Pre-existing dispute bars Section 9 insolvency admission where correspondence and complaints show a real dispute before notice.

Documentary correspondence, police complaints and other communications showed that a dispute over possession of the leased premises and outstanding dues had arisen before the demand notice was issued. Applying the settled test of whether there is a real and plausible pre-existing dispute, the materials demonstrated that the dispute was not an afterthought and was already alive when insolvency was invoked. As a genuine dispute existed on both liability and possession, the Section 9 petition was not maintainable and was rightly rejected.

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Issues: Whether a pre-existing dispute existed between the parties so as to bar admission of the Section 9 insolvency petition.

Analysis: The record showed documentary correspondence, police complaints, and communications concerning possession of the leased premises and the outstanding dues before issuance of the demand notice. The dispute between the parties was not an afterthought and was already alive when the insolvency process was invoked. Applying the settled test that the adjudicating authority must see whether there is a real and plausible dispute, the materials disclosed a genuine pre-existing dispute relating to both liability and possession issues. In such a situation, the petition under Section 9 was not maintainable.

Conclusion: The existence of a pre-existing dispute is established and the Section 9 petition was rightly rejected.

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