The National Company Law Appellate Tribunal (NCLAT) has upheld the dismissal of a Section 9 application filed under the Insolvency and Bankruptcy Code, 2016, holding that a genuine pre-existing dispute between the parties, arising out of warranty claims and not the sale of goods, barred initiation of corporate insolvency proceedings.
The Tribunal further observed that insolvency proceedings cannot be used as a coercive mechanism or as a counterblast in the face of an ongoing dispute.
A bench comprising Justice Yogesh Khanna (Member Judicial) and Ajai Das Mehrotra (Member Technical) dismissed the appeal and affirmed the order of the National Company Law Tribunal (NCLT), New Delhi dated 13.10.2023, which had rejected the Section 9…