# In the matter of Explo Media Pvt. Ltd. Vs. Ambience Pvt. Ltd. CA (AT) No. 20-2018

> NCLAT judgment dated 2018-03-16. Citation: TCN-2018-NCLAT-00339. The case involves an appeal against the rejection of an application filed under Section 9 of…

- **Court:** NCLAT
- **Order date:** 16 Mar 2018
- **Citation:** TCN-2018-NCLAT-00339
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/explo-media-pvt-ltd-vs-ambience-pvt-ltd-ca-727e28ea

## Summary

### Background

The case involves an appeal against the rejection of an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (I&B Code) by the Adjudicating Authority (National Company Law Tribunal), Bench III, New Delhi. The appellant, an operational creditor, filed the application, which was rejected by an order dated 3rd November, 2017. The dispute arose from a disagreement over the quality of services provided by the appellant to the respondent, the 'Corporate Debtor'.

## Facts

Explo Media Pvt. Ltd. (Appellant/Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, which was rejected by the Adjudicating Authority (National Company Law Tribunal). The dispute arose because Ambience Pvt. Ltd. (Respondent/Corporate Debtor) disputed the quality of services rendered by Explo Media. Explo Media issued an advocate notice on March 6, 2017, under Section 434(1)(a) of the Companies Act, 1956, demanding Rs.61,85,400/- plus 18% interest and Rs.25,000/- for legal fees. Ambience Pvt. Ltd. responded on March 11, 2017, claiming that Explo Media misled them regarding the outdoor advertising campaign, failed to provide agreed sites, and did not rectify electrical problems or provide updates. The Respondent had

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## Issues and analysis

### Issue 1: Whether there was an existing dispute between the parties prior to the issuance of the notice under …

**Ratio:** The existence of a pre-existing dispute bars the initiation of insolvency proceedings

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**Reasoning:** The court found that the respondent had disputed the quality of services provided by the

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**Interpretation:** Section 8 and 9 of the I&B Code require that there should be no

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**Application:** In this case, the respondent's prior dispute regarding the quality of services

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Explo Media Pvt.…
- **Respondents:** Ambience Pv…
- **Advocates:** Anand M…; Hemant…; +3 more

## Timeline

- **2017-03-06 — Advocate Notic…**: The Appellant (Operational Creditor) issued an advocate notice under Section 434 (1) (a)…
- **2017-03-11 — Reply to Advoca…**: The Respondent (Corporate Debtor) replied to the advocate notice, disputing the quality…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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