# In the matter of Subhash Chandra Goyal Sole
Proprietor of Goyal Enterprises Vs.
K B Ispat Private Ltd. Company Appeal (AT) (Ins) No. 166 of 2022

> NCLAT judgment dated 2022-05-30. Citation: TCN-2022-NCLAT-00450. The appeal was filed by Subhash Chandra Goyal, the proprietor of Goyal Enterprises, under…

- **Court:** NCLAT
- **Order date:** 30 May 2022
- **Citation:** TCN-2022-NCLAT-00450
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/subhash-chandra-goyal-sole-proprietor-of-goyal-enterprises-vs-k-b-ispat-private-3d78f4a3

## Summary

### Background

The appeal was filed by Subhash Chandra Goyal, the proprietor of Goyal Enterprises, under Section 61 R/w Section 9 of the Insolvency and Bankruptcy Code, 2016, against an order passed by the Adjudicating Authority (National Company Law Tribunal), Ahmedabad Bench. The appellant, an operational creditor, sought to initiate the Corporate Insolvency Resolution Process (CIRP) against K B Ispat Private Ltd, the corporate debtor, for non-payment of dues. The corporate debtor raised concerns about the legitimacy of the appellant's supplier and the input tax credit availed by the appellant, leading to a dispute over the outstanding amount.

## Facts

Subhash Chandra Goyal, the appellant, is the sole proprietor of Goyal Enterprises, an operational creditor. K B Ispat Private Ltd, the respondent, is the corporate debtor. The appellant supplied sponge iron and other goods to the corporate debtor. The business dealings between the parties commenced in 2018. The corporate debtor placed orders with the appellant, who procured materials from supporting manufacturers/suppliers and supplied them directly to the corporate debtor. Tax invoices from May 4, 2019, show supplier references. The appellant supplied 42 consignments of materials, with invoice values ranging from Rs. 5 lac to Rs. 12 lac. The corporate debtor raised debit notes on May 10, 2019, for Rs. 3,32,459/- due to quality issues, which the appellant accepted. The

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was correct in rejecting the application for initiation of CIRP …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016, requires that the debt must be

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**Reasoning:** The Adjudicating Authority found that a pre-existing dispute existed between the

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**Interpretation:** Section 9 of the IBC is interpreted to mean that CIRP can only be initiated if

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**Application:** In this case, the corporate debtor raised a valid dispute regarding the

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## Parties

- **Judges:** Ashok Kumar…; Rakesh…
- **Appellants:** Subhash Chandra…
- **Respondents:** K B Ispat Private…

## Timeline

- **2018-01-01 — Business Dealings…**: Business dealings between the Operational Creditor (OC) and Corporate Debtor (CD)…
- **2019-05-04 — Tax Invoices…**: Operational Creditor issued tax…

## 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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