TaxTMI 
TaxTMI 
2025 (12) TMI 1007
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....onal debt. The demand notice dated 24.04.2023 was replied by Respondent No.1 vide letter dated 29.05.2023 denying the claim. The purchase order as well as invoices were disputed. It was further pleaded that the Appellant has filed various criminal complaints under Section 138 of the Negotiable Instrument Act (NI Act) against the Respondent No.1. The cheques were deposited which were given for security. It was pleaded that dispute exists between the parties. Reply to Section 9 application was filed by Respondent No.1. Adjudicating Authority after hearing the parties by impugned order has rejected the application. Appellant aggrieved by the said order has come up in this Appeal. 3. We have heard Shri Dhiren Dave, Learned Counsel for the Appellant. 4. On 17.10.2025, Appellant was granted time to file additional affidavit to bring on record the NeSL Certificate as referred in paragraph 5 of the impugned order. Appellant filed NeSL Certificate along with additional-affidavit. On 12.11.2025, order sheet contained following order:- "12.11.2025: An Additional Affidavit has been filed by the Appellant which indicate that in the information record of the Information Utility cl....
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....RATE TRANSHEAT PVT LTD Debtor M/s SUFI INTERNATIONAL PVT. LTD. Default Amount 20868924.00 Status of Authentication by Debtor DISPUTED Reason For Dispute No such debt existed, Remarks- False information & wrong claim. We have already got stay order from honourable high court, Gujarat. This is already judicial matter. Authentication Completed on 21-10-2023 18:42:09 8. Section 9(5)(ii) of the IBC provides as follows:- "9. Application for initiation of corporate insolvency resolution process by operational creditor. - (5) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), by an order- (ii) reject the application and communicate such decision to the operational creditor and the corporate debtor, if - (d) notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility;" 9. We, in the present case, are concerned with the provision of Section 9(5)(ii)(d). Sub-clause (d) uses two expressions (i) notice of dispute has been received by the operational creditor or (ii) there is a record of dispute in the informati....
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....y (Application to Adjudicating Authority) Rules, 2016 read with Form 3 or 4, as the case may be [Section 8(1)]. Within a period of 10 days of the receipt of such demand notice or copy of invoice, the corporate debtor must bring to the notice of the operational creditor the existence of a dispute and/or the record of the pendency of a suit or arbitration proceeding filed before the receipt of such notice or invoice in relation to such dispute [Section 8(2)(a)]. What is important is that the existence of the dispute and/or the suit or arbitration proceeding must be pre-existing i.e. it must exist before the receipt of the demand notice or invoice, as the case may be. In case the unpaid operational debt has been repaid, the corporate debtor shall within a period of the self-same 10 days send an attested copy of the record of the electronic transfer of the unpaid amount from the bank account of the corporate debtor or send an attested copy of the record that the operational creditor has encashed a cheque or otherwise received payment from the corporate debtor [Section 8(2)(b)]. It is only if, after the expiry of the period of the said 10 days, the operational creditor does not either r....
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.... an application by the operational creditor, reject such application if the application is incomplete and has not been completed within the period of 7 days granted by the proviso [Section 9(5)(ii)(a)]. It may also reject the application where there has been repayment of the operational debt [Section 9(5)(ii)(b)], or the creditor has not delivered the invoice or notice for payment to the corporate debtor [Section 9(5)(ii)(c)]. It may also reject the application if the notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility [Section 9(5)(ii)(d)]. Section 9(5)(ii)(d) refers to the notice of an existing dispute that has so been received, as it must be read with Section 8(2)(a). Also, if any disciplinary proceeding is pending against any proposed resolution professional, the application may be rejected [Section 9(5)(ii)(e)]." 13. In the above paragraph, the Hon'ble Supreme Court held that "it may also reject the application if the notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility [Section 9(5)(ii)(d)]. Section 9(5)(ii)(d) refers to the notice of....
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....pute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application." 15. In the above paragraph, the Hon'ble Supreme Court has held 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. As noted above, clause (d) of Section 9(5)(ii) has two different clauses, (i) notice of dispute has been received by the Operational Creditor and (ii) there is record of dispute in the information utility. Section 9 of the IBC which entitles an operational creditor to initiate proceeding for insolvency against the Corporate Debtor contains a legislative scheme where Section 9 application is not to be entertained when debt is disputed. Present is a case where there is a record of dispute in the information utility. This Tribunal had occasion to consider Section 9(5)(ii)(d) in Company Appeal (AT) (Insolvency) No.557 of 2025- "Bhawani Prasad Mishra vs. Armaco Infralinks Pvt. Ltd. & Anr." decided on 25.04.2025. In the above case also in the record ....
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....ot in any manner dilute the requirement of Section 9(5)(ii)(d). The initiation of insolvency against the Corporate Debtor has a serious consequences and when there are sufficient material to indicate that condition as mentioned in Section 9(5)(ii)(d) are in existence, Adjudicating Authority cannot proceed to ignore the same. There can be no dispute to the proposition laid down by the Hon'ble Supreme Court in "Mobilox Innovations Private Limited vs. Kirusua Software Pvt. Ltd.- (2018) 1 SCC 353" that dispute which is contemplated in Section 8(2)(a) has to be a bonafide dispute. In paragraph 38 of the judgment of "Mobilox Innovations Private Limited" following was laid down:- "38. It is, thus, clear that so far as an operational creditor is concerned, a demand notice of an unpaid operational debt or copy of an invoice demanding payment of the amount involved must be delivered in the prescribed form. The corporate debtor is then given a period of 10 days from the receipt of the demand notice or copy of the invoice to bring to the notice of the operational creditor the existence of a dispute, if any. We have also seen the notes on clauses annexed to the Insolvency and Bankruptc....