The NCLT admitted an insolvency application of ₹3.96 crore, rejecting the corporate debtor's claim of a pre-existing dispute. It held that post-petition mediation cannot constitute a valid pre-existing dispute under Section 9 of the IBC.
NCLT Admits ₹3.96 Cr IBC Petition, Rejects Pre-Existing Dispute Raised via Post-Petition Mediation
The National Company Law Tribunal (NCLT) has admitted an insolvency application filed under Section 9 of the Insolvency and Bankruptcy Code (IBC) for an unpaid operational debt of ₹3.96 crore, rejecting the corporate debtor’s contention of a pre-existing dispute. The ruling clarifies that mediation initiated after the filing of the petition cannot retroactively create a valid dispute under IBC provisions.
The NCLT observed that for a pre-existing dispute to bar admission under Section 9, it must be demonstrably in existence before the service of the demand notice or at the time of filing. Relying on Macquarie Bank Ltd v. Satish Chandra Ghosh, it held that
"a dispute cannot be engineered ex post facto through post-dated correspondence or post-filing mediation attempts".
This decision reinforces the integrity of the Section 9 gateway, preventing dilatory tactics by debtors. Legal practitioners must ensure that defences based on disputes are properly documented and predate the initiation of the insolvency process to be effective. The ruling aligns with the IBC’s objective of timely debt recovery and discourages tactical litigation.
Citations
- Macquarie Bank Ltd v. Satish Chandra Ghosh
