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Insolvency plea couldn’t be rejected over claims disputed after issuance of demand notice: NCLAT

July 30, 2019[2019] 107 403 (NCLAT- New Delhi)

IBC : Where corporate debtor Raheja Developers Limited had defaulted to pay more than Rs. 1 Lakh and there was no pre-existing dispute between parties, and record being complete, application under section 9 preferred by appellant 'Ahluwalia Contracts (India) Limited' was to be admitted

• 'Corporate Debtor' could not have relied on arbitration proceeding to suggest a pre-existing dispute as arbitration proceeding was initiated by corporate debtor after about one month from date of issuance of demand notice under section 8(1).

• Further, there was nothing on record to suggest that corporate debtor raised any pre-existing dispute relating to quality of work performed by appellant.

• Hence, in absence of any existence of a dispute between parties or record of pendency of a suit or arbitration proceeding filed before receipt of demand notice of unpaid 'operational debt', application under section 9 was required to be admitted.

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