# In the matter of EDAC Engineering Limited CP(IB)-01(CHE)-2022

> NCLT judgment dated 2023-02-15. Citation: TCN-2023-NCLT-04585. Sunrise Industries (India) Limited filed an application under Section 9 of the Insolvency &…

- **Court:** NCLT
- **Order date:** 15 Feb 2023
- **Citation:** TCN-2023-NCLT-04585
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/edac-engineering-limited-cpib-01che-2022-62cbb009

## Summary

### Background

Sunrise Industries (India) Limited filed an application under Section 9 of the Insolvency & Bankruptcy Code, 2016, seeking the commencement of the Corporate Insolvency Resolution Process (CIRP) against EDAC Engineering Limited, the Corporate Debtor. The Operational Creditor claimed a total due of Rs. 136.14 lakhs, including unpaid invoices and interest. The Corporate Debtor raised objections, including the existence of pre-existing disputes and the claim exceeding the threshold limit under Section 4 of the IBC. The Respondent had also invoked the Arbitration clause and issued a notice to the Petitioner.

## Facts

Sunrise Industries (India) Limited, the Operational Creditor, filed an application under Section 9 of the Insolvency & Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against EDAC Engineering Limited, the Corporate Debtor. The Operational Creditor claimed a total due of Rs. 136.14 lakhs, comprising Rs. 71.82 lakhs as pending principal amount and Rs. 64.31 lakhs as unpaid interest calculated at 24% per annum. The debt allegedly fell due on 18.04.2018. The Corporate Debtor contested the application, asserting that the unpaid due was below the threshold limit and that there was a pre-existing dispute between the parties. The Corporate Debtor had issued a notice to the Petitioner on 06.02.2020, stating that no amount was due.

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor under Section 9 of the Insolvency & …

**Ratio:** The ratio decidendi is derived from the Supreme Court's judgment in Mobilox Innovations

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**Reasoning:** The Adjudicating Authority reasoned that the Corporate Debtor had raised a plausible

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**Interpretation:** The interpretation of Section 9(5)(ii)(d) of the IBC, as clarified by the

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**Application:** In this case, the Adjudicating Authority applied the ratio from Mobilox

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## Parties

- **Judges:** (RETD.) RAMALINGAM…; SAMEER…
- **Appellants:** Sunrise Industries…
- **Respondents:** EDAC Engineering…

## Timeline

- **2018-04-18 — Debt Fel…**: The operational debt claimed by Sunrise…
- **2018-07-11 — Last Payment…**: The Operational Creditor received the…

## 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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