# In the matter of Sanjay Kumar vs. Gannon Dunkerley & Co. Ltd. & Ors.

> NCLAT judgment dated 2024-05-30. Citation: TCN-2024-NCLAT-00394. The case involves an appeal against an order passed by the National Company Law Tribunal…

- **Court:** NCLAT
- **Order date:** 30 May 2024
- **Citation:** TCN-2024-NCLAT-00394
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/sanjay-kumar-vs-gannon-dunkerley-co-ltd-ors-773106bb

## Summary

### Background

The case involves an appeal against an order passed by the National Company Law Tribunal (NCLT), Allahabad Bench, which admitted a petition under Section 9 of the Insolvency and Bankruptcy Code (IBC) filed by Gannon Dunkerley & Co Ltd (Operational Creditor) against Kapasi Infracon LLP (Corporate Debtor). The dispute arose from a sub-contracting agreement where Kapasi Infracon LLP was appointed to complete a project initially awarded to Gannon Dunkerley & Co Ltd by National Highway and Infrastructure Development Corporation Ltd (NHIDCL). Disputes arose regarding payments, rental charges, and the existence of a pre-existing dispute before the demand notice was issued under Section 8 of the IBC.

## Facts

Gannon Dunkerley & Co Ltd (Operational Creditor) was awarded a contract by National Highway and Infrastructure Development Corporation Ltd (NHIDCL). Gannon Dunkerley & Co Ltd appointed Kapasi Infracon LLP (Corporate Debtor) as a sub-contractor to complete the project. Disputes arose between the Corporate Debtor and Operational Creditor regarding payments, rental charges, and other issues. The Corporate Debtor completed approximately 41.50% of the project work. A principal agreement was executed between Jalan Infrastructure LLP (JIL) and the Operational Creditor, followed by a Tripartite Agreement involving the Corporate Debtor. Disputes between JIL and the Operational Creditor led to the termination of agreements and referral to arbitration. The Corporate

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## Issues and analysis

### Issue 1: Whether a pre-existing dispute existed between the Operational Creditor and the Corporate Debtor …

**Ratio:** The existence of a pre-existing dispute is a valid ground for rejecting a Section 9

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**Reasoning:** The NCLAT reasoned that the Corporate Debtor had raised disputes and initiated

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**Interpretation:** The interpretation of 'pre-existing dispute' requires examining the timeline of

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**Application:** In this case, the NCLAT applied the principle of pre-existing dispute to the

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## Parties

- **Judges:** Yogesh K…; Ajai Das Me…
- **Appellants:** Sanjay…
- **Respondents:** Kapasi Infracon…; Gannon Dunkerley…

## Timeline

- **2017-11-09 — Original Contract…**: Original contract was awarded to…
- **2019-08-20 — Sub-contractor…**: Kapasi Infracon LLP was appointed as 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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