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The NCLAT allowed the appeal against admission of a Section 9 application, finding a clear pre-existing dispute between the parties. The Tribunal held that the corporate debtor's reply dated 28.01.2020 to the demand notice constituted a valid notice of dispute under Section 9(5)(d). The Adjudicating Authority erred by dismissing this reply despite evidence of disputes predating the demand notice, including correspondence and the corporate debtor's 21.08.2019 response to a legal notice. Following Mobilox Innovations precedent, the NCLAT concluded that the Section 9 application should not have been admitted as the dispute was not moonshine but substantiated by relevant materials on record.
The NCLAT allowed the appeal against admission of a Section 9 application, finding a clear pre-existing dispute between the parties. The Tribunal held that the corporate debtor's reply dated 28.01.2020 to the demand notice constituted a valid notice of dispute under Section 9(5)(d). The Adjudicating Authority erred by dismissing this reply despite evidence of disputes predating the demand notice, including correspondence and the corporate debtor's 21.08.2019 response to a legal notice. Following Mobilox Innovations precedent, the NCLAT concluded that the Section 9 application should not have been admitted as the dispute was not moonshine but substantiated by relevant materials on record.
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