# In the matter of Panchsheel Realtech Pvt. Ltd. (IB)-1119(ND)-2018

> NCLT judgment dated 2018-12-17. Citation: TCN-2018-NCLT-00064. The case involves an operational creditor, M/s. Sarvottam Rolling Mills Pvt. Ltd., who supplied…

- **Court:** NCLT
- **Order date:** 17 Dec 2018
- **Citation:** TCN-2018-NCLT-00064
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/panchsheel-realtech-pvt-ltd-ib-1119nd-2018-96b0dac9

## Summary

### Background

The case involves an operational creditor, M/s. Sarvottam Rolling Mills Pvt. Ltd., who supplied steel to the corporate debtor, M/s. Panchsheel Realtech Pvt. Ltd., based on a purchase order dated 17.10.2016. The operational creditor claims non-payment of Rs. 34,33,750/- under three invoices raised in October 2016. Despite repeated requests, the corporate debtor, involved in real estate projects, failed to liquidate the outstanding liability. The operational creditor issued a demand notice under Section 8 of the Insolvency and Bankruptcy Code (IBC), 2016, and subsequently filed a petition to initiate the Corporate Insolvency Resolution Process (CIRP).

## Facts

M/s. Sarvottam Rolling Mills Pvt. Ltd. (Operational Creditor) supplied steel to M/s. Panchsheel Realtech Pvt. Ltd. (Corporate Debtor) based on a purchase order dated 17.10.2016. The Operational Creditor claimed non-payment of Rs. 34,33,750/- under three invoices raised in October 2016. The Corporate Debtor disputed the claim, alleging inflation and lack of agreement for interest. The Corporate Debtor also claimed a recent discovery of short supply of material, leading to an FIR. The Operational Creditor issued a demand notice under Section 8 of IBC, 2016, before filing the petition. The Corporate Debtor did not raise any prior dispute about the quality or quantity of the supplied steel before the petition was filed. The Corporate Debtor's defense was based on an FIR

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## Issues and analysis

### Issue 1: Whether the dispute raised by the Corporate Debtor regarding the quality and quantity of supplied …

**Ratio:** A dispute raised as a defense against the initiation of CIRP must be a pre-existing

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**Reasoning:** The court found that the Corporate Debtor did not raise any dispute regarding the quality

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**Interpretation:** The court interpreted that raising a dispute after the filing of the petition,

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**Application:** The court applied the ratio to the facts by noting that the Corporate Debtor's

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## Parties

- **Judges:** Ina Mal…; DeepaKr…
- **Appellants:** M/s. Sarvottam…
- **Respondents:** M/s. Panchsheel…

## Timeline

- **2016-10-17 — Purchase Ord…**: Date of the purchase order placed by the…
- **2016-10-01 — Invoices…**: The Operational Creditor raised three invoices in October 2016 for a total amount of Rs.…

## 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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