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INSOLVENCY AND SECTION 138 OF NIA MATTERS

INSOLVENCY AND SECTION 138 OF NIA MATTERS

Landmrak Judgement by NCLAT Pendency of case U/S Section 138&141 NI Act amounts to admission debt, not existence of dispute under IBC NCLAT dismissed an appeal filed against the order of NCLT,New Delhi. NCLT had admitted the application filed by the respondent operational creditor U/S 9 of IBC & passed order of moratorium. The appellant corporate debtor submitted that there were cases under Section 138 and 141 of the Negotiable Instruments Act, 1881 pending before the competent court of jurisdiction. Therefore, according to appellant, there existed a dispute between the parties and hence the said application could not be admitted. NCLAT was not inclined to accept the submissions of the appellant. It referred to Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407 and was of the opinion that “pendency of the case under Sections 138 and 141, even if accepted as recovery proceeding, cannot be held to be a dispute pending before a court of law.” Therefore, the Appellate Tribunal held that the pendency of the case as aforementioned actually amounted to admission of debt endnote existence of dispute. The appeal was, thus, dismissed. [Sudhi Sachdev v. APPL Industries Ltd., Company Appeal (AT) (Insolvency) No. 623 of 2018, dated 13-11-2018] hashtag
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