# Chandra Prakash Lohia @ Nitesh Lohia vs. West Bengal Agro Textile Corporation Limited

> NCLAT judgment dated 2026-05-07. Citation: TCN-2026-NCLAT-00201. The appellant, an operational creditor, filed a Section 9 application against the corporate…

- **Court:** NCLAT
- **Order date:** 7 May 2026
- **Citation:** TCN-2026-NCLAT-00201
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/chandra-prakash-lohia-nitesh-lohia-vs-west-bengal-agro-textile-corporation-limit-bndl9

## Summary

### Background

The appellant, an operational creditor, filed a Section 9 application against the corporate debtor, West Bengal Agro Textile Corporation Limited. This application was rejected by the National Company Law Tribunal (NCLT), Kolkata, on March 24, 2026, citing a pre-existing dispute. The dispute stemmed from a Title Suit (No. 1683/2023) initiated by the corporate debtor on October 17, 2023, which predated the Section 8 demand notice issued by the appellant on March 26, 2024. The appellant subsequently challenged this NCLT order before the National Company Law Appellate Tribunal (NCLAT).

## Facts

An appeal was filed against an order dated 24.03.2026 passed by the Adjudicating Authority (NCLT, Division Bench, Court No. I, Kolkata).

The NCLT order rejected a Section 9 application filed by the appellant on the ground of a pre-existing dispute.

The Corporate Debtor (West Bengal Agro Textile Corporation Limited) instituted Title Suit No. 1683/2023 on 17.10.2023.

The Section 8 demand notice was dated 26.03.2024, which was subsequent to the filing of the Title Suit.

The appellant argued that the Title Suit was frivolous and filed solely to avoid Section 9 proceedings.

The appellant claimed that there had been a settlement in the Title Suit.

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## Issues and analysis

### Issue 1: Whether a Section 9 application under the IBC is maintainable if a pre-existing dispute, in the …

**Ratio:** A Section 9 application is not maintainable if a pre-existing dispute, evidenced by a

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**Reasoning:** The Insolvency and Bankruptcy Code (IBC) draws a clear line, stipulating that a dispute

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**Interpretation:** The 'clear line' drawn by the Code signifies that the existence of a dispute

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**Application:** In the present case, since the Corporate Debtor's Title Suit was filed before

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Chandra Prakash…
- **Respondents:** West Bengal Agro…
- **Advocates:** Arati Ag…; Rishabh…; +7 more

## Timeline

- **17.10.2023 — Title Suit…**: Corporate Debtor instituted…
- **26.03.2024 — Section 8 Dema…**: Section 8 demand notice…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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