The NCLAT upheld the Adjudicating Authority's rejection of the...

The NCLAT upheld the Adjudicating Authority's rejection of the Section 9 application filed by the Operational Creditor against the Corporate Debtor, finding a genuine pre-existing dispute. The first demand notice was withdrawn due to errors and the subsequent notice was treated as a fresh notice. Importantly, a civil suit filed prior to the second demand notice constituted a bona fide pre-existing dispute, communicated before the Section 8 notice. The Tribunal affirmed that the existence of such dispute bars the maintainability of a Section 9 application. The Adjudicating Authority correctly exercised its summary jurisdiction, refraining from detailed adjudication, and appropriately concluded that the dispute required resolution by a competent civil forum. The appeal was dismissed as devoid of merit, confirming that summary proceedings under IBC cannot override established pre-existing disputes.

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