- Posted by Arpit Marwah
- On July 22, 2019
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- Insolvency and Bankruptcy code, insolvency and bankruptcy code 2016, insolvency and bankruptcy code 2018, insolvency and bankruptcy code explained, insolvency and bankruptcy code prs, insolvency and bankruptcy code upsc
✓ The Insolvency and Bankruptcy code (IBC),came into existence on 28th may, 2016 with a motive to inter Alia address and resolve these issues. In other words, it provides mechanisms for resolution of Insolvency and bankruptcy matters in India.
Various benches of NCLT(National Company Law Tribunal) have pronounced conflicting orders which gave rise in inconsistency and interpretation of IBC provisions. There was still the core issue under the IBC pertaining to the term “Dispute”. The same was resolved by the Supreme Court in Mobilox Innovations Privated Limited vs. Kirusa Software Private Limited
✓ Dispute is defined under section 5(6) of the IBC Code as ;
Dispute include a suit or arbitration proceedings related to-
1. The existence of the amount of debt,
2. The quality of goods of services,
3. The breach of a representation or warranty.
Subsequently, NCLAT allowed Kirusa’s appeal on the ground that the reply to the Demand Notice by the Mobilox cannot be seen within the purview of Section 8(2) and Section 5(6) of the Insolvency and Bankruptcy Code. It stated that the defense raised by Mobilox was vague and motivated as the debt demanded was not in connection with the non-disclosure agreement. Further NCLAT stressed upon the interpretation of “dispute” stating the a dispute would not be limited to only arbitration proceedings or suits but shall include any proceedings initiated before any tribunal, consumer court, Labour court etc.