# In the matter of Mr. Davinder Kumar Singhal Vs. Mr. Sanjay Kumar Chetwani Company Appeal (AT) (Insolvency) No. 1088 of 2021

> NCLAT judgment dated 2022-05-13. Citation: TCN-2022-NCLAT-00690. The appeal was filed by a Suspended Director of the Corporate Debtor challenging the order…

- **Court:** NCLAT
- **Order date:** 13 May 2022
- **Citation:** TCN-2022-NCLAT-00690
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/mr-davinder-kumar-singhal-vs-mr-sanjay-kumar-chetwani-company-appeal-46136711

## Summary

### Background

The appeal was filed by a Suspended Director of the Corporate Debtor challenging the order dated 14.12.2021 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi, Bench IV, which admitted an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, filed by the Operational Creditor (Respondent No. 1). The Corporate Debtor is a manufacturer of 'Endura' products and has been using the trademark 'Endura Mass A Weight Gainer' since 2001. The Respondent No. 1 got a trademark 'NPD Endura Mass' registered in 2009, allegedly by making false representations and concealing the Corporate Debtor's trademark.

## Facts

The Corporate Debtor is a manufacturer of 'Endura' products since 1996.

Respondent No. 1 obtained trademark 'NPD Endura Mass' allegedly through false representation.

An Assignment Deed dated 19.01.2018 was executed between the parties for Rs.4.40 Crores.

The Corporate Debtor issued a post-dated cheque for Rs.52,80,000/- as security.

The Corporate Debtor instructed its bank to stop payment of the cheque.

The Corporate Debtor filed a criminal complaint against Respondent No. 1.

Respondent No. 1 issued a demand notice under Section 8 of the IBC.

The Corporate Debtor claimed there was no liability to pay GST.

The Adjudicating Authority admitted the Section 9 application.

The Appellant claimed pre-existing dispute.

## Issues and analysis

### Issue 1: Whether there was a pre-existing dispute between the parties prior to the issuance of the Section 8 …

**Ratio:** The existence of a pre-existing dispute is a valid ground for rejecting an application

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**Reasoning:** The Corporate Debtor had communicated to the Respondent No. 1 that there was no liability

…

**Interpretation:** The NCLAT interpreted the facts to indicate that a dispute existed prior to the

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**Application:** The NCLAT applied the principle that a pre-existing dispute bars the admission

…

## Parties

- **Judges:** Ashok Bh…; Shreesha…
- **Appellants:** Davinder Kumar…
- **Respondents:** Medinnbelle…; Sanjay Kumar…
- **Other parties:** Santanu Kumar…
- **Advocates:** Saurabh K…; Madan V…; +9 more

## Timeline

- **2021-12-14 — Order Da…**: Order passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi,…
- **2021-12-23 — Interim…**: While issuing notice in this Appeal on 23.12.2021, an interim order was passed directing…

## 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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