Case Note

S. Name of the Case Principal Relevant Paragraphs

No.
1. Ahluwalia Contracts Delay There is nothing on the record to suggest that the
(India) Limited cannot be
‘Corporate Debtor’ raised any pre-existing dispute
v. a ground
Raheja Developers for pre- relating to quality of work performed by Appellant.
Limited existing
The ground of delay in execution of work cannot be
Dispute
NCLAT noticed to deny admission of application under Section
Company Appeal
9, the ‘Corporate Debtor’ having allowed the
(AT) (Insolvency) No.
703 of 2018 Appellant to execute the work and certified all the
bills. @para.21
2. Naik Environment v. Pre - It is clear that such notice must bring to the notice of
India Bulls Existing the operational creditor the “existence” of a dispute or
Constructions Dispute the fact that a suit or arbitration proceeding relating to
must be a dispute is pending between the parties. Therefore, all
NCLAT genuine
that the adjudicating authority is to see at this stage is
[Company Appeal whether there is a plausible contention which requires
(AT) (Insolvency) No. further investigation and that the “dispute” is not a
790 of 2019] patently feeble legal argument or an assertion of fact
unsupported by evidence. @para.14 (Paragraph of
Mobilox judgement was quoted)

3. GT Polymers v. Pre - We find that in this case in reply to the notice the
Keshava Medi Existing Respondent has raised a vague and baseless allegation
Devices Pvt. Ltd. Dispute against the Appellant which are not supported by any
must be documentary evidence. Therefore, we are of the view
NCLAT genuine
that the dispute is spurious or hypothetical, hence the
[Company Appeal Adjudicatory Authority has to reject such defence.
(AT) (Ins) No. 1266 @pa.16
of 2019]
The Adjudicating Authority wrongly rejected the
claim on the ground that the claim raised by the
Appellant falls within the ambit of disputed claim.
Merely disputing a claim cannot be a ground, as held
by the Hon’ble Supreme Court in Innovative
Industries Ltd Vs ICICI Bank and Anr. wherein it is
observed that “claim means a right to payment even it
is disputed. The Code gets triggered the moment the
default of Rs.1 Lakh or more”. @para.20
4. P Vijay Kumar v. Corporate The ground raised to offset the triggering of Corporate
Priya Trading Debtor Insolvency Resolution Process at the instance of ‘Priya
Company cannot Trading Company’ as Operational Creditor’ by taking
take the plea of there being no privity of contract between the
NCLAT plea of
lack of ‘Operational Creditor’ and the ‘Corporate Debtor’
 [Company Appeal privity of falls flat and has to be dismissed as being absurd and
(AT) (Insolvency) No. contract repugnant to the admitted position in regard to the
204 of 2019] status and locus standi of the ‘Operational Creditor’.
Contention raised on this score is rebuffed. @para. 6

Further the paragraph of Mobilox Innovations(SC) was

cited which says Pre existing dispute must not be a
feeble legal argument or an assertion of fact
unsupported by evidence. @para.2
5. KB Polychem (India) Pre- Paragraph of Mascot Petrochem Private Limited Vs.
Ltd. v. Kaygee existing Midaas Construction Company Private Limited [ CP
Shoetech Private dispute (IB) No.1692/KB/2018] was cited:
Limited
“The strict onus lies on the shoulders of Corporate
NCLAT Debtor to show the existence of dispute before
delivery of notice u/s 8, otherwise the purpose of
[Company Appeal section 8 and 9 proceeding would get defeated if
(AT) (Insolvency) No. frivolous contentions of Corporate Debtor are
1010 of 2019] accepted” @para.2

The Appellant has given sufficient evidence to show

the delivery of demand notice. There is no specific
denial of service of demand notice. The corporate
debtor has itself stated that in reply to the demand
notice, he had raised the dispute of unpaid operational
debt. But no document is placed before us to show the
existence of dispute before issuance of demand notice.
Copy of invoices, demand notice, bank statement all
other documents are placed before us which clearly
shows that the corporate debtor failed to pay off the
operational debt of more than Rs One Lac, despite
service of demand notice. @Third Last paragraph

6. KSB Shangai Pump

Co. Ltd. v. Lanco
Infratech Ltd.