# In the matter of Oriental Cuisines Private Limited CP-1426-IB-2018

> NCLT judgment dated 2019-03-25. Citation: TCN-2019-NCLT-04357. The case involves a Company Petition filed under Section 9 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 25 Mar 2019
- **Citation:** TCN-2019-NCLT-04357
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/oriental-cuisines-private-limited-cp-1426-ib-2018-b342b3a0

## Summary

### Background

The case involves a Company Petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Oriental Cuisines Private Limited (Corporate Debtor) by Mr. R. Pradeep (Operational Creditor). The petition was based on the Corporate Debtor's alleged default in paying Franchisee Fees of ₹6,00,000 along with interest at 12% per annum. The creditor issued a legal notice on 23.02.2017 demanding the debtor to return ₹6,00,000 paid towards franchisee by way of cheque drawn on 27.10.2015. The Corporate Debtor disputed the claim, asserting that the Creditor was not entitled to a return of the money and made a counter claim demanding damages of ₹13,00,000 along with interest @ 18% per annum.

## Facts

Mr. R. Pradeep (Operational Creditor) filed a Company Petition against M/s. Oriental Cuisines Private Limited (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016. The claim was for unpaid Franchisee Fees of ₹6,00,000 along with 12% interest per annum. The creditor sent a legal notice on 23.02.2017 demanding the return of the franchisee fees paid via cheque on 27.10.2015. The Corporate Debtor disputed the claim on 20.03.2017, asserting the creditor was not entitled to a refund and counterclaimed ₹13,00,000 in damages with 18% interest per annum due to delays caused by the creditor. The creditor issued a Section 8 notice on 22.10.2018, despite the existing dispute. The Corporate Debtor reiterated their dispute in response to the Section 8

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## Issues and analysis

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

**Ratio:** The existence of a pre-existing dispute bars the initiation of corporate insolvency

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**Reasoning:** The court reasoned that the Corporate Debtor had raised a dispute regarding the claim on

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**Interpretation:** The interpretation of 'pre-existing dispute' is crucial in determining the

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**Application:** In this case, the Corporate Debtor raised the dispute on 20.03.2017, well

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## Parties

- **Judges:** B.S.V. Prakash…; S. VIJAYARA…
- **Appellants:** R. Pra…
- **Respondents:** M/s. Oriental…
- **Advocates:** Savitha…

## Timeline

- **2015-10-27 — Cheque D…**: Cheque drawn towards…
- **2017-02-23 — Legal Notice by…**: Creditor issued a legal notice…

## 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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