# In the matter of Sharp Corp Limited Comany Petition No. IB-1728-ND-2018

> NCLT judgment dated 2019-02-12. Citation: TCN-2019-NCLT-04887. CIL Australia North Pty Limited, the operational creditor, filed an application under Section 9…

- **Court:** NCLT
- **Order date:** 12 Feb 2019
- **Citation:** TCN-2019-NCLT-04887
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sharp-corp-limited-comany-petition-no-ib-1728-nd-2018-6a535bce

## Summary

### Background

CIL Australia North Pty Limited, the operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Sharp Corp Limited, the corporate debtor. The application was based on the corporate debtor's alleged default in payment obligations under two settlement agreements related to the sale of Australian Desi Chickpeas. The corporate debtor disputed the execution and validity of the settlement agreements, claiming a pre-existing dispute. The operational creditor had previously entered into contracts with the corporate debtor for the sale of chickpeas, but the corporate debtor defaulted on payments, leading to arbitration proceedings and subsequent

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## Facts

CIL Australia North Pty Limited (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Sharp Corp Limited (Corporate Debtor). The application was based on default in payment obligations under two settlement agreements. The Operational Creditor and Corporate Debtor had a business relationship involving the sale of Australian Desi Chickpeas. The Corporate Debtor defaulted on payments, leading to arbitration. Two settlement agreements were reached: one on May 14, 2018, and another on June 5, 2018. The Corporate Debtor defaulted again, failing to make payments as per the settlement agreements. The Operational Creditor issued a demand notice on October

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## Issues and analysis

### Issue 1: Whether a pre-existing dispute exists between the operational creditor and the corporate debtor, …

**Ratio:** The existence of a 'dispute' as defined under Section 5(6) of the Insolvency and

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**Reasoning:** The court relied on the Supreme Court's judgment in Mobilox Innovations Private Limited

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**Interpretation:** The term 'dispute' should be interpreted broadly to cover all disputes on debt,

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**Application:** In this case, the corporate debtor filed a civil suit challenging the

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## Parties

- **Judges:** DEEPTI M…
- **Appellants:** CIL AUSTRALIA…
- **Respondents:** M/s SHARP CORP…

## Timeline

- **2017-10-31 — Invoices…**: Invoices raised by the applicant on the…
- **2018-05-14 — First Settlement…**: Operational Creditor and Corporate Debtor arrived at a settlement documented in a…

## 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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