Whether dispute raised by OC is bar for acceptance of petition under IBC

By CS Divesh Goyal Corporate Law Judiciary October 9, 2017

TaxGuru Citation: 2017 taxguru.in 925
Case Name: Anil Steels V. A.D. Electro Steel Co. (P.) Ltd (NCLT Kolkata Bench)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: NCLT

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Short Summary:

In this article author explains provisions of Insolvency & Bankruptcy Code, 2016 (hereafter referred as “IBC”) in relation to power of NCLT pursuant to admission of petition in case of dispute raised by the Operational Creditor by analyzing the judgment in the case of Anil Steels V. A.D. Electro Steel Co. (P.) Ltd by National Company Law Tribunal, Kolkata Bench.

Main Issue under Appeal is “Whether Corporate Debtor can bar the NCLT to accept the petition of Operational Creditor by raising a dispute on the Demand Notice”

Introduction:

Insolvency and Bankruptcy Code, 2016 (the, “Code”) is a crucial legislation passed by the Parliament which has the potential to be a game changer in the insolvency and bankruptcy regime in India.

As per Section 8(2) of the Code, he corporate debtor shall, within a period of ten days of the receipt of the demand notice or copy of the invoice mentioned in sub-section (1) bring to the notice of the operational creditor— (a) existence of a dispute, if any, and record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute;

CASE ELEMENT:

Case Name

Anil Steels V. A.D. Electro Steel Co. (P.) Ltd

Operational Creditor (Petitioner)

Anil Steels (Operational Creditor)

Corporate Debtor