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“Dispute” and “existence of dispute” under Insolvency and Bankruptcy Code, 2016 by the Supreme Court

Case Law

Mobilox Innovations Private Limited Vs Kirusa Software Private Limited (Respondent – Operational Creditor), SC

Fact of Case 

OC filed an application u/s 9, claim was disputed by the corporate debtor (CD) and it was alleged that OC has violated the Non-disclosure agreement entered between them as OC disclosed the client information and client campaign information on its web page and no amount was paid due to this breach of agreement.

NCLT dismissed the application of OC on a ground of existence of dispute. However, on further appeal by OC in NCLAT, the application was accepted on a ground that condition of demand notice under sub-section (2) of Section 8 has not been fulfilled by the CD and the defence claiming dispute was not only vague but got up and motivated to evade the liability. It is pertinent to note that there was no suit or arbitration was pending /filed before the receipt of demand notice.

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Mansi Agarwal