Non-response to notice u/s. 8 doesn’t debar Corporate Debtor to contest application u/s. 9

Spik Enviro Management Pvt. Ltd. Vs Vision Earthcare Pvt. Ltd. (NCLAT Delhi)

NCLAT Delhi held that Section 8 of the Code travels in a different direction then an application filed under Section 9. Thus, if the notice u/s. 8 is not replied by the Corporate Debtor it does not debar the Corporate Debtor to contest the application filed u/s. 9 of the Code by raising its defence.

Facts- This appeal is against the order dated 06.06.2023, by which an application filed by the Appellant under Section 9 of the Insolvency and Bankruptcy Code, 2016, has been dismissed on the ground that the application does not meet the threshold of Rs. 1 Cr. provided under Section 4 of the Code.

Notably, the Appellant filed the application under Section 9 of the Code on 18.08.2020 for an amount of Rs. 2,77,68,000/- allegedly due and payable by the Corporate Debtor (CD). The present appeal has been preferred and the only point raised by the Appellant, both in the oral argument as well as in the written submissions that since the Respondent did not reply to the demand notice under Section 8 of the Code, therefore, it cannot raise the defence while contesting the application filed under Section 9 of the Code.