in other proceedings. The appeal was ultimately dismissed, with no merit found in the Appellant's arguments.

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