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NCLAT dismissed the appeal and affirmed the Adjudicating Authority's rejection of the Section 9 application filed by the operational creditor. The Tribunal held that a statutory prerequisite under Section 8 requires communication of any dispute within ten days of the demand notice, but where a bona fide dispute is communicated prior to the filing of a Section 9 petition it retains relevance even if sent after the ten-day window. On the facts, the corporate debtor's notice of dispute pre-dated the Section 9 filing and evidence showed a pre-existing commercial dispute arising from prior purchase orders, thereby disentitling the operational creditor to initiate insolvency proceedings. Other pleaded defenses (limitation, assignment) were held unnecessary to adjudicate. Appeal dismissed.
NCLAT dismissed the appeal and affirmed the Adjudicating Authority's rejection of the Section 9 application filed by the operational creditor. The Tribunal held that a statutory prerequisite under Section 8 requires communication of any dispute within ten days of the demand notice, but where a bona fide dispute is communicated prior to the filing of a Section 9 petition it retains relevance even if sent after the ten-day window. On the facts, the corporate debtor's notice of dispute pre-dated the Section 9 filing and evidence showed a pre-existing commercial dispute arising from prior purchase orders, thereby disentitling the operational creditor to initiate insolvency proceedings. Other pleaded defenses (limitation, assignment) were held unnecessary to adjudicate. Appeal dismissed.
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