# In the matter of AS Sales and Exports Private Limited C.P.(IB) No.96-KB-2018

> NCLT judgment dated 2018-07-09. Citation: TCN-2018-NCLT-01176. The case involves an application filed by Seco Tools India Private Limited, the Operational…

- **Court:** NCLT
- **Order date:** 9 Jul 2018
- **Citation:** TCN-2018-NCLT-01176
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/as-sales-and-exports-private-limited-cpib-no96-kb-2018-d09223ef

## Summary

### Background

The case involves an application filed by Seco Tools India Private Limited, the Operational Creditor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against A.S. Sales & Exports Private Limited, the Corporate Debtor. The application is based on the Corporate Debtor's alleged default in paying an outstanding amount of Rs. 30,48,667/- (principal plus interest) for goods sold and supplied by the Operational Creditor. The Corporate Debtor contested the application, claiming a dispute regarding the quality of the goods supplied.

## Facts

Seco Tools India Private Limited (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against A.S. Sales & Exports Private Limited (Corporate Debtor) for defaulting on a payment of Rs. 30,48,667/-. This amount includes a principal of Rs. 21,17,481/- and interest of Rs. 9,31,186/-. The debt arose from the Operational Creditor selling and supplying goods (Tungsten Carbide "RCMX 2507 1500T") to the Corporate Debtor between 2014-12-17 and 2015-01-31, worth Rs. 21,78,481/-. The Operational Creditor issued a demand notice under Section 8 of the I&B Code on 2017-08-18, which was received by the Corporate Debtor. The Corporate Debtor claimed a dispute over the quality of goods, stating they were intended for

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## Issues and analysis

### Issue 1: Whether Corporate Debtor could establish the existence of dispute about the quality of goods …

**Ratio:** The existence of a genuine dispute regarding the quality of goods supplied can be a valid

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**Reasoning:** The court reasoned that the Corporate Debtor had accepted the goods supplied by the

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**Interpretation:** The court interpreted Section 5(6)(b) and Section 8 of the I&B Code, 2016,

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**Application:** The court applied the ratio to the facts of the case, noting that the Corporate

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## Parties

- **Judges:** Madan B.…
- **Appellants:** SECO TOOLS INDIA…
- **Respondents:** AS SALES AND…
- **Advocates:** Aritra…; Poonam Keswani…; +4 more

## Timeline

- **2014-12-17 — Goods Sold and…**: Operational Creditor sold and supplied goods to the Corporate Debtor between 2014-12-17…
- **2015-01-31 — Goods Sold and…**: Operational Creditor sold and supplied goods to the Corporate Debtor between 2014-12-17…

## 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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