Examination of a Pre-Existing Dispute Should Not Exceed Limited Jurisdiction of NCLT under IBC: NCLAT [Read Order]

The National Company Law Appellate Tribunal (NCLAT) ruled that under the Insolvency and Bankruptcy Code (IBC), the National Company Law Tribunal (NCLT) should not exceed its jurisdiction by examining the merit of a pre-existing dispute. \r

In a case involving Gannon Dunkerley & Co Ltd and Kapasi Infracon LLP, the Operational Creditor's Section 9 petition was dismissed despite a pending arbitration referred by the Kolkata High Court. The NCLAT cited the Supreme Court's ruling in Mobilox Innovations Pvt Ltd vs. Kirusa Software Pvt Ltd, emphasizing that the Adjudicating Authority should only determine the existence of a substantial dispute, not its merits. \r

Justices Yogesh Khanna and Ajai Das Mehrotra concluded by dismissing the Operational Creditor's Section 9 petition.