# In the matter of Kanti Commercials Pvt. Ltd. Vs. Belthangady Taluk Rubber Growers Marketing & Processing Co-operative Society Ltd. & Ors. CA (AT) No. 221-2017

> NCLAT judgment dated 2018-03-08. Citation: TCN-2018-NCLAT-00352. This case involves an appeal against an order passed by the Adjudicating Authority (National…

- **Court:** NCLAT
- **Order date:** 8 Mar 2018
- **Citation:** TCN-2018-NCLAT-00352
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/kanti-commercials-pvt-ltd-vs-belthangady-taluk-rubber-growers-marketing-processi-a4943a4f

## Summary

### Background

This case involves an appeal against an order passed by the Adjudicating Authority (National Company Law Tribunal), Bengaluru Bench, which admitted an application under Section 9 of the Insolvency and Bankruptcy Code (I&B Code) filed by Belthangady Taluk Rubber Growers Marketing & Processing Co-operative Society Ltd & Ors. ('Operational Creditor') against Falcon Tyres Limited ('Corporate Debtor'). The appellant, Kanti Commercials Private Limited, a shareholder of Falcon Tyres Limited, challenged the order, primarily on the ground that a suit was already pending between the parties before the issuance of the demand notice under Section 8 of the I&B Code.

## Facts

Kanti Commercials Pvt. Ltd., a shareholder of Falcon Tyres Limited ('Corporate Debtor'), filed an appeal against the order dated 30th August, 2017 passed by the Adjudicating Authority (National Company Law Tribunal), Bengaluru Bench. The Adjudicating Authority admitted an application under Section 9 of the Insolvency and Bankruptcy Code (I&B Code) filed by Belthangady Taluk Rubber Growers Marketing & Processing Co-operative Society Ltd & Ors. ('Operational Creditor'). The Operational Creditor had supplied goods to the Corporate Debtor, and a certain amount remained unpaid. The Operational Creditor issued a notice under section 434(1)(a) of the Companies Act, 1956, but the amount was not paid. The Operational Creditor then filed a suit bearing OS No. 83 of

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## Issues and analysis

### Issue 1: Whether the application under Section 9 of the I&B Code was maintainable given the prior …

**Ratio:** The existence of a pre-existing dispute, evidenced by a pending suit or arbitration

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**Reasoning:** The court reasoned that since the suit between the parties was admittedly pending before

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**Interpretation:** Section 9 of the I&B Code allows an operational creditor to initiate

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**Application:** In this case, the suit filed by the Operational Creditor against the Corporate

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Kanti Commercials…
- **Respondents:** Falcon Tyres…; Belthangady Taluk…

## Timeline

- **2017-01-20 — Suit Fil…**: The Operational Creditor filed a suit bearing OS No. 83 of 2017 before the Addl. Senior…
- **2017-01-24 — Demand Notice…**: The Operational Creditor issued a demand notice under sub-section (1) of Section 8 of the…

## 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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