# In the matter of Next Education India Pvt. Ltd. Vs. K12 Techno Services Pvt. Ltd. CA(AT)(Insolvency) No. 98-2019

> NCLAT judgment dated 2019-08-01. Citation: TCN-2019-NCLAT-00391. M/s. Next Education India Pvt. Ltd. ('Operational Creditor') filed an application under…

- **Court:** NCLAT
- **Order date:** 1 Aug 2019
- **Citation:** TCN-2019-NCLAT-00391
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/next-education-india-pvt-ltd-vs-k12-techno-services-pvt-ltd-ca-01f6f4d9

## Summary

### Background

M/s. Next Education India Pvt. Ltd. ('Operational Creditor') filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 against M/s. K12 Techno Services Private Limited (Corporate Debtor). The Adjudicating Authority (National Company Law Tribunal), Bengaluru Bench rejected the application on the ground of ‘existence of dispute' via an order dated December 20, 2018. The Appellant brought on record (Form 5) of ‘debt' and 'default', and a Demand Notice u/s 8(1) of the ‘I&B Code' issued on August 8, 2017. The Adjudicating Authority noted that the respondent filed a reply on September 8, 2017, to the Demand Notice, raising several disputes and annexing correspondence about defective services provided by the Appellant.

## Facts

M/s. Next Education India Pvt. Ltd. (the 'Operational Creditor') initiated proceedings under Section 9 of the Insolvency and Bankruptcy Code, 2016 ('I&B Code') against M/s. K12 Techno Services Private Limited (the 'Corporate Debtor'). The Adjudicating Authority, Bengaluru Bench, rejected the application citing the 'existence of dispute'. The Operational Creditor submitted Form 5 evidencing 'debt' and 'default', along with a Demand Notice issued under Section 8(1) of the I&B Code on August 8, 2017. The Corporate Debtor responded to the Demand Notice on September 8, 2017, alleging several disputes and providing correspondence regarding defective services. The 'Master Service Agreement' with ‘Sri Gowtham Academy of General and Technical Education' was

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## Issues and analysis

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

**Ratio:** A dispute raised after the issuance of a Demand Notice under Section 8(1) of the I&B

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**Reasoning:** The court reasoned that if a dispute is raised prior to the issuance of invoices or a

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**Interpretation:** This clarifies the interpretation of 'existence of dispute' under the I&B

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**Application:** In this case, the court found that the Adjudicating Authority failed to

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## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…; +1 more
- **Appellants:** M/s. Next…
- **Respondents:** M/s. K12 Techno…; M/s. K12 Techno…
- **Advocates:** Kumar S…; D. Pavan…; +3 more

## Timeline

- **2016-02-08 — Master Service…**: The ‘Master Service Agreement' with ‘Sri Gowtham Academy of General and Technical…
- **2017-08-08 — Demand Notice…**: Demand Notice u/s 8(1) of…

## 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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