# In the matter of Shree Durga Iron & Steel Company Ltd. vs. Rawalwasia Textile Industries Private Ltd. Company Appeal (AT)(Insolvency) No. 1343 of 2022

> NCLAT judgment dated 2023-05-26. Citation: TCN-2023-NCLAT-00488. The appeal arises from an order dated 07.07.2022 passed by the Adjudicating Authority…

- **Court:** NCLAT
- **Order date:** 26 May 2023
- **Citation:** TCN-2023-NCLAT-00488
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/shree-durga-iron-steel-company-ltd-vs-rawalwasia-textile-industries-private-ltd-975eb4d5

## Summary

### Background

The appeal arises from an order dated 07.07.2022 passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad Court-II) in CP (IB) No. 216/NCLT/AHM/2020, dismissing a Section 9 application filed by Shree Durga Iron and Steel Company Ltd. (the Appellant) seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Rawalwasia Textile Industries Pvt. Ltd. (the Respondent). The Appellant, an operational creditor, claimed that the Respondent, a corporate debtor, had defaulted on payments related to a High Seas Sale Agreement (HSSA) for the supply of coal.

## Facts

Shree Durga Iron & Steel Company Ltd. (Appellant) and Rawalwasia Textile Industries Private Ltd. (Respondent) entered into a High Seas Sale Agreement (HSSA) dated 24.05.2014 for the supply of 4000 MTs of coal. The Appellant claimed to have supplied the coal in four consignments on 22.08.2014, raising an invoice of Rs. 1,63,29,680/- on 15.09.2014, and issuing a debit note for stevedoring charges of Rs.11,46,072/- on 24.12.2014. The Appellant filed a summary suit before the Bombay High Court, which decreed a sum of Rs. 2,45,78,804/- in their favor on 14.12.2018. The decree was served on the Respondent on 13.12.2019. The Appellant sent a Section 8 demand notice on 31.01.2020 and filed a Section 9 application on 28.02.2020. The Respondent contended that the coal

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## Issues and analysis

### Issue 1: Whether a genuine pre-existing dispute existed between the Appellant and the Respondent regarding …

**Ratio:** The principle established in Mobilox Innovations Pvt. Ltd. Vs. Kirusa Software Private

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**Reasoning:** The NCLAT reasoned that the email dated 15.10.2014 from the Respondent to the Appellant

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**Interpretation:** The interpretation of 'pre-existing dispute' under Section 9 of the IBC

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**Application:** In this case, the NCLAT applied the principle from Mobilox Innovations to the

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Shree Durga Iron…
- **Respondents:** Rawalwasia…
- **Advocates:** Ravi Ragh…; Vikram…; +2 more

## Timeline

- **2014-05-24 — High Seas Sale…**: Appellant and Respondent entered into a High Seas Sale Agreement (HSSA) for the supply of…
- **2014-08-22 — Coal Consi…**: Appellant claimed to have…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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