# In the matter of Bagalkot Cement & Industries Ltd.

> NCLT judgment dated 2023-09-11. Citation: TCN-2023-NCLT-01716. Vyshali Energy Private Limited (VEPL), the Operational Creditor, filed a Company Petition…

- **Court:** NCLT
- **Order date:** 11 Sept 2023
- **Citation:** TCN-2023-NCLT-01716
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bagalkot-cement-industries-ltd-8e8030b6

## Summary

### Background

Vyshali Energy Private Limited (VEPL), the Operational Creditor, filed a Company Petition seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Bagalkot Cement and Industries Ltd, the Corporate Debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Corporate Debtor filed Interlocutory Application/2070 of 2022 seeking dismissal of the Company Petition, alleging pre-existing disputes and failure to meet the threshold of Rs. 1 Crore. The Operational Creditor and Corporate Debtor had entered into an Energy Purchase Agreement dated 10.04.2017 for the sale and supply of energy. The Operational Creditor supplied power to the Corporate Debtor from March 2017 to February 2021.

## Facts

Vyshali Energy Private Limited (VEPL), the Operational Creditor, is engaged in the business of generation and sale of renewable energy. VEPL and Bagalkot Cement and Industries Ltd, the Corporate Debtor, entered into an Energy Purchase Agreement on 10.04.2017 for the supply of energy. VEPL supplied power to the Corporate Debtor from March 2017 to February 2021. VEPL raised tax invoices for the supply of power. The Corporate Debtor failed to make payments towards the invoices. VEPL issued a demand notice dated 02.03.2022 demanding a sum of Rs. 7,42,50,734/-. The Corporate Debtor issued a reply dated 16.03.2022 alleging pre-existing disputes. The Corporate Debtor filed IA/2070/2022 challenging the maintainability of the Company Petition, claiming that the invoice dated

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## Issues and analysis

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

**Ratio:** The initiation of arbitration proceedings after the issuance of the demand notice does

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**Reasoning:** The NCLT reasoned that the arbitration proceeding was initiated on 17.03.2022, whereas

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**Interpretation:** A pre-existing dispute must exist before the issuance of the demand notice to

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**Application:** In this case, the arbitration invocation notice was issued by the Corporate

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## Parties

- **Judges:** Charanjeet Singh…; LAKSHMI G…
- **Appellants:** Vyshali Energy…
- **Respondents:** M/s. Bagalkot…

## Timeline

- **2017-04-10 — Energy Purchase…**: Operational Creditor and Corporate Debtor entered into an 'Energy Purchase Agreement' for…
- **2017-03-01 — Power Su…**: Operational Creditor supplied power to the Corporate Debtor from March 2017 to February…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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