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Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd.

(2018) 1 SCC 353

Paragraph 34, 51 and 54 of the judgement talks about the conditions that the adjudicating
authority has to consider while examining an application under Section 9 of IBC. It talks
about the existence of dispute. The Corporate Debtor has to bring to the notice of the
operational creditor the “existence” of a dispute or the fact that a suit or arbitration
proceeding relating to a dispute is pending between the parties. Therefore, all that the
adjudicating authority is to see at this stage is whether there is a plausible contention which
requires further investigation and that the “dispute” is not a patently feeble legal argument
or an assertion of fact unsupported by evidence. The Court does not at this stage examine
the merits of the dispute except to the extent indicated above. So long as a dispute truly
exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to
reject the application. It also states about how ‘and’ in Section 8 has to be read as ‘or’ while
considering the existence of a dispute.

Innoventive Industries Ltd. v. ICICI Bank

(2018) 1 SCC 407
Paragraph 29 of the judgement states that the moment there is existence of such a dispute,
the operational creditor gets out of the clutches of the Code.

Transmission Corporation of Andhra Pradesh Limited v. Equipment Conductors and

Cables Limited
2018 SCC OnLine SC 2113
The Hon’ble Apex Court observed that NCLAT has not appreciated the merits of the case,
and has also not stated how exactly the amount is payable to the Respondent. The Apex
Court held that IBC is not to be used for recovery of monies of any kind but rather only
particularly mentioned debts and whenever there is existence of real dispute thus the
existence of an undisputed debt is sine qua non of initiating CIRP, the IBC provisions cannot
be invoked. Paragraph 9 and 10 of the judgement states that the existence of an undisputed
debt is sine qua non of initiating CIRP.
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K.Kishan v. M/S Vijay Nirman Company Pvt. Ltd.

2017 SCC OnLine SC 1665

The court in K. Kishan relied heavily on Mobilox, where the Court had clarified that the
dispute need not be a bona fide one. As long as the dispute is real, and not illusory or
hypothetical, it would fall within the scope of dispute under section 9 of the IBC.

The term 'dispute' is defined in Section 5(6) of the Code which reads as under:-

““dispute" includes a suit or arbitration proceedings relating to -

a) the existence of the amount of debit;

b) the quality of goods or service; or
c) the breach of are presentation or warranty.”

The Corporate Debtors, the only requisite is debt must be there, default must be there,
dispute in existence should not be there. If all these three are complied with, this Bench
ought to admit these Company Petitions.

Adjudicating Authority cannot look into any dispute in an application u/s 9, except existence
of a dispute, if any, existed prior to the issuance of Demand Notice u/s 8(1)-Durlum India
Pvt. Ltd. Vs. Piccadily Hotels Pvt. Ltd.- NCLAT.

It is made clear that the Adjudicating Authority cannot look into any dispute in an application
under section 9, except existence of a dispute, if any, existed prior to the issuance of
Demand Notice under Section 8(1), which will be the first Demand Notice issued in the
present case.
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M/S Embassy Property vs The State Of Karnataka

2019 SCC Online SC 1542
Paragraph 54 states that NCLT and NCLAT would have jurisdiction to enquire into questions
of fraud, they would not have jurisdiction to adjudicate upon disputes such as those arising
under MMDR Act, 1957 and the rules issued thereunder, especially when the disputes
revolve around decisions of statutory or quasi judicial authorities, which can be corrected
only by way of judicial review of administrative action. Hence, the High Court was justified
in entertaining the writ petition and we see no reason to interfere with the decision of the
High Court.

Laxmichand Bansidhar v. Juggilal Kamlpat jute Mills Company Ltd.

2018 SCC Online NCLT 14422
Paragraph 8 states that the acknowledgement of debt by corporate debtor the records show
the balance of Rs.3,71,356/- is outstanding as on 31/03/2004 in the name of Laxmichand
Bansidhar. The acknowledgement of debt has been issued by assistant manager of jk jute
mill. The signature on the alleged certificate is forged and construed by them and the
certificate is manipulated.
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