# In the matter of KB Ispat Private Limited CP (IB) No. 555-9-NCLT-AHM-2019

> NCLT judgment dated 2021-12-01. Citation: TCN-2021-NCLT-00324. The case involves an application filed under Section 9 of the Insolvency & Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 1 Dec 2021
- **Citation:** TCN-2021-NCLT-00324
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kb-ispat-private-limited-cp-ib-no-555-9-nclt-ahm-2019-9d099a16

## Summary

### Background

The case involves an application filed under Section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) by Mr. Subhash Chandra Goyal, the sole proprietor of M/s Goyal Enterprises, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, M/s KB Ispat Private Limited, for a default amount of Rs. 26,89,290. The Operational Creditor claimed to have business relations with the Corporate Debtor since September 2018, delivering 42 consignments with invoices ranging from Rs. 5 to 12 lakh each. The Corporate Debtor raised three debit notes against these invoices, claiming a total of Rs. 3,32,459 from the Operational Creditor. The Operational Creditor argued that these debit notes were merely to show a pre-existing dispute without

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## Facts

Mr. Subhash Chandra Goyal, the sole proprietor of M/s Goyal Enterprises (Operational Creditor), filed an application under Section 9 of the Insolvency & Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s KB Ispat Private Limited (Corporate Debtor) for a default of Rs. 26,89,290. The Operational Creditor claimed to have supplied 42 consignments to the Corporate Debtor since September 2018, with invoices totaling between Rs. 5 to 12 lakh each. Three invoices amounting to Rs. 26,89,290 remained unpaid. The Corporate Debtor raised three debit notes against these invoices, claiming Rs. 3,32,459 from the Operational Creditor. A demand notice was issued on 01.07.2019 and received by the Corporate Debtor on 06.07.2019, but no

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## Issues and analysis

### Issue 1: Whether a pre-existing dispute exists between the Operational Creditor and the Corporate Debtor …

**Ratio:** A pre-existing dispute, as defined under Section 5(6) of the IBC, exists when there is a

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**Reasoning:** The Adjudicating Authority considered the alert circular issued by the Commissioner of

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**Interpretation:** Section 5(6) of the IBC defines a 'dispute' as including a suit or arbitration

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**Application:** In this case, the Adjudicating Authority found that the Corporate Debtor's

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## Parties

- **Judges:** Madan B.…; Ajai Das Me…
- **Appellants:** Subhash Chandra…
- **Respondents:** KB Ispat Private…; K B Ispat P…

## Timeline

- **2018-09-01 — Business Relati…**: Operational Creditor and Corporate…
- **2019-03-25 — Alert Circula…**: Commissioner of Central Goods Service Tax and Central Excise issues an alert circular…

## 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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