# In the matter of VDS Plastics Pvt. Ltd. Vs. Pal Mohan Electronics (P) Ltd. CA (AT) No. 58-2017

> NCLAT judgment dated 2017-09-14. Citation: TCN-2017-NCLAT-00119. The Appellant, an Operational Creditor, filed an application under Section 9 of the…

- **Court:** NCLAT
- **Order date:** 14 Sept 2017
- **Citation:** TCN-2017-NCLAT-00119
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/vds-plastics-pvt-ltd-vs-pal-mohan-electronics-0cd25cdb

## Summary

### Background

The Appellant, an Operational Creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor. The Adjudicating Authority (National Company Law Tribunal), New Delhi Bench, rejected the application, citing the existence of a dispute. The Appellant challenged this decision, arguing that the dispute was not genuine but merely an attempt to avoid payment.

## Facts

VDS Plastics Pvt. Ltd., the Appellant (Operational Creditor), filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process against Pal Mohan Electronics (P) Ltd., the Respondent (Corporate Debtor). The Adjudicating Authority rejected the application because a dispute existed. The Appellant argued that the dispute was not genuine. A statutory notice for winding up under section 433(e) and 434(1)(a) of the Companies Act, 1956 was issued by the appellant to the respondent. The appellant claimed that goods and materials worth Rs.1,48,37,586/- were supplied to the Corporate Debtor, and a partial payment of Rs.57,56,610/- was received, leaving a balance of Rs.90,80,976/- outstanding.

## Issues and analysis

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

**Ratio:** The existence of a genuine dispute is a valid ground for rejecting an application for

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**Reasoning:** The court found no reason to interfere with the Adjudicating Authority's decision, which

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**Interpretation:** The interpretation of Section 9 of the IBC hinges on the definition and scope

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**Application:** In this case, the Adjudicating Authority determined that a dispute existed. The

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## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…; +1 more
- **Appellants:** VDS Plastics Pvt.…
- **Respondents:** Pal Mohan…
- **Advocates:** D. Mo…; K.K.Sh…; +1 more

## Timeline

- **2016-08-01 — Statutory Noti…**: Appellant issued a statutory notice for winding up to the respondent under section 433(e)…
- **2017-04-21 — Application R…**: The Adjudicating Authority (National Company Law Tribunal) rejected the application for…

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