# In the matter of Kiran Udyog Private Limited IB- 639-(ND)-2022

> NCLT judgment dated 2023-03-07. Citation: TCN-2023-NCLT-04297. M/s A.ES Engineers Private Limited, the Operational Creditor, filed an application under…

- **Court:** NCLT
- **Order date:** 7 Mar 2023
- **Citation:** TCN-2023-NCLT-04297
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/kiran-udyog-private-limited-ib-639-nd-2022-874c78b1

## Summary

### Background

M/s A.ES Engineers Private Limited, the Operational Creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against M/s Kiran Udyog Private Limited, the Corporate Debtor, for a default of Rs. 3,53,49,071.9/-. The debt comprised a principal amount of Rs. 2,81,49,908/- and interest of Rs. 71,99,163.9/- as of July 20, 2022. The Operational Creditor claimed the debt was due under 227 invoices for the supply of cast iron products, governed by a Master Service Agreement dated March 28, 2019, and a Facility Agreement dated August 7, 2020. The Corporate Debtor contested the application, citing a pre-existing dispute pending before the Delhi High Court in Arbitration Petition No. 26 of 2022, and arbitration proceedings before the Micro &

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## Facts

M/s A.ES Engineers Private Limited (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against M/s Kiran Udyog Private Limited (Corporate Debtor) for a default of Rs. 3,53,49,071.9/-, comprising a principal amount of Rs. 2,81,49,908/- and interest of Rs. 71,99,163.9/- as of July 20, 2022. The debt arose from 227 invoices for the supply of cast iron products. The arrangement was governed by a Master Service Agreement dated March 28, 2019, and a Facility Agreement dated August 7, 2020. The Corporate Debtor argued that the application was frivolous due to a pre-existing dispute pending before the Delhi High Court in Arbitration Petition No. 26 of 2022, titled "M/s A.ES Engineers Private Limited v. M/s Ugro Capital

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## Issues and analysis

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

**Ratio:** The existence of a pre-existing dispute, as defined under Section 5(6) of the IBC, bars

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**Reasoning:** The NCLT reasoned that the pendency of the Arbitration Petition before the Delhi High

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**Interpretation:** The term 'dispute' under Section 5(6) of the IBC is interpreted broadly to

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**Application:** In this case, the Arbitration Petition pending before the Delhi High Court was

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## Parties

- **Judges:** SHRI. BACHU…; SHRI. RAHUL…
- **Appellants:** M/s A.ES Engineers…
- **Respondents:** M/s Kiran Udyog…

## Timeline

- **2019-03-28 — Master Service…**: Master Service Agreement between…
- **2020-08-07 — Facility Agree…**: Facility Agreement between…

## 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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