An operational creditor's Section 9 application was rejected on...

An operational creditor's Section 9 application was rejected on the ground of a pre-existing dispute. Applying Mobilox, the tribunal held that where the corporate debtor has raised a plausible dispute supported by contemporaneous material, the insolvency process cannot be triggered. Here, the claim was repudiated in writing prior to the demand notice and again in the reply to the demand notice, constituting a "notice of dispute" under Section 9(5)(ii)(d), and the defence was not moonshine. Further, alleged salary defaults falling within the Section 10A period could not found a Section 9 proceeding. The rejection of the Section 9 application and dismissal of the appeal were upheld - NCLAT

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