The case brought about a new understanding of the IBC wherein the IBC provisions cannot be used in any situation where there is a genuine dispute. The Code's goal is to get the Corporate Debtor out of insolvency and maximise the value of its assets, not to recoup the money. In the case of Anshul Vashishtha vs. Jayhind Steel Traders and Anr., the NCLAT New Delhi issued a ruling.
In the instant case titled Anshul Vashishtha vs. Jayhind Steel Traders and Anr. the issues raised before the NCLAT for clarification were:
Whether there is any default in dates?
Whether IBC provisions can be invoked during a real dispute?
With regard to the first issue, the NCLAT held that after reviewing the parties' numerous submissions, it becomes clear that there are multiple dates of default, that there is a dispute about balance dues, and that the real amount due needs to be reconciled and recorded. The Operational Creditor asserts that the debt owed exceeds Rs. 1 lac. If it is due for payment, it will be the responsibility of the IRP to reconcile and segregate the disputed amount so that the claim can be counted if the application fits the requirements of Sections 8 and 9 of the Code. The Code's goal is to get the Corporate Debtor out of insolvency and maximise the value of its assets, not to recoup the money.
With regard to the second issue, the NCLAT took into reference Mobilox Innovations Pvt. Ltd., Vs. Kirusa Software Pvt. Ltd. [2018] 1 SCC 353, where the Hon'ble Supreme Court has already held that the IBC is not intended to be a substitute for a recovery forum. It's also stipulated that when there's the IBC provisions cannot be used unless there is a genuine dispute.
The Adjudicating Authority's order appointing IRP and IRP's actions were ruled illegal and set aside by the NCLAT, and the Corporate Debtor was released from all legal obligations and permitted to work freely through its Board of Directors with immediate effect.