TaxTMI 
TaxTMI 
2019 (7) TMI 1188
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.... filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 ("I&B Code" for short) against 'Raheja Developers Limited'- ('Corporate Debtor'). The Adjudicating Authority (National Company Law Tribunal), New Delhi Bench, New Delhi, by impugned order dated 19th September, 2018 after discussing the case on merit, rejected the application on the ground that the claim of the Appellant falls within the ambit of 'disputed claim'. 2. The Adjudicating Authority also observed that the arbitration proceedings in respect of the same cause of action has been initiated. 3. Learned counsel appearing on behalf of the Appellant submitted that as on the date of issuance of demand notice under Section 8(1), no arbitration proceeding....
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....t August, 2017 were baseless and unsubstantiated. 8. According to the Appellant, subsequently the Appellant raised R.A. Bill No. 21 on 25th October, 2017 for plumbing work executed by the Appellant and certified by the Respondent. Another R.A. Bill No. 22 for 'plumbing work' was executed by the Appellant which was also certified by the Respondent on 23rd February, 2018. 9. On 5th March, 2018, an e-mail was again sent by Appellant for pending WCT certificates for the period from 2014-15 onwards, followed by e-mail dated 22nd March, 2018 requesting the 'Corporate Debtor' to release long pending dues of Rs. 5.50 Crores and drawing attention of the Respondent of non-compliance of statutory requirements. 10. It is only on failure of pay....
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....l Conditions of the Contract'. 14. From bare perusal of the impugned order dated 19th September, 2018, it will be evident that the Adjudicating Authority have noticed the aforesaid disputed fact to come to the conclusion and hold that the claim amount raised by the Appellant is a disputed claim. 15. In an application under Section 9, it is always open to the 'Corporate Debtor' to point out pre-existence of dispute. It is to be shown that the dispute was raised prior to the issuance of demand notice under Section 8(1). 16. In "Mobilox Innovations Pvt. Ltd. Vs. Kirusa Software (P) Limited− 2017 1 SCC OnLine SC 353", the Hon'ble Supreme Court held that the 'existence of the dispute' and/or the suit or arbitration proceeding must....
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....he adjudicating authority, when examining an application under Section 9 of the Act will have to determine: (i) Whether there is an "operational debt" as defined exceeding Rs. 1 lakh? (See Section 4 of the Act) (ii) Whether the documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not yet been paid? and (iii) Whether there is existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid operational debt in relation to such dispute? If any one of the aforesaid conditions is lacking, the application would have to be rejected. Apart from the above, ....
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....the meaning of "debt", we have to go to Section 3(11), which in turn tells us that a debt means a liability of obligation in respect of a "claim" and for the meaning of "claim", we have to go back to Section 3(6) which defines "claim" to mean a right to payment even if it is disputed. The Code gets triggered the moment default is of rupees one lakh or more (Section 4). The corporate insolvency resolution process may be triggered by the corporate debtor itself or a financial creditor or operational creditor. A distinction is made by the Code between debts owed to financial creditors and operational creditors. A financial creditor has been defined under Section 5(7) as a person to whom a financial debt is owed and a financial debt is defined ....
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....itration proceeding was initiated by the Respondent vide notice dated 24th May, 2018 i.e. after about one month from the date of issuance of demand notice under Section 8(1) which was issued on 28th April, 2018. Therefore, the 'Corporate Debtor' cannot rely on arbitration proceeding to suggest a pre-existing dispute. There is nothing on the record to suggest that the 'Corporate Debtor' raised any pre-existing dispute relating to quality of work performed by Appellant. The ground of delay in execution of work cannot be noticed to deny admission of application under Section 9, the 'Corporate Debtor' having allowed the Appellant to execute the work and certified all the bills. 22. The Adjudicating Authority wrongly rejected the claim on the....