# In the matter of Industrial Enviro and Engineering Services Private Limited Company Application No. CP (IB) 12-NCLT-AHM-2021

> NCLT judgment dated 2022-04-25. Citation: TCN-2022-NCLT-03097. The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 25 Apr 2022
- **Citation:** TCN-2022-NCLT-03097
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/industrial-enviro-and-engineering-services-private-limited-company-application-n-65d3625f

## Summary

### Background

The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) by Tirupati Starch & Chemicals Ltd. (Operational Creditor) against Industrial Enviro & Engineering Services Private Limited (Corporate Debtor) for initiation of the Corporate Insolvency Resolution Process (CIRP). The applicant claimed that the corporate debtor failed to rectify defects in a Waste Water Recycle System supplied and installed by the corporate debtor, despite payments made by the applicant. The corporate debtor contended that there were disputes regarding the quality of goods and services, and that the applicant had not allowed their engineers to operate the plant properly.

## Facts

Tirupati Starch & Chemicals Ltd. (the applicant) placed an order on 26.05.2018 with Industrial Enviro & Engineering Services Private Limited (the corporate debtor) for the supply and installation of a Waste Water Recycle System. The corporate debtor was to complete the installation by 17.09.2018. The total price was Rs. 1,77,00,000/- inclusive of taxes. The applicant paid an advance of 10% on 29.05.2018 and made total payments of Rs. 1,68,20,000/-. The applicant claimed that the plant supplied was under-capacity and not giving desired results. Despite several communications, the corporate debtor allegedly failed to rectify the defects. The applicant sent a cancellation letter on 05.10.2020. A demand notice was issued on 04.12.2020. The corporate debtor claimed

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## Issues and analysis

### Issue 1: Whether the application under Section 9 of the IBC can be admitted given the existence of a …

**Ratio:** The existence of a genuine pre-existing dispute between the operational creditor and the

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**Reasoning:** The NCLT considered the email communications and correspondences between the parties,

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**Interpretation:** The Supreme Court in Mobilox case clarified that the Adjudicating Authority

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**Application:** In this case, the NCLT found that the disputes regarding the quality of the

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## Parties

- **Judges:** DEEPTI M…; Ajai Das Me…
- **Appellants:** Tirupati Starch…
- **Respondents:** Industrial Enviro…

## Timeline

- **2018-05-26 — Purchase…**: Applicant placed an order for supply and…
- **2018-05-29 — Advance P…**: Applicant paid 10%…

## 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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