# In the matter of EDAC Engineering Limited IBA-432-2020

> NCLT judgment dated 2023-03-22. Citation: TCN-2023-NCLT-04102. The case involves an application filed by M/s. Fagioli India Private Limited (Operational…

- **Court:** NCLT
- **Order date:** 22 Mar 2023
- **Citation:** TCN-2023-NCLT-04102
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/edac-engineering-limited-iba-432-2020-5c7e9620

## Summary

### Background

The case involves an application filed by M/s. Fagioli India Private Limited (Operational Creditor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. EDAC Engineering Limited (Corporate Debtor). The Operational Creditor claimed an outstanding amount of Rs. 47,68,143/- from the Corporate Debtor, arising from work orders issued for executing skidding/dragging and positioning of HP & LP Condenser and lifting and placement of generator stator. The Corporate Debtor argued that there was a pre-existing dispute and had invoked the arbitration clause in the work orders, leading to the appointment of an arbitrator by the High Court.

## Facts

M/s. Fagioli India Private 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. EDAC Engineering Limited (Corporate Debtor). The Operational Creditor claimed an outstanding debt of Rs. 47,68,143/-, comprising Rs. 40,92,826/- as principal debt and Rs. 6,75,317/- as interest, arising from work orders issued by the Corporate Debtor. The work orders pertained to executing skidding/dragging and positioning of HP & LP Condenser of Unit 1 and Unit 2 x 660 MW TANDA STPP Uttar Pradesh and lifting and placement of generator stator at 1 x 150 MW Nagai Power Plant. The Operational Creditor completed work at the sites and raised invoices. However,

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## Issues and analysis

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

**Ratio:** The ratio is based on the Supreme Court's decision in Mobilox Innovations Private Limited

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**Reasoning:** The NCLT reasoned that the Corporate Debtor had sent mails prior to the initiation of

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**Interpretation:** The interpretation is that a 'dispute' under Section 8 of the IBC includes any

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**Application:** In this case, the NCLT applied the ratio by noting that the Corporate Debtor

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## Parties

- **Judges:** SANJIV…; SAMEER…
- **Appellants:** Fagioli India Pvt…
- **Respondents:** EDAC Engineering…; EDAC Engineering…

## Timeline

- **1987-06-26 — Incorporation of…**: M/s. EDAC Engineering Limited…
- **2017-03-30 — Date of D…**: The date of default…

## 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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