# In the matter of Powerforge Engineering Private Limited Company Petition No. (IB)-151-9-JPR-2019

> NCLT judgment dated 2020-09-07. Citation: TCN-2020-NCLT-00695. BMSS Steel Industries Private Limited filed an application under Section 9 of the Insolvency…

- **Court:** NCLT
- **Order date:** 7 Sept 2020
- **Citation:** TCN-2020-NCLT-00695
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/powerforge-engineering-private-limited-company-petition-no-ib-151-9-jpr-2019-fb5582b6

## Summary

### Background

BMSS Steel Industries Private Limited filed an application under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, against Powerforge Engineering Private Limited, claiming to be an operational creditor. The applicant alleged that Powerforge defaulted on payments for supplied tools and die steel, with outstanding invoices totaling Rs. 18,25,181/-. The applicant claimed a total default amount of Rs. 22,73,431/-, including interest and legal expenses. Powerforge disputed several invoices, citing defects in the supplied die blocks and raising debit notes. The applicant argued that these disputes were raised belatedly and were intended to delay the payment. The application was filed through Mr. Rajiv Himatlal Goradia, an Authorised Representative of the Applicant.

## Facts

BMSS Steel Industries Private Limited (Applicant) supplied tools and die steel to Powerforge Engineering Private Limited (Respondent/Corporate Debtor). The applicant raised invoices worth Rs. 18,25,181/- against purchase orders. The respondent made payments periodically, maintaining a continuous account. The first instance of default occurred on 18.03.2018. The applicant sent a demand notice in Form 3 dated 12.04.2019. The total amount claimed to be in default was Rs. 22,73,431/-, including interest @ 18% per month and legal expenses. The respondent raised disputes regarding the quality of the supplied die blocks, claiming defects and issuing debit notes. The applicant argued that these disputes were raised belatedly, after a gap of 15-30 months from the date of the

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## Issues and analysis

### Issue 1: Whether there was a pre-existing dispute regarding the invoices claimed by the Applicant before the …

**Ratio:** The existence of a dispute and/or the suit or arbitration proceeding must be

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**Reasoning:** The court observed that the Respondent raised disputes about some invoices after a

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**Interpretation:** The Supreme Court's observation in Mobilox Innovations Private Limited v.

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**Application:** In this case, the court found that the Respondent had not been able to

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## Parties

- **Judges:** P.S.N. P…; RAGHU N…; +1 more
- **Appellants:** BMSS Steel…
- **Respondents:** Powerforge…
- **Advocates:** Divesh S…; Amol…

## Timeline

- **2018-03-18 — First Incidence of…**: The Applicant stated that the first…
- **2019-04-12 — Demand Noti…**: The Applicant sent a Demand Notice in…

## 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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