# In the matter of Ashok Raja Vs. Arun Kumar Gupta & Anr CA (AT) (Insolvency) No. 1082-2019

> NCLAT judgment dated 2019-12-11. Citation: TCN-2019-NCLAT-00034. Mr. Arun Kumar Gupta, an operational creditor, initiated corporate insolvency resolution…

- **Court:** NCLAT
- **Order date:** 11 Dec 2019
- **Citation:** TCN-2019-NCLAT-00034
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/ashok-raja-vs-arun-kumar-gupta-anr-ca-5a7e8c91

## Summary

### Background

Mr. Arun Kumar Gupta, an operational creditor, initiated corporate insolvency resolution process (CIRP) against Him Valves and Regulators Pvt Ltd (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority admitted the application on 01.10.2019 and appointed an Interim Resolution Professional (IRP). The appellant contested the admission, arguing the existence of a pre-existing dispute, as Mr. Arun Kumar Gupta had previously approached the Labour Court for the same claim. The Adjudicating Authority had rejected this objection. The respondent had also filed an application before the Labour Court against the Corporate Debtor for dues.

## Facts

Mr. Arun Kumar Gupta, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against Him Valves and Regulators Pvt Ltd (Corporate Debtor). The Adjudicating Authority admitted the application on 01.10.2019. Prior to this, Mr. Arun Kumar Gupta had filed an application before the Labour Court for the same claim. The respondent had also filed an application before the Labour Court against the Corporate Debtor for its dues, which was later withdrawn on 20.07.2019. A demand notice under Section 8(1) of the I&B Code was issued on 05.01.2019, followed by a notice dated 09.01.2019. The IRP/RP, Ms. Madhu Juneja, worked for 2 months and 11 days and incurred expenses of Rs.80,000/-. The IRP/RP had already

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## Issues and analysis

### Issue 1: Whether a pre-existing dispute existed between the operational creditor and the corporate debtor …

**Ratio:** The existence of a pre-existing dispute bars the initiation of CIRP under Section 9 of

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**Reasoning:** The tribunal reasoned that the application filed by the respondent before the Labour

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**Interpretation:** The interpretation of 'pre-existing dispute' is crucial in determining the

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**Application:** In this case, the Labour Court application filed by the respondent before the

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…; +1 more
- **Appellants:** Ashok…
- **Respondents:** Him valves and…; Arun Kumar…

## Timeline

- **2018-12-06 — Labour Court Ap…**: Mr. Arun Kumar Gupta filed an application before the Labour Court, New Delhi, against the…
- **2019-01-05 — Demand N…**: Demand notice under Section…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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