Filing of Civil Suit After Receipt of Section 8 Notice Under IBC [CS Shubham Budhiraja]

A & B enter into sale purchase agreement as per which coal is to be supplied, B through email raised issue of quality and there after A stopped the supply. A after 2 years served section 8 demand notice and after receipt of same, B filed suit for damages caused due to poor quality of coal supplied by A. The NCLT & NCLAT held that there is no pre-existing dispute because suit is filed after receipt of notice. There is no explanation why B remains silent for 2 years if he was aggrieved with the quality of coal. Also, the lab test report prepared by B was never shared with A. Hence, section 9 petition allowed.

  1. The dispute should not be patently feeble legal argument or an assertion of unsupported by evidence. The dispute raised by corporate debtor is purely spurious hypothetical and illusory.

  2. The Corporate Debtor has neither issued any debit note nor has returned the supplied coal but consumed the same. It means that after receiving the email dated 04.11.2016 the Corporate Debtor was satisfied and kept quiet for about 15 months. It is only when they received a statutory notice that they filed a Civil Suit against the Operational Creditor.

 Company Appeal (AT)(Ins.) No. 546 of 2020

Shubham Budhiraja  , 9654055315


Advocate, Delhi High Court

Associate Member- ICSI,

Member- Northern Region, Research Committee, ICSI

Member- Delhi High Court Bar Association

Secretary- Shaurya ek Samman (Regd. NG0)

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