# In the matter of Shree Ram Cargo Pvt. Ltd. Vs.
Rajat Ispat Pvt. Ltd. Company Appeal (AT) (Ins.) No. 538 of 2022

> NCLAT judgment dated 2022-05-19. Citation: TCN-2022-NCLAT-00476. The appeal was filed against the order dated 21st March 2022, by which the application filed…

- **Court:** NCLAT
- **Order date:** 19 May 2022
- **Citation:** TCN-2022-NCLAT-00476
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/shree-ram-cargo-pvt-ltd-vs-rajat-ispat-pvt-ltd-company-appeal-af7bfe82

## Summary

### Background

The appeal was filed against the order dated 21st March 2022, by which the application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by the appellant was rejected. The rejection was based on the observation that there was a pre-existing dispute between the parties.

## Facts

Shree Ram Cargo Pvt. Ltd. filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, which was rejected by the Adjudicating Authority due to a pre-existing dispute. The Adjudicating Authority relied on a letter dated 29th January 2018, which the Appellant claims was forged. The Corporate Debtor, Rajat Ispat Pvt. Ltd., stated in a letter dated 10.01.2018 that the goods supplied by JSPL against a back-to-back arrangement were of substandard quality. The Operational Creditor stated they would cancel the back-to-back arrangements and make claims against JSPL, assuring that the Corporate Debtor would have no liability. A demand notice was issued on 06th August 2019, and the Corporate Debtor replied on 28th August 2019, stating that the arrangement was

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## Issues and analysis

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

**Ratio:** The ratio is based on the Supreme Court's observation in Mobilox (Supra) that the

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**Reasoning:** The court reasoned that the Corporate Debtor had informed the Appellant that the

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**Interpretation:** The interpretation is that a pre-existing dispute, as defined by the Supreme

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**Application:** The ratio and reasoning were applied to the facts of the case, where the

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## Parties

- **Judges:** Ashok Bh…; Shreesha…; +1 more
- **Appellants:** Shree Ram Cargo…
- **Respondents:** Rajat Ispat Pvt.…

## Timeline

- **2022-03-21 — Order Da…**: Order passed by the Adjudicating Authority rejecting the application filed under Section…
- **2022-05-19 — Hearing…**: Heard Learned Counsel…

## 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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