# In the matter of Quippo Energy Ltd. Vs. Soundararaja Mills Limited CA(AT)(Ins)No. 231 of 2020

> NCLAT judgment dated 2020-11-03. Citation: TCN-2020-NCLAT-00061. The case involves an appeal against an order dated December 23, 2019, passed by the National…

- **Court:** NCLAT
- **Order date:** 3 Nov 2020
- **Citation:** TCN-2020-NCLAT-00061
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/quippo-energy-ltd-vs-soundararaja-mills-limited-ca-d2ae5974

## Summary

### Background

The case involves an appeal against an order dated December 23, 2019, passed by the National Company Law Tribunal (NCLT), Division Bench, Chennai. The NCLT had rejected an application filed by the Appellant, M/s Quippo Energy Ltd. (Operational Creditor), under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. The Appellant claimed that the Respondent, M/s Soundararaja Mills Limited (Corporate Debtor), owed them an operational debt. The Appellant and Respondent had entered into lease and service agreements, and the Appellant raised invoices for rental charges and services. The Respondent made partial payments until October 6, 2018, after which no further payments were made. The Appellant sent representations to the Respondent requesting payment of the

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## Facts

M/s Quippo Energy Ltd. (Appellant/Operational Creditor) and M/s Soundararaja Mills Limited (Respondent/Corporate Debtor) entered into lease and service agreements for power generation equipment. The Appellant raised invoices for rental charges and services provided. The Respondent made partial payments until October 6, 2018. After this date, no further payments were made. The Appellant sent representations to the Respondent requesting payment of the outstanding amount. The Respondent acknowledged the debt in an email dated July 19, 2018, and proposed a repayment plan, but failed to adhere to it. The Appellant issued a demand notice under Section 8 of the IBC on April 20, 2019, claiming an operational debt of INR 1,13,29,658/- plus interest. The Respondent replied on

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## Issues and analysis

### Issue 1: Whether a pre-existing dispute existed between the Appellant (Operational Creditor) and the …

**Ratio:** The ratio is based on the interpretation of Section 5(6) and Section 9 of the IBC, along

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**Reasoning:** The NCLAT reasoned that the Respondent had raised concerns about deficiencies in service

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**Interpretation:** The interpretation of 'pre-existing dispute' under the IBC requires a

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**Application:** In this case, the NCLAT applied the ratio by examining the communications

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## Parties

- **Judges:** Anant Bijay…; A.I.S. C…
- **Appellants:** M/s Quippo Energy…
- **Respondents:** M/s Soundararaja…
- **Advocates:** Manasi Chatpalliwa…; Gaurav Ma…; +4 more

## Timeline

- **2015-01-05 — Lease Agreeme…**: Parties entered into a…
- **2015-01-05 — Service Agreem…**: Parties entered into a…

## 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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