# In the matter of Empathy Infra & Engineering Private Limited CP (IB) No.234-Chd-Hry-2018

> NCLT judgment dated 2019-12-19. Citation: TCN-2019-NCLT-00083. Bhuleshwar Steel and Alloys Private Limited filed an application under Section 9 of the…

- **Court:** NCLT
- **Order date:** 19 Dec 2019
- **Citation:** TCN-2019-NCLT-00083
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/empathy-infra-engineering-private-limited-cp-ib-no234-chd-hry-2018-136bbffb

## Summary

### Background

Bhuleshwar Steel and Alloys Private Limited filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against Empathy Infra and Engineering Private Limited. Bhuleshwar claimed that Empathy defaulted on payments for the supply of TMT Bars, iron, and steel material. Empathy argued that there was a pre-existing dispute regarding the quality of the supplied material and that POSCO, with whom Empathy had a project agreement, was a necessary party to the proceedings. The Adjudicating Authority considered the arguments and evidence presented by both parties.

## Facts

Bhuleshwar Steel and Alloys Private Limited (Bhuleshwar) is engaged in the business of manufacturing, sales, and supply of TMT Bars, iron, and steel material. Empathy Infra and Engineering Private Limited (Empathy) placed a purchase order with Bhuleshwar for the supply of steel material. Bhuleshwar supplied material amounting to Rs. 27,10,967/- as per tax invoices. Empathy made payments totaling Rs. 19,00,000/-, leaving a balance of Rs. 8,10,967/-. Bhuleshwar issued a demand notice to Empathy, but no reply was received. Empathy claimed that there was a dispute regarding the quality of the supplied material and that POSCO E & C India Private Limited (POSCO), with whom Empathy had a project agreement, was a necessary party. Empathy argued that the project came under

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## Issues and analysis

### Issue 1: Whether a genuine dispute exists between Bhuleshwar and Empathy regarding the unpaid operational …

**Ratio:** The adjudicating authority must reject the application under Section 9(5)(2)(d) if notice

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**Reasoning:** The Adjudicating Authority considered the arguments of both parties and examined the

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**Interpretation:** The court interpreted the provisions of Section 9(5)(2)(d) of the IBC,

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**Application:** The Adjudicating Authority applied the ratio to the facts of the case, finding

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## Parties

- **Judges:** Ajay Kumar…; Pradeep R.…
- **Appellants:** Bhuleshwar Steel…
- **Respondents:** Empathy Infra and…

## Timeline

- **2015-04-27 — Purchase…**: Empathy placed purchase order No.EIEPL / POSCO / BSAPL / Niv-Hills / 14-15 / 007 for…
- **2015-04-30 — Tax Invo…**: Bhuleshwar supplied material total amounting to Rs.27,10,967/- as per tax invoices…

## 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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