# In the matter of R.L Steels and Energy Ltd. IB No. 492-ND-2017

> NCLT judgment dated 2018-04-03. Citation: TCN-2018-NCLT-01610. OPGS Power Gujarat Private Limited, the Operational Creditor (OC), filed an application under…

- **Court:** NCLT
- **Order date:** 3 Apr 2018
- **Citation:** TCN-2018-NCLT-01610
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/rl-steels-and-energy-ltd-ib-no-492-nd-2017-17b64214

## Summary

### Background

OPGS Power Gujarat Private Limited, the Operational Creditor (OC), filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against R.L.Steels and Energy Limited, the Corporate Debtor (CD), due to unpaid operational debt. The OC claimed that the CD defaulted on payments for power supplied under a Power Supply Agreement (PSA). The CD contested the application, arguing that there was a pre-existing dispute regarding the quality and pricing of the power supplied, and that the OC had suppressed material facts. The CD also claimed that the OC had breached the PSA by non-supply of power and that a civil suit was pending before the District Court of Aurangabad regarding the recovery of

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## Facts

OPGS Power Gujarat Private Limited (OC) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against R.L.Steels and Energy Limited (CD) for an unpaid operational debt of Rs.6,98,03,036/-. The debt arose from the supply of power by OC to CD under a Power Supply Agreement (PSA) dated 24.7.2016. The OC issued invoices for the power supplied between 27.08.2016 and 1.10.2016. The CD failed to make payments, leading to the OC issuing a notice of demand dated 12.09.2017. The CD responded to the notice of demand on 19.10.2017, claiming a pre-existing dispute. The CD argued that the OC had breached the PSA by non-supply of power and that a civil suit was pending before the District Court of

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## Issues and analysis

### Issue 1: Whether there was a pre-existing dispute between the Operational Creditor (OC) and the Corporate …

**Ratio:** The existence of a pre-existing dispute, meaning a dispute that existed before the

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**Reasoning:** The NCLT found that the dispute between the OC and the CD predated 2017 and involved a

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**Interpretation:** The interpretation of 'pre-existing dispute' under the IBC, 2016, as clarified

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**Application:** In this case, the NCLT applied the ratio by examining the evidence presented by

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## Parties

- **Judges:** R. VARADH…
- **Appellants:** OPGS Power…
- **Respondents:** R.L.Steels and…

## Timeline

- **2016-07-24 — Power Supply Agreement…**: Power Supply Agreement (PSA) was…
- **2016-08-01 — Invoices…**: Invoices were raised by OC against…

## 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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