# In the matter of Jai Mata Engineering Private Ltd.

> NCLT judgment dated 2023-09-26. Citation: TCN-2023-NCLT-01467. The case involves an application filed by Narender Steel & Alloys (Operational Creditor) under…

- **Court:** NCLT
- **Order date:** 26 Sept 2023
- **Citation:** TCN-2023-NCLT-01467
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/jai-mata-engineering-private-ltd-6b80495a

## Summary

### Background

The case involves an application filed by Narender Steel & Alloys (Operational Creditor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Jai Mata Engineering Ltd. (Corporate Debtor) for an alleged default of Rs. 1,16,78,018.48. The Operational Creditor supplied steel products to the Corporate Debtor based on purchase orders. A cheque issued by the Corporate Debtor for the outstanding amount was dishonored. The Corporate Debtor subsequently claimed the cheque was not issued by them and was allegedly stolen. The Operational Creditor then sent a legal notice demanding the outstanding amount with interest.

## Facts

Narender Steel & Alloys (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Jai Mata Engineering Ltd. (Corporate Debtor) for an alleged default of Rs. 1,16,78,018.48. The Operational Creditor supplied steel products to the Corporate Debtor based on purchase orders. The Corporate Debtor issued a cheque dated 31.07.2022, which was subsequently dishonored with the reason 'Exceeds Arrangement'. The Corporate Debtor then claimed the cheque was not issued by them and was allegedly stolen. The Operational Creditor sent a legal notice under section 8 of IBC Code, demanding the outstanding amount with 24% interest. The Corporate Debtor replied, alleging

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## Issues and analysis

### Issue 1: Whether a pre-existing dispute exists between the …

**Ratio:** The Adjudicating Authority must reject the application under Section 9(5)(ii)(d) of the

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**Reasoning:** The court found that the Corporate Debtor had raised concerns about the quality of goods

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**Interpretation:** Section 9(5)(ii)(d) of the IBC mandates the rejection of an application if a

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**Application:** The court applied the ratio to the facts by noting the Corporate Debtor's

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## Parties

- **Judges:** BACHU VENKAT…; RAHUL BHA…
- **Appellants:** Narender Steel…
- **Respondents:** Jai Mata Engineeri…
- **Advocates:** Piyush Ka…; Rohit T…; +2 more

## Timeline

- **2022-07-31 — Cheque I…**: Corporate Debtor issued cheque no.…
- **2022-09-08 — Application…**: Narender Steel & Alloys filed an…

## 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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