Disputed question of facts cannot be determined by NCLT; application under Section 9 I&B Code rejected: NCLAT

National Company Law Appellate Tribunal (NCLAT): A two-member bench comprising of Justice S.J. Mukhopadhaya, Chairperson and Justice Bansi Lal Bhat, Member (Judicial) dismissed an appeal filed against the order of National Company Law Tribunal, Hyderabad whereby appellant’s application under Section 9 of the Insolvency and Bankruptcy Code, 2016 was dismissed.

The appellant submitted that their claim was admitted by the respondent and the NCLT wrongly relied on other evidence to come to a conclusion that there was an existence of dispute. It was on record that series of emails were exchanged between the parties alleging non-submission of work completion certificate, non-completion of work, amount deductible for lead piping and non-removal of scrap material, and exorbitant tonnage claim made by the appellant contrary to existing industry practices.

The Appellate Tribunal noted that the aforementioned disputes were raised by the respondent much prior to issuance of demand notice by the appellant under Section 8(1). There was nothing on record to suggest any correctional measure taken by the appellant. On the other hand, the respondent pleaded that there was an existence of dispute. It was observed that there were disputed question of facts as to whether, subsequently, the scrap material was removed and exorbitant tonnage claim made by the appellant was corrected. It was held that such disputed questions cannot be determined by NCLT. The Appellate Tribunal, accordingly, upheld the decision of the NCLT not to admit the application under Section 9. The appeal was dismissed holding it to be sans merit. [Laina Power Engineering v. Sokeo Power (P) Ltd.,2018 SCC OnLine NCLAT 414, dated 16-08-2018]

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