TaxTMI 
TaxTMI 
2026 (5) TMI 1604
X X X X Extracts X X X X
X X X X Extracts X X X X
....been filed. On 12.05.2026, we have passed an interim order that IRP shall not take any steps in pursuance of the impugned order. 2. Brief facts of the case necessary to be noticed for deciding the Appeal are:- 2.1. The Corporate Debtor and the Operational Creditor had a long- standing commercial relationship. The Corporate Debtor issued multiple purchase orders to the Operational Creditor for supply of automobile-grade adhesive products for two-wheelers between February 2025 to April 2025. Operational Creditor supplied goods and raised invoices aggregating to Rs. 9,74,86,143/-. The Operational Creditor sent an e-mail on 21.04.2025 alleging overdue payments. Corporate Debtor on 22.04.2025 released a payment of Rs. 3,10,73,278/-. Operational Creditor instead of resuming supply, demanded a further sum of Rs. 2,38,00,000/- before any supplies could be made. On 16.05.2025, the Operational Creditor responded with commercially unreasonable conditions for resuming supplies. On 19.06.2025, Corporate Debtor communicated to the Operational Creditor that there are pre-existing disputes between the parties. On 20.06.2025, the Operational Creditor issued a demand notice under Section 8 cla....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt submits that the Commercial Suit was filed subsequent to 1st demand notice but prior to issuance of 2nd demand notice. 2nd demand notice was issued since the NeSL record of default in the NeSL was received after issuance of the 1st demand notice. 6. We have heard the Counsel for the parties and perused the record. Sections 8 and 9 of the IBC contain a statutory scheme for filing a Section 9 application. The Hon'ble Supreme Court in its judgment in "Mobilox Innovations (P) Ltd. v. Kirusa Software (P) Ltd., (2018) 1 SCC 353" has laid down the guiding principle for entertaining Section 9 application. In paragraphs 34 and 51 of the judgment, following was laid down:- "34. Therefore, the 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 a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntec.com.sg> <[email protected]>; Anand Barge <[email protected]> Cc: [email protected] <[email protected]>; Rohit Dalal Subject: Re: Lintec Out Standing Payment Dear Mr. Junpei Odaka, I confirm receipt of your email. I deny the contents of your email and nothing contained in your email shall be deemed to be admitted. I am in the process of collating relevant information and records, assessing the matter internally and preparing a detailed response. You are well aware that there are pre- existing disputes between the parties, and in any case, your demand is premature. We will issue a detailed response to your email shortly and expressly reserve all our rights in this regard. Regards, Salil Musale Managing Director Website: naxnova.com" 8. The above facts make it clear that there was communication on behalf of the Corporate Debtor about dispute between the parties even before issuance of the demand notice. Demand notice was immediately replied by the corporate debtor on 30.06.2025 refuting the claim. It is useful to notice relevant paragraph of the reply to demand notice dated 30.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... deteriorated in recent years, with multiple serious issues repeatedly raised by our Client Key instances include the internal rejection of LC 3080 LB film due to poor ink anchorage on July 12, 2022; rejection of 600 printed sheets caused by shiny particles on October 23, 2023; and blistering issues on ABS components reported on February 11, 2025 Additionally, on April 27, 2024, Quality Failure Report was issued due to persistent ink peel-off in HLS Bright Brush Chrome film, followed by a notification on May 16, 2024, confirming that all technical countermeasures had failed. A critical customer complaint concerning 25-micron film was recorded on March 10, 2025. Furthermore, on April 2 2025, Lintec supplied material with an incorrect logo liner in breach of our Client's specifications and refused to replace it, citing unavailability of stock. These recurring failures have caused significant disruptions to our Client's production schedules, delayed deliveries to key customers, and severely damaged our Client's reputation as a reliable "just-in-time" supplier to major customers. The resulting losses far exceed the amount Lintec now claims, which is not only unjustified but....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ice of dispute was issued by the corporate debtor within 10 days from receipt of the demand notice and there was also record of dispute in NeSL record where status was mentioned as disputed. We may refer to the judgment of this Tribunal in Company Appeal (AT) (Insolvency) No. 557 of 2025- "Bhawani Prasad Mishra Versus Armaco Infralinks Pvt. Ltd. & amp; Anr." decided on 25.04.2025 where this Tribunal has held that when the status of NeSL record mention the dispute, Adjudicating Authority cannot proceed to admit Section 9 application. Relevant paragraphs of the judgment are as follows:- "28. When we look into Section 9(5)(ii)(d) there are two circumstances under which Section 9 application deserves to be rejected i.e. (i) notice of dispute has been received by operational creditor or (ii) there is record of dispute in the Information Utility. In the present case, both the above clauses are fully met since notice of dispute has been received by operational creditor and there is record of dispute in the Information Utility. The record of dispute in the Information Utility as extracted above was information which was submitted by 'Armaco Infralinks Pvt. Ltd.' for authen....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to the Insolvency and Bankruptcy Bill of 2015, in which "the existence of a dispute" alone is mentioned. Even otherwise, the word "and" occurring in Section 8(2)(a) must be read as "or" keeping in mind the legislative intent and the fact that an anomalous situation would arise if it is not read as "or". If read as "and", disputes would only stave off the bankruptcy process if they are already pending in a suit or arbitration proceedings and not otherwise. This would lead to great hardship; in that a dispute may arise a few days before triggering of the insolvency process, in which case, though a dispute may exist, there is no time to approach either an Arbitral Tribunal or a court. Further, given the fact that long limitation periods are allowed, where disputes may arise and do not reach an Arbitral Tribunal or a court for up to three years, such persons would be outside the purview of Section 8(2) leading to bankruptcy proceedings commencing against them. Such an anomaly cannot possibly have been intended by the legislature nor has it so been intended. We have also seen that one of the objects of the Code qua operational debts is to ensure that the amount of such debts, which is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ine and mere bluster. The notice of dispute in detail has given the facts which cannot be said to be unsupported by any evidence. Observation of the Adjudicating Authority that the dispute raised is a moonshine. Learned Counsel for the Appellant has also relied on judgment of this Tribunal in Company Appeal (AT) (Insolvency) No. 115 of 2024- "Innovators Cleantech Private Limited vs. Pasari Multi Projects Private Limited" where this Tribunal held that the 2nd demand notice has to be treated as fresh demand notice and Civil Suit filed prior to issuance of 2nd demand notice shall qualify on pre-existing dispute. In paragraphs 15 and 16 of the judgment, following was held:- "15. Given this factual backdrop that the demand notice of 12.02.2019 under Section 8 of the IBC was withdrawn, we now proceed to analyse whether the second demand notice of 25.04.2019 can be held to be in continuation of the first demand notice or a fresh notice. We find that that the second demand notice itself mentions of being a "fresh notice". The second demand notice also nowhere mentions that it was a continuation of the first demand notice. In such circumstances, there is force in the contention of ....