# In the matter of Kelvion India Private Limited C.P. No. 846-IBC-MB-2020

> NCLT judgment dated 2021-09-08. Citation: TCN-2021-NCLT-01156. President Engineering Works filed a Company Petition against Kelvion India Private Limited…

- **Court:** NCLT
- **Order date:** 8 Sept 2021
- **Citation:** TCN-2021-NCLT-01156
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kelvion-india-private-limited-cp-no-846-ibc-mb-2020-99f7ca11

## Summary

### Background

President Engineering Works filed a Company Petition against Kelvion India Private Limited under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) for an amount of Rs. 70,70,701/- (principal) and Rs. 14,64,171/- (interest). The Corporate Debtor opposed the petition, claiming a pre-existing dispute regarding the quality of materials supplied, leading to rework and a debit note of Rs. 31,96,135/-. The Operational Creditor argued that the Corporate Debtor used the supplied material and confirmed the outstanding balance, thus waiving any quality concerns.

## Facts

President Engineering Works (Operational Creditor) filed a petition against Kelvion India Private Limited (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, claiming Rs. 70,70,701/- (principal) and Rs. 14,64,171/- (interest) due under 7 invoices. The Corporate Debtor opposed the petition, asserting a pre-existing dispute regarding the quality of materials supplied, resulting in rework and a debit note of Rs. 31,96,135/- dated 2019-05-23. The Operational Creditor argued that the Corporate Debtor used the supplied material and confirmed an outstanding balance of Rs. 56,06,530/- as of 2019-03-31 via a letter dated 2019-07-18. The Corporate Debtor's lawyer issued a reply notice dated 2019-09-06, acknowledging the demand but denying liability

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## Issues and analysis

### Issue 1: Whether there are pre-existing …

**Ratio:** A plea of pre-existing dispute cannot be sustained if the Corporate Debtor has acted in a

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**Reasoning:** The court reasoned that the Corporate Debtor's confirmation of the outstanding balance

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**Interpretation:** The interpretation hinges on whether the Corporate Debtor's actions

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**Application:** The court applied this principle to the facts by noting that Kelvion India

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## Parties

- **Judges:** H.V. Subb…; Chandra Bha…
- **Appellants:** President…
- **Respondents:** Kelvion India…

## Timeline

- **2019-03-31 — Outstanding Balance…**: Corporate Debtor confirmed an outstanding balance of Rs. 56,06,530/- to the Operational…
- **2019-05-23 — Debit Note…**: Corporate Debtor issued a debit note for Rs.…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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