# In the matter of R.S. Pabbla Constructions Pvt. Ltd. vs. ISGEC Heavy Engineering Ltd.

> NCLAT judgment dated 2023-09-13. Citation: TCN-2023-NCLAT-00211. The case involves an appeal against the order passed by the Adjudicating Authority, which…

- **Court:** NCLAT
- **Order date:** 13 Sept 2023
- **Citation:** TCN-2023-NCLAT-00211
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/rs-pabbla-constructions-pvt-ltd-vs-isgec-heavy-engineering-ltd-64fb74c9

## Summary

### Background

The case involves an appeal against the order passed by the Adjudicating Authority, which rejected the Appellant's Section 9 application due to a pre-existing dispute. The Appellant, a sub-contractor, was issued a Letter of Intent by the Corporate Debtor for chimney construction. The Appellant claims entitlement to Idle Charges due to delays, leading to correspondences and a meeting on 2018-10-01 where the Appellant was asked to submit relevant documents. A legal notice was issued on 2019-01-11 for payment of Idle Charges.

## Facts

R.S. Pabbla Constructions Pvt. Ltd. (Appellant) filed an appeal against the rejection of its Section 9 application by the Adjudicating Authority. The rejection was based on the existence of a pre-existing dispute with ISGEC Heavy Engineering Ltd. (Corporate Debtor). Pabbla Constructions, a sub-contractor, was contracted by ISGEC for chimney construction, evidenced by a Letter of Intent. Pabbla claims entitlement to 'Idle Charges' due to delays, leading to correspondence and a meeting on 2018-10-01 where ISGEC requested relevant documents. Pabbla issued a legal notice on 2019-01-11 demanding payment for these charges. ISGEC disputed the claim, asserting in a letter dated 2019-02-02 that Pabbla was not entitled to any money and was attempting to 'arm-twist' them. The

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code (IBC) allows an operational creditor to

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**Reasoning:** The court found no error in the Adjudicating Authority's order because the Corporate

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**Interpretation:** The existence of a pre-existing dispute, meaning a dispute raised before the

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**Application:** In this case, the Corporate Debtor's letter dated 2019-02-02, which predates

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** R.S. Pabbla…
- **Respondents:** ISGEC Heavy…

## Timeline

- **2018-10-01 — Meeting between…**: A meeting was held where the Operational Creditor was requested to submit all relevant…
- **2019-01-11 — Legal Notice by…**: The Operational Creditor issued a legal notice to the Corporate Debtor for making payment…

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