# In the matter of Tirupati Starch and Chemicals Ltd. Vs.
Industrial Enviro & Engineering Services Pvt. Ltd. Company Appeal (AT) (Insolvency) No. 742 of 2022

> NCLAT judgment dated 2022-07-13. Citation: TCN-2022-NCLAT-00367. The appeal was filed against an order dated April 25, 2022, by which the Adjudicating…

- **Court:** NCLAT
- **Order date:** 13 Jul 2022
- **Citation:** TCN-2022-NCLAT-00367
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/tirupati-starch-and-chemicals-ltd-vs-industrial-enviro-engineering-services-pvt-c577c902

## Summary

### Background

The appeal was filed against an order dated April 25, 2022, by which the Adjudicating Authority rejected an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC). The Appellant-Operational Creditor had issued a Purchase Order dated May 26, 2018, to the Corporate Debtor for the supply and installation of a 'West Water Recycle System'. Amounts were paid to the Corporate Debtor, and the Corporate Debtor delivered the 'West Water Recycling Plant' on the site of the Applicant. The Appellant claims to have cancelled the entire Purchase Order by email dated October 5, 2020. Following the cancellation, the Appellant filed a Section 9 application of the IBC, claiming a refund of the entire amount paid, alleging default of not refunding the amount.

## Facts

Tirupati Starch and Chemicals Ltd. (Appellant/Operational Creditor) issued a Purchase Order to a Corporate Debtor for the supply and installation of a 'West Water Recycle System' on May 26, 2018. The Appellant paid amounts to the Corporate Debtor, and the Corporate Debtor delivered the plant to the Applicant's site. Subsequently, the Appellant claims to have cancelled the Purchase Order via email on October 5, 2020. Following the cancellation, the Appellant filed a Section 9 application under the IBC, claiming a refund of the amount paid, alleging default. The Corporate Debtor opposed the application, stating that work was performed as per the order. The Adjudicating Authority rejected the application, finding a genuine pre-existing dispute based on materials on

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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:** Section 9 of the IBC requires the Adjudicating Authority to reject an application if

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**Reasoning:** The Adjudicating Authority found that there was a genuine pre-existing dispute based on

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**Interpretation:** The existence of a genuine pre-existing dispute is a bar to the admission of an

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**Application:** In this case, the Adjudicating Authority found that the email dated December

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## Parties

- **Judges:** Ashok Bh…; M. Satyanarayana…; +1 more
- **Appellants:** Tirupati Starch…
- **Respondents:** Industrial Enviro…

## Timeline

- **2018-05-26 — Purchase Orde…**: Appellant-Operational Creditor issued a Purchase Order to the Corporate Debtor for supply…
- **2019-12-23 — Email Indicatin…**: Email on record indicating a…

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