Uncorroborated Allegations Pertaining To Pre-Existing Dispute Cannot Be Entertained: NCLT Admits Petition U/S 9 Of IBC

The National Company Law Tribunal (NCLT) ruled that a petition under Section 9 of the Insolvency and Bankruptcy Code (IBC) is not maintainable if there is a pre-existing dispute. The case involved an operational creditor who filed a petition for insolvency resolution against a corporate debtor. The debtor argued that there was a pre-existing dispute regarding the quality of goods supplied. The NCLT found that the dispute was genuine and ongoing, rendering the petition inadmissible. This ruling highlights the importance of resolving disputes before initiating insolvency proceedings, ensuring that the IBC is not misused to settle commercial disagreements.