2023 (12) TMI 1246 - AT - Insolvency and Bankruptcy

Appeal Dismissed: NCLAT Upholds Rejection of Section 9 Application Due to Pre-existing Dispute Over Diamond Payment.

Asian Diamond BVBA Versus DA Jewels Pvt. Ltd.

The NCLAT dismissed the appeal against the Adjudicating Authority's decision to reject the Section 9 application due to a pre-existing dispute. The ... Dismissal of Section 9 application - pre-existing dispute - HELD THAT:- The email sent by the Corporate Debtor indicate the entire issue raised between the parties, where the Corporate Debtor denied any outstanding amount. Further, the receipt which was claimed by the Corporate Debtor was the receipt of the diamonds received on behalf of the Appellant, which were all before the date when Demand Notice was issued. This indicate that at the time when Demand Notice was issued, there were dispute between the parties. The Adjudicating Authority has rightly rejected the Section 9 application there being a pre-existing dispute - Appeal dismissed. Issues involved: Dismissal of Section 9 application due to pre-existing dispute.Summary:The Appellate Tribunal, National Company Law Appellate Tribunal, Principal Bench, New Delhi, heard the appeal against the dismissal of the Section 9 application filed by the Appellant due to a pre-existing dispute. The Appellant claimed payment for diamonds handed over to the Corporate Debtor, who disputed the claim stating that the diamonds were already handed over in lieu of payment. The Adjudicating Authority referred to emails and receipts, concluding that there was a plausible dispute between the parties.The Appellant argued that the email relied upon by the Corporate Debtor was not addressed to them and that the Jangad receipt was not signed by the Appellant. The Appellate Tribunal considered the submissions and the record, noting the content of the emails exchanged between the parties and the disputed receipt of diamonds.The Adjudicating Authority found a plausible dispute based on the emails and receipt produced by the Corporate Debtor. The Appellant contended that the email in question was not addressed to them and that the receipt was for diamonds received on their behalf before the issuance of the Demand Notice, indicating an existing dispute at that time. Consequently, the Adjudicating Authority rightly dismissed the Section 9 application due to the pre-existing dispute. The appeal was dismissed, but the Appellant was advised to explore other legal remedies for their claim.