- 14 Nov, 2023
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Amrop India Private Limited v. The Hi-Tech Gears Limited (Company Appeal (AT)(Insolvency) No. 1251 of 2023)
Facts:
– Operational Creditor Amrop India Pvt Ltd sent notice to Corporate Debtor Hi-Tech Gears Ltd demanding payment of Rs. 29 lakhs for recruitment services.
– Corporate Debtor replied disputing the claim due to deficiencies in services and raised a counter claim of Rs. 1.37 crores.
– Operational Creditor filed Section 9 application for initiation of CIRP against Corporate Debtor.
– NCLT rejected the application on the ground of existence of pre-existing dispute between the parties regarding deficiencies in services.
Court’s Elaborate Opinion:
– The dispute must relate to the debt claimed and must exist at the time of Section 8 notice or Section 9 application for it to be a valid ground of rejection.
– The tone and tenor of emails exchanged between parties before Section 8 notice clearly show existence of disputes regarding deficiencies in services by Operational Creditor.
– The payment was made contingent on resolution of performance issues which shows pre-existing dispute.
– Section 9 proceeding cannot be initiated for disputed operational debts.
– The Adjudicating Authority rightly concluded that conditions of Section 9 were not fulfilled due to existence of pre-existing dispute.
Sections:
Section 8 – Requirements for demand notice by Operational Creditor
Section 9 – Requirements for application for initiation of CIRP by Operational Creditor
Section 9(5)(ii) – Grounds for rejection of application, including existence of dispute
Referred Cases:
Aroon Kumar Aggarwal v. ABC Consultants Pvt. Ltd. – Distinguished on facts regarding nature of dispute.
