Imp. Rulings - Pre-existing Disputes, Section 9 Application

 Imp. Rulings - Pre-existing Disputes, Section 9 Application

Index;

1. NCLAT (10.03.2022) in Brand Realty Services Ltd.  Vs. Sir John Bakeries India Pvt. Ltd. .[Company Appeal (AT) (Insolvency) No. 958 of 2020]

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NCLAT (10.03.2022) in Brand Realty Services Ltd.  Vs. Sir John Bakeries India Pvt. Ltd. .[Company Appeal (AT) (Insolvency) No. 958 of 2020] held that;

• The statutory scheme under Section 8 and 9 does not indicate that in an event Reply to Notice is not filed within 10 days by Corporate Debtor or no Reply to Notice under Section 8(1) have been given, the Corporate Debtor is precluded from raising the question of dispute.

• We thus are of the considered opinion that mere fact that Reply to notice under Section 8 (1) having not been given within 10 days or no reply to demand notice having been filed by the Corporate Debtor does not preclude the Corporate Debtor to bring relevant materials before the Adjudicating Authority to establish that there are pre-existing dispute which may lead to the rejection of Section 9 application.

• “…Even otherwise, mere failure to reply to the demand notice does not extinguish the rights of the Operational Creditor to show the existence of a pre-existing dispute...”

[ Link - Brand Realty Services Ltd.  Vs. Sir John Bakeries India Pvt. Ltd ]