# 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-00085. 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-00085
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/empathy-infra-engineering-private-limited-cp-ib-no234-chd-hry-2018-9054c315

## 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 had defaulted on payments for the supply of TMT Bars, iron, and steel material. Empathy contested the application, arguing that a dispute existed regarding the debt due to ongoing litigation with POSCO E & C India Private Limited, with whom Empathy had an agreement for a construction project. Empathy claimed that Bhuleshwar was aware of this litigation and that POSCO was a necessary party to the proceedings.

## Facts

Bhuleshwar Steel and Alloys Private Limited (Bhuleshwar) is an operational creditor engaged in the business of manufacturing, sales, and supply of TMT Bars, iron, and steel material. Empathy Infra and Engineering Private Limited (Empathy) is the corporate debtor. Bhuleshwar supplied steel material to Empathy based on purchase order No.EIEPL / POSCO / BSAPL / Niv-Hills / 14-15 / 007, dated 27.04.2015, amounting to Rs.27,10,967/-. Empathy made payments totaling Rs.19,00,000/-, leaving a balance of Rs.8,10,967/-. Bhuleshwar issued a demand notice dated 01.11.2017 to Empathy, which was duly served. Empathy did not provide any reply to the demand notice, nor did it raise any dispute regarding the unpaid operational debt. Empathy claimed that it had an agreement with POSCO E

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## Issues and analysis

### Issue 1: Whether the application filed by the operational creditor, Bhuleshwar Steel and Alloys Private …

**Ratio:** Section 9(5)(i) of the Insolvency and Bankruptcy Code, 2016, specifies the conditions

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**Reasoning:** The NCLT found that the application filed by Bhuleshwar was complete, there was

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**Interpretation:** Section 9 of the IBC allows an operational creditor to initiate CIRP against a

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**Application:** In this case, the NCLT determined that Bhuleshwar's application was complete

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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 totaling Rs.27,10,967/- as per tax invoices No.0453 and…

## 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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