# In the matter of Kerala State Electronics Development Corporation Limited

> NCLT judgment dated 2023-12-05. Citation: TCN-2023-NCLT-00444. Unifylabs Systems Private Limited, the Operational Creditor (OC), filed an application under…

- **Court:** NCLT
- **Order date:** 5 Dec 2023
- **Citation:** TCN-2023-NCLT-00444
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/kerala-state-electronics-development-corporation-limited-855ed787

## Summary

### Background

Unifylabs Systems Private Limited, the Operational Creditor (OC), filed an application under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Kerala State Electronics Development Corporation Limited, the Corporate Debtor (CD), for alleged default in repayment of an operational debt amounting to Rs. 54,78,44,324/-. The OC claimed that the CD was awarded a contract by Asansol Municipal Corporation (AMC) for the implementation of the Enterprise Municipal System EGIYE Project, and the CD subcontracted part of the project works to the OC. The OC alleged that the CD defaulted in making payments

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## Facts

Unifylabs Systems Private Limited (OC) filed an application under Section 9 of the IBC against Kerala State Electronics Development Corporation Limited (CD) for a default of Rs. 54,78,44,324/-. The OC claimed that the CD subcontracted work related to the Enterprise Municipal System EGIYE Project awarded by Asansol Municipal Corporation (AMC). The OC alleged that they completed the work but the CD defaulted on payments. The CD contested the application, claiming that the contracts were null and void due to unauthorized actions by their branch manager, Mr. Arpan Chakraborty. The CD also argued that there was a pre-existing dispute, as evidenced by criminal complaints against Mr. Chakraborty and objections raised prior to the demand notice. The CD also stated that the OC

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## Issues and analysis

### Issue 1: Whether there is a pre-existing dispute …

**Ratio:** The existence of a pre-existing dispute, as defined under the IBC, bars the admission of

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**Reasoning:** The Tribunal found that there were disputed questions regarding the authority of the

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**Interpretation:** A 'pre-existing dispute' under IBC means a dispute that exists before the

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**Application:** In this case, the Tribunal found that the CD had raised objections to the OC's

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## Parties

- **Judges:** TMT. (Retd.)…; Shri. Shyam Babu…
- **Appellants:** UNIFYLABS SYSTEMS…
- **Respondents:** KERALA STATE…

## Timeline

- **2016-01-01 — Enactment…**: The Insolvency and…
- **2017-08-02 — Contract Award…**: Asansol Municipal Corporation (AMC) awarded a contract to Kerala State Electronics…

## 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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