Union Roadways Limited Vs Ice Steel 1 Private Limited (NCLAT Delhi)
NCLAT Delhi held that application under section 9 of the Insolvency and Bankruptcy Code [IBC] rightly rejected on account of pre-existing dispute between Operational Creditor and Corporate Debtor. Accordingly, order of Adjudicating Authority upheld.
Facts- The present appeal filed under Section 61 of Insolvency and Bankruptcy Code 2016 by the Appellant arises out of the Order dated 04.09.2024 passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench-V). By the impugned order, the Adjudicating Authority has dismissed Section 9 application filed by the Appellant-Operational Creditor. Aggrieved by the impugned order, the present appeal has been preferred by the Appellant.
Conclusion- Held that it is well settled that in Section 9 proceedings the Adjudicating Authority is not to enter into final adjudication with regard to existence of dispute between the parties regarding operational debt. Section 9 proceedings cannot be converted into proceedings for adjudication of disputes between the parties. What has to be looked into is whether the defence raises a dispute which needs further adjudication by a competent court. Disputes pertaining to contractual issues are not to be resolved in Section 9 proceedings. We are of the considered view that present is a case where pre-existing disputes between the parties is writ large. In the given facts and circumstances, this is not a case where the Adjudicating Authority could have admitted the Section 9 application. Hence, there was no error committed by the Adjudicating Authority in rejecting the Section 9 application.
