# In the matter of Dilip Buildcon Limited

> NCLT judgment dated 2023-11-02. Citation: TCN-2023-NCLT-00865. Steel Scaff (India) Private Limited, the applicant/operational creditor, filed an application…

- **Court:** NCLT
- **Order date:** 2 Nov 2023
- **Citation:** TCN-2023-NCLT-00865
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/dilip-buildcon-limited-afa3d241

## Summary

### Background

Steel Scaff (India) Private Limited, the applicant/operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Dilip Buildcon Limited, the respondent/corporate debtor. The applicant claimed a default of Rs.2,62,32,195/-, including a principal amount of Rs.1,49,97,323/- and interest of Rs.1,12,34,872/-. The applicant contended that the respondent approached them in 2017 for the supply of scaffolding equipment for various projects and issued purchase orders in early 2018. The applicant supplied the equipment and raised invoices, against which the respondent initially made timely payments. However, payments for ten invoices remained outstanding. The

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## Facts

Steel Scaff (India) Private Limited (Applicant) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Dilip Buildcon Limited (Respondent). The Applicant claimed a default of Rs. 2,62,32,195/-, including principal and interest. The Applicant supplied scaffolding equipment to the Respondent for various projects based on purchase orders issued in 2018. The Respondent initially made timely payments but failed to pay for ten invoices. The Applicant sent a demand notice on 05.03.2020, which the Respondent denied, citing sub-standard material quality. The Respondent claimed that internal vigilance in February 2018 revealed discrepancies in the supplied materials. The Respondent also

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## Issues and analysis

### Issue 1: Whether a pre-existing dispute existed between the operational creditor (Steel Scaff) and the …

**Ratio:** A pre-existing dispute, if proven, bars the initiation of CIRP under Section 9 of the

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**Reasoning:** The NCLT reasoned that the legal notice dated 07.05.2018, issued by the respondent,

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**Interpretation:** The interpretation hinges on whether the respondent's communication clearly

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**Application:** The NCLT applied the ratio to the facts by determining that the respondent's

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## Parties

- **Judges:** P. Moha…; KAUSHALENDRA…
- **Appellants:** Steel Scaff…
- **Respondents:** Dilip Buildcon…

## Timeline

- **2017-01-01 — Respondent Approached…**: Dilip Buildcon approached Steel Scaff for the supply of scaffolding equipment for various…
- **2018-01-09 — Purchase Order…**: Dilip Buildcon issued purchase orders to Steel Scaff on 09.01.2018, 24.02.2018,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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