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NCLAT allowed the appeal, set aside the impugned order admitting a Section 9 application, and directed that the Corporate Debtor be released from the rigours of CIRP. The Tribunal held that the Corporate Debtor had raised a plausible pre-existing dispute in its reply to the Section 8 demand notice-specifically disputing that a Rs.5 lakh payment constituted part-payment for the printer-and that the AA erred in ignoring that discernible dispute. Because the dispute was not a sham and its resolution would require evidence and adjudication beyond the AA's summary jurisdiction under the IBC, admission under Section 9 was improper. The Operational Creditor remains free to pursue alternative remedies in appropriate fora.
NCLAT allowed the appeal, set aside the impugned order admitting a Section 9 application, and directed that the Corporate Debtor be released from the rigours of CIRP. The Tribunal held that the Corporate Debtor had raised a plausible pre-existing dispute in its reply to the Section 8 demand notice-specifically disputing that a Rs.5 lakh payment constituted part-payment for the printer-and that the AA erred in ignoring that discernible dispute. Because the dispute was not a sham and its resolution would require evidence and adjudication beyond the AA's summary jurisdiction under the IBC, admission under Section 9 was improper. The Operational Creditor remains free to pursue alternative remedies in appropriate fora.
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