# In the matter of Sathavahana Ispat Limited C.P.(IB) No. 345-9-HDB-2018

> NCLT judgment dated 2019-09-13. Citation: TCN-2019-NCLT-01471. The case involves a petition filed by Operational Energy Group of India Private Limited…

- **Court:** NCLT
- **Order date:** 13 Sept 2019
- **Citation:** TCN-2019-NCLT-01471
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sathavahana-ispat-limited-cpib-no-345-9-hdb-2018-606becdc

## Summary

### Background

The case involves a petition filed by Operational Energy Group of India Private Limited (Operational Creditor) against Sathavahana Ispat Limited (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. The Operational Creditor claimed that the Corporate Debtor defaulted in repaying a sum of Rs. 1,02,25,414. The petition sought the initiation of Corporate Insolvency Resolution Process (CIRP), a moratorium, and the appointment of an Interim Resolution Professional (IRP). The Operational Creditor and Corporate Debtor had an agreement for operation and maintenance of the Corporate Debtor's power plant. The Operational Creditor alleged that monthly invoices were not settled as per the agreement, leading to the default.

## Facts

The Operational Energy Group of India Private Limited (Operational Creditor) and Sathavahana Ispat Limited (Corporate Debtor) entered into an agreement on 01.08.2014 for the operation and maintenance of the Corporate Debtor's power plant for a period of 3 years, effective from 01.09.2014 to 31.08.2017, with a provision for renewal. According to the agreement, monthly invoices were to be settled within two weeks of receipt. The Operational Creditor claimed that invoices from August 2014 to January 2017 were settled, with the final payment for the January 2017 invoice made on 27.02.2017. The Operational Creditor alleged that the Corporate Debtor defaulted on payments for invoices from February 2017 onwards, leading to a total outstanding of Rs. 1,02,25,414 as of

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## Issues and analysis

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

**Ratio:** A dispute must be a 'real' dispute, not spurious, imaginary, or hypothetical, as

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**Reasoning:** The court reasoned that the Corporate Debtor continued to make payments to the

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**Interpretation:** The court interpreted that the continued payments and the timing of the

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**Application:** The court applied the principle from Mobilox Innovations to the facts of the

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## Parties

- **Judges:** Ratakonda…; Narender Kumar…
- **Appellants:** Operational…
- **Respondents:** Sathavahana Ispat…

## Timeline

- **2014-08-01 — Agreement…**: Operational Creditor and Corporate Debtor entered into an agreement for operation and…
- **2014-09-01 — Agreement Effec…**: The agreement for operation and…

## 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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