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NCLAT dismissed the appeal and affirmed the Adjudicating Authority's rejection of the Section 9 petition. The Tribunal held that the Corporate Debtor had raised a pre-existing dispute (account reconciliation, quality and discount issues) prior to issuance of the Section 8 demand notice and within the statutory period for notifying disputes, such that the dispute was neither spurious nor illusory. The panel found the record of prior communications and post-reconciliation payments insufficient to negate the existence of a bona fide dispute. Applying established law on pre-existing disputes, NCLAT concluded there was no infirmity in the impugned order and therefore dismissed the appeal.
NCLAT dismissed the appeal and affirmed the Adjudicating Authority's rejection of the Section 9 petition. The Tribunal held that the Corporate Debtor had raised a pre-existing dispute (account reconciliation, quality and discount issues) prior to issuance of the Section 8 demand notice and within the statutory period for notifying disputes, such that the dispute was neither spurious nor illusory. The panel found the record of prior communications and post-reconciliation payments insufficient to negate the existence of a bona fide dispute. Applying established law on pre-existing disputes, NCLAT concluded there was no infirmity in the impugned order and therefore dismissed the appeal.
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