2017 (11) TMI 1640

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....r Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "I & B Code") for initiation of 'Corporate Insolvency Resolution Process' against the Appellant - M/s. Ksheeraabad Constructions Pvt. Ltd. ('Corporate Debtor'). By impugned order dated 29th August, 2017 passed by Adjudicating Authority (National Company Law Tribunal), Hyderabad Bench, Hyderabad in CP(IB) No. 100/9/HDB/2017, the application having been admitted, order of moratorium having been passed and in view of appointment of Insolvency Resolution Professional', present appeal has been preferred by the 'Corporate Debtor'. 2. The main plea taken by the Appellant-'Corporate Debtor' is that there is an 'existence of a....

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....s been received by the operational creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to the notice of the operational creditor the "existence" of a dispute or the fact that a suit or arbitration proceeding relating to a dispute is pending between the parties. Therefore, all that the adjudicating authority is to see at this stage is whether there is a plausible contention which requires further investigation and that the "dispute" is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster. However, in doing so, the Court does not need to be satisfi....

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....pers and Inter-trade P. Ltd. Vs. AMCI (I) (P) (Ltd.) - 2009 (7) SCC 796. 7. On the other hand, according to counsel for the Respondent-'Operational Creditor', the Award having been passed, the dispute stand decided and the award amount is a debt payable to the 'Operational Creditor'. 8. It was submitted that the Appellant never raised any dispute prior to notice under sub-section (1) of Section 8 of the I & B Code', therefore, it cannot be termed as dispute in existence. Reliance has been placed on decision of this Appellate Tribunal in 'M/s. Annapurna Infrastructure Put. Ltd. and Anr. Vs. M/s. SORIL Infra Resource Ltd. - Company Appeal (AT) (Insolvency) No. 32 of 2017' wherein the Appellate Tribunal held:- "3....

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....esaid, while we hold that the finding of the learned Adjudicating Authority insofar as it relates to 'award', 'default of debt' and the 'alternative remedy', are not based on sound principle and against the provisions of law, we refrain to decide the question as to whether the 1st appellant is an 'operational creditor' or not which is first required to be decided by learned Adjudicating Authority. 41. For the aforesaid reasons, we set aside the impugned order dated 24th March, 2017 and remit the case to the learned Adjudicating Authority, Principal Bench, New Delhi to decide as to whether the 1st appellant is an 'operational creditor' and if so, whether the application under Sec. 9 preferred by the a....

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....ne of the aforesaid conditions is lacking, the application would have to be rejected. 36. Apart from the above, the adjudicating authority must follow the mandate of Section 9, as outlined above, and in particular the mandate of Section 9(5) of the Act, and admit or reject the application, as the case may be, depending upon the factors mentioned in Section 9(5) of the Act." 11. The question arises for consideration, whether pendency of a case before a Court under Section 34 of the Arbitration and Conciliation Act, 1996 can be termed to be 'dispute in existence' for the purpose of sub-section (6) of Section 5 of the 'I & B Code'. 12. It is true that under Section 36 of the Arbitration and Conciliation Act, 1996, an Arbitra....