# In the matter of Rajratan Babulal Agarwal & Ors. Vs. Agarwal Coal Corporation India Pvt. Ltd. Company Appeal (AT) (Ins) No. 661 of 2020

> NCLAT judgment dated 2021-03-15. Citation: TCN-2021-NCLAT-00325. This case involves an appeal against an order by the Adjudicating Authority (National Company…

- **Court:** NCLAT
- **Order date:** 15 Mar 2021
- **Citation:** TCN-2021-NCLAT-00325
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/rajratan-babulal-agarwal-ors-vs-agarwal-coal-corporation-india-pvt-ltd-company-a-61d4b668

## Summary

### Background

This case involves an appeal against an order by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench) that admitted an application under Section 9 of the Insolvency and Bankruptcy Code (IBC) filed by Agarwal Coal Corporation India Pvt. Ltd. (ACCPL) against Shri Tradco Deesan Private Limited, the Corporate Debtor. The appellant, a director of the Corporate Debtor, argued that the Adjudicating Authority should not have admitted the application due to pre-existing disputes and suspect invoices. The Corporate Debtor claimed that the Operational Creditor, ACCPL, had not supplied the goods for which the invoices were raised and that the claims were based on false accounts.

## Facts

Rajratan Babulal Agarwal, a director of Shri Tradco Deesan Private Limited (the Corporate Debtor), filed an appeal against an order dated 2020-07-16 passed by the National Company Law Tribunal (NCLT), Mumbai Bench, which admitted an application under Section 9 of the Insolvency and Bankruptcy Code (IBC) filed by Agarwal Coal Corporation India Pvt. Ltd. (ACCPL), the Operational Creditor. The Corporate Debtor claimed that it required high-grade imported coal for its boilers and that ACCPL was the supplier. The Corporate Debtor argued that ACCPL had not supplied the goods for which the invoices were raised and that the claims were based on false accounts. The Corporate Debtor also claimed that it had suffered losses due to short supplies and had quantified the losses at

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## Issues and analysis

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

**Ratio:** The existence of a pre-existing dispute and the unreliability of the accounts on which

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**Reasoning:** The court found that the Operational Creditor's claims were based on false accounts and

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**Interpretation:** Section 9 of the IBC requires the Adjudicating Authority to consider whether

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**Application:** In this case, the court found that there were pre-existing disputes and that

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## Parties

- **Judges:** A.I.S. C…; V. P. S…
- **Appellants:** Rajratan Babulal…
- **Respondents:** Tradco Deesan…; Agarwal Coal…

## Timeline

- **2020-07-16 — Impugned…**: Adjudicating Authority passed Impugned Order admitting the Application under Section 9…
- **2020-07-31 — Settlement Ag…**: Appellant and Respondent No.1 – Operational Creditor entered into written Agreement to…

## 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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