NCLAT allowed the appeal and set aside the adjudicating...

NCLAT allowed the appeal and set aside the adjudicating authority's order admitting the Section 9 application, holding that a clear pre-existing dispute existed and a civil suit filed by the operational creditor, claiming the same sum as in the demand notice, was pending prior to issuance of the notice. The Tribunal found the corporate debtor's defence was plausible and not a feeble or unsupported contention; notice of the suit was placed before the operational creditor and the adjudicating authority. Under the scheme of Sections 8 and 9 (including Section 9(5)(ii)(d)), admission was impermissible where suit/arbitration predates the demand notice, so the Section 9 admission was erroneous.

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