# In the matter of CIL Australia North Pty. Ltd. Vs. Sharp Corp Ltd. CA(AT)(Insolvency) 319-2019

> NCLAT judgment dated 2019-05-02. Citation: TCN-2019-NCLAT-00599. This is an appeal preferred by the Appellant (Operational Creditor) against the order dated…

- **Court:** NCLAT
- **Order date:** 2 May 2019
- **Citation:** TCN-2019-NCLAT-00599
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/cil-australia-north-pty-ltd-vs-sharp-corp-ltd-ca-2750587c

## Summary

### Background

This is an appeal preferred by the Appellant (Operational Creditor) against the order dated 12th February 2019, passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi. The NCLT rejected the application filed by the Appellant under Section 9 of the Insolvency & Bankruptcy Code, 2016, on the ground of a pre-existing dispute. The Appellant contended that the Demand Notice under Section 8(1) was issued on 5th October 2018, and the suit was filed subsequently on 16th October 2018, arguing that a pre-existing dispute could not be claimed.

## Facts

CIL Australia North Pty.Ltd. (Appellant/Operational Creditor) filed an application under Section 9 of the Insolvency & Bankruptcy Code, 2016, before the NCLT, New Delhi, against M/s. Sharp Corp Ltd. (Respondent/Corporate Debtor). The NCLT rejected the application based on the existence of a pre-existing dispute. The Appellant issued a Demand Notice under Section 8(1) on 5th October 2018. The Respondent had filed a suit on 16th October 2018, prior to the Demand Notice. The Respondent contended that the notice dated 5th October 2018, was a general notice for arbitration, not a Demand Notice. The Appellant argued that the suit was filed in a court without jurisdiction and based on no evidence. The key fact is the timing of the suit filing relative to the Demand

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was correct in rejecting the application under Section 9 of the …

**Ratio:** The ratio is based on the Supreme Court's observations in Innoventive Industries Ltd. Vs.

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**Reasoning:** The court reasoned that the existence of a pre-existing dispute, as determined by the

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**Interpretation:** The interpretation of the law is that the existence of a pre-existing dispute,

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**Application:** In this case, the court found that a suit was filed by the Respondent prior to

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## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…; +1 more
- **Appellants:** CIL Australia…
- **Respondents:** M/s. Sharp Corp…
- **Advocates:** Sudhanshu…; Damay…; +4 more

## Timeline

- **2018-10-05 — Notice I…**: Respondent issued a notice, argued to…
- **2018-10-16 — Suit Fil…**: Respondent filed a suit…

## 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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