# In the matter of John Energy Limited

> NCLT judgment dated 2024-02-09. Citation: TCN-2024-NCLT-02655. Petroserv Corporation FZC filed an application under Section 9 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 9 Feb 2024
- **Citation:** TCN-2024-NCLT-02655
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/john-energy-limited-0a6dac05

## Summary

### Background

Petroserv Corporation FZC filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against John Energy Limited, seeking to initiate Corporate Insolvency Resolution Process (CIRP) due to unpaid operational debt amounting to USD 3,648,407.00 (equivalent to Rs.26,40,22,080.32). The applicant, Petroserv, claimed to have provided transportation and custom clearance services for John Energy's oil rigs, with service contracts executed in 2017. Petroserv issued invoices for these services, but John Energy allegedly failed to make payments despite accepting delivery. The application was filed on 2021-03-22.

## Facts

Petroserv Corporation FZC, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against John Energy Limited, a corporate debtor, for defaulting on an operational debt of USD 3,648,407.00 (Rs.26,40,22,080.32). Petroserv provided transportation and custom clearance services to John Energy for oil rigs based on service contracts executed in 2017. Petroserv issued invoices for these services, but John Energy failed to pay. John Energy disputed the debt, alleging poor service quality, breach of contract by Petroserv, retention of materials in Algeria, and questioned the validity of documents like appreciation letters and balance confirmations. John Energy also claimed a counterclaim for losses incurred due to Petroserv's

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## Issues and analysis

### Issue 1: Whether the application filed by Petroserv Corporation FZC under Section 9 of the Insolvency and …

**Ratio:** The existence of a genuine dispute regarding the debt precludes the initiation of CIRP

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**Reasoning:** The court found that John Energy had raised several disputes regarding the quality of

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**Interpretation:** Section 9 of the IBC requires that there be no existing dispute regarding the

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**Application:** In this case, John Energy's disputes regarding the quality of services, breach

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## Parties

- **Judges:** SHAMMI…; SAMEER…
- **Appellants:** Petroserv…
- **Respondents:** John Energy…; John Ener…
- **Advocates:** Percy K…; Raju Ko…; +3 more

## Timeline

- **2016-01-01 — Enactment of Insolvency and Bankruptcy Code,…**: The Insolvency and Bankruptcy Code, 2016 (IBC) was enacted, providing a framework for the…
- **2017-01-01 — Execution of Service…**: Petroserv Corporation FZC and John Energy Limited entered into service contracts for…

## 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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