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ARTICLE · 03 APRIL 2017

Insolvency And Bankruptcy Code, 2016 | NCLT Demystifies "Disputed Debt" For An Operational Creditor

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In a recent order admitting a petition for insolvency resolution filed by Essar Projects India Limited (Operational Creditor) against MCL Global Steel Private Limited (Corporate Debtor), ...

IndiaInsolvency/Bankruptcy/Re-Structuring
Ashwin Bishnoi
Ashwin Bishnoi
Aayushi Anand
Aayushi Anand
Tarang Shashishekar
Tarang Shashishekar
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In a recent order admitting a petition for insolvency resolution filed by Essar Projects India Limited (Operational Creditor) against MCL Global Steel Private Limited (Corporate Debtor), the National Company Law Tribunal (Mumbai Bench) (NCLT) has clarified what constitutes a 'disputed debt' within the meaning of Sections 8 and 9 of the Insolvency and Bankruptcy Code, 2016 (Code) and Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.

Facts of the case

The Operational Creditor was appointed to assist with the construction of a steel melt shop complex by the Corporate Debtor. However, despite raising invoices and sending reminder letters to the Corporate Debtor, the Operational Creditor's dues remained unpaid. Seeking respite under the Code, the Operational Creditor issued a demand notice to the Corporate Debtor asking it to repay the amounts owed within 10 days or notify the Operational Creditor of an impending dispute in

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