# In the matter of Praxis Corporate Services Pvt. Ltd. Vs. Powai Cubicles Pvt. Ltd. CA(AT)(Insolvency) No. 456-2019

> NCLAT judgment dated 2019-08-27. Citation: TCN-2019-NCLAT-00338. Praxis Corporate Services Private Limited (Operational Creditor) filed an application under…

- **Court:** NCLAT
- **Order date:** 27 Aug 2019
- **Citation:** TCN-2019-NCLAT-00338
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/praxis-corporate-services-pvt-ltd-vs-powai-cubicles-pvt-ltd-ca-c3207436

## Summary

### Background

Praxis Corporate Services Private Limited (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, for initiating Corporate Insolvency Resolution Process against Powai Cubicles Private Limited (Corporate Debtor). The Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, dismissed the application on February 18, 2018, stating that there was a bona fide dispute concerning the services rendered by the Appellant. The Adjudicating Authority noted that the nature of the dispute and claims arising out of the dispute were well-documented in the Corporate Debtor's reply dated April 6, 2018.

## Facts

Praxis Corporate Services Private Limited, the Operational Creditor, initiated CIRP against Powai Cubicles Private Limited, the Corporate Debtor, under Section 9 of the IBC. The Adjudicating Authority dismissed the application, citing a pre-existing bona fide dispute. The Corporate Debtor had replied to the demand notice, claiming a dispute concerning the services rendered. The Operational Creditor argued that no evidence of a pre-existing dispute existed before the issuance of the demand notice. The first demand notice was issued on March 1, 2018, followed by a subsequent notice on May 7, 2018. The Corporate Debtor's reply was filed on May 17, 2018, relying on an earlier reply dated April 6, 2018, to claim the existence of a bona fide dispute. The appellate tribunal

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was correct in dismissing the application under Section 9 of the …

**Ratio:** The existence of a pre-existing dispute is a bar to the admission of an application under

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**Reasoning:** The appellate tribunal found that the Adjudicating Authority failed to notice that the

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**Interpretation:** Section 9 of the Insolvency and Bankruptcy Code requires that there should not

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**Application:** In this case, the Corporate Debtor's claim of a dispute was based on a reply

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## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…; +1 more
- **Appellants:** Praxis Corporate…
- **Respondents:** Powai Cubicles…; Powai Cubicles…
- **Advocates:** Deepak B…; Subhalaxm…; +2 more

## Timeline

- **2018-02-18 — Impugned Order by…**: The Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, dismissed the…
- **2018-03-01 — First Demand…**: The first demand notice under Section 8(1) of the I&B Code was issued to the Corporate…

## 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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