Standard Of Pre-Existing Dispute Under IBC Is Not Equivalent To Principle Of 'Preponderance Of Probability': Supreme Court
The Supreme Court Bench, comprising of Justice K.M. The Corporate Debtor responded to the Demand Notice and in turn demanded a total amount of Rs.4.44 crores from Operational Creditor, as damages towards the supplied coal not being of the promised quality. The Operational Creditor had filed a petition under Section 9 of Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor. When the ex-Director of Corporate Debtor namely Mr. Rajratan Babulal Agarwal went in appeal before the NCLAT contending that there was a 'pre-existing dispute', the appeal was dismissed. While placing reliance on the Mobilox judgment, it was observed that IBC does not enable the Operational Creditor to put the Corporate Debtor into insolvency resolution process prematurely over small amounts of default.
NCLT Mumbai: Operational Debt Under IBC Does Not Include Penalty Or Liquidated Damages
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