# In the matter of Prem Sarup Narula Vs. Bycell Communications India Ltd. CA (AT) No. 265-2017

> NCLAT judgment dated 2017-11-13. Citation: TCN-2017-NCLAT-00070. The appeal was preferred by the Appellant, an Operational Creditor, against the order dated…

- **Court:** NCLAT
- **Order date:** 13 Nov 2017
- **Citation:** TCN-2017-NCLAT-00070
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/prem-sarup-narula-vs-bycell-communications-india-ltd-ca-b31733f9

## Summary

### Background

The appeal was preferred by the Appellant, an Operational Creditor, against the order dated 28th September 2017, passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi Bench, New Delhi. The application preferred by the Appellant under Section 9 of the Insolvency and Bankruptcy Code, 2016, was dismissed on the ground of 'existence of dispute'. The Appellant initially issued a legal notice on 24th May 2016, for winding up of the Company under Section 433(e) of the Companies Act, 1956, and filed a Company Petition No. 790 of 2016 before the Hon'ble High Court of Delhi. In response to the demand notice dated 31st July 2017, the Respondent-Corporate Debtor disputed the claim, stating that a sum of USD 33,000/- had already been paid to the Appellant

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## Facts

The Appellant, an Operational Creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process against the Respondent, ByCell Telecommunications India Pvt. Ltd. The Adjudicating Authority dismissed the application based on the 'existence of dispute'. Prior to initiating the insolvency proceedings, the Appellant had issued a legal notice on 24th May 2016, for winding up of the Company under Section 433(e) of the Companies Act, 1956, and filed a Company Petition No. 790 of 2016 before the Hon'ble High Court of Delhi. In response to a demand notice dated 31st July 2017, the Respondent-Corporate Debtor disputed the claim, stating that a sum of USD 33,000/- had already been paid to

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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 genuine dispute regarding the debt precludes the initiation of the

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**Reasoning:** The court reasoned that it would not determine whether any further amount was payable, as

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**Interpretation:** The 'existence of dispute' is interpreted as a situation where a genuine

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**Application:** In this case, the Respondent-Corporate Debtor had disputed the claim, stating

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## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…; +1 more
- **Appellants:** Prem Sarup…
- **Respondents:** ByCell Telecommuni…
- **Advocates:** Praveen A…

## Timeline

- **2016-05-24 — Legal Notice…**: Appellant issued a legal notice for winding up of the Company under Section 433(e) of the…
- **2016-01-01 — Company Petiti…**: Company Petition No. 790 of 2016 was filed…

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