# In the matter of Sudhir Sales & Services Ltd. Vs. D-Art Furniture Systems Pvt. Ltd. CA (AT) No. 327-2018

> NCLAT judgment dated 2018-10-04. Citation: TCN-2018-NCLAT-00093. This case involves an appeal against an order by the Adjudicating Authority (National Company…

- **Court:** NCLAT
- **Order date:** 4 Oct 2018
- **Citation:** TCN-2018-NCLAT-00093
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/sudhir-sales-services-ltd-vs-d-art-furniture-systems-pvt-ltd-ca-aba8d5a7

## Summary

### Background

This case involves an appeal against an order by the Adjudicating Authority (National Company Law Tribunal) that rejected an application filed by Sudhir Sales & Services Ltd. (Operational Creditor) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (I&B Code) for initiating a Corporate Insolvency Resolution Process against D-Art Furniture Systems Pvt. Ltd. (Corporate Debtor). The Adjudicating Authority rejected the application based on the existence of a dispute. The appellant argues that no dispute exists and that the Adjudicating Authority wrongly considered unrelated communications. The respondent contends that a dispute exists, as evidenced by a letter dated 13th November 2013, and has questioned the quality of materials supplied by the appellant.

## Facts

Sudhir Sales & Services Ltd. (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process against D-Art Furniture Systems Pvt. Ltd. (Corporate Debtor). The application was based on unpaid dues related to a contract for the supply, installation, maintenance, and removal of Gen sets for the Commonwealth Games 2010 in Delhi. The initial contract value was Rs. 1,62,49,360.00, later increased to Rs. 1,93,20,620.00. The Operational Creditor raised invoices for Rs. 2,89,41,684.00, against which Rs. 28,65,776.00 in credit notes were issued, resulting in a net invoice value of Rs. 2,60,75,908.00. The Corporate Debtor paid Rs. 1,99,05,742.00, leaving a balance of Rs. 61,70,161.00,

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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 legal principle is that a pre-existing dispute, as defined under the I&B Code,

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**Reasoning:** The court reasoned that the letter dated 13th November 2013 did not dispute the claim or

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**Interpretation:** The interpretation of 'pre-existing dispute' is based on the Supreme Court's

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**Application:** The court applied this principle to the facts of the case, finding that the

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## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…
- **Appellants:** Sudhir Sales &…
- **Respondents:** D-Art Furniture…
- **Advocates:** S. N.…; Manish…; +5 more

## Timeline

- **2010-01-01 — Contract for…**: Contract reached between D-Art Furniture Systems Pvt Ltd. and Sudhir Sales & Services…
- **2010-09-02 — Contract Value…**: The total contract value agreed between the parties was subsequently enhanced to Rs.…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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