# In the matter of KUGD Services Private limited (IB) 582(ND)-2020

> NCLT judgment dated 2022-10-13. Citation: TCN-2022-NCLT-00755. The case involves an application filed under Section 9 of the Insolvency & Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 13 Oct 2022
- **Citation:** TCN-2022-NCLT-00755
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/kugd-services-private-limited-ib-582nd-2020-ad0c334c

## Summary

### Background

The case involves an application filed under Section 9 of the Insolvency & Bankruptcy Code, 2016, by an Operational Creditor, Sparta Global Projects Pvt. Ltd., seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, KUGD Services Private Limited, due to its inability to pay its operational debt. The Operational Creditor provided manpower supply services to the Corporate Debtor based on a service agreement dated 24.11.2016. The agreement stipulated that payments were to be made within 30 days of the invoice date, with an 18% per annum interest on delayed payments.

## Facts

Sparta Global Projects Pvt. Ltd. (Operational Creditor) provided manpower supply services to KUGD Services Private Limited (Corporate Debtor) based on a service agreement dated 24.11.2016. The agreement stipulated payment within 30 days of the invoice date, with an 18% per annum interest on delayed payments. The Operational Creditor raised 13 invoices between January 2017 and January 2018, totaling Rs. 96,78,791/-. The Corporate Debtor defaulted on payments from May 2017. As of the date of the application, the Corporate Debtor had made part payments of Rs. 75,61,704/-, leaving a balance of Rs. 21,17,087/- along with accrued interest of Rs. 7,02,894/- (till 31.07.2019) unpaid. The Operational Debt fell due on various dates in 2017 and 2018. A Demand Notice dated

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational …

**Ratio:** The application must be filed within three years from the date of default, as per the

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**Reasoning:** The Tribunal observed that the date of default was 11.02.2018, and the application was

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**Interpretation:** The Limitation Act prescribes a time limit for filing legal proceedings. In the

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**Application:** Since the application was filed on 19.02.2020, which is within three years from

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## Parties

- **Judges:** P.S.N. P…; RAHUL BHA…
- **Respondents:** KUGD Services…

## Timeline

- **2016-11-24 — Service Agr…**: Service agreement executed between Sparta Global Projects Pvt. Ltd. and KUGD Services…
- **2017-01-01 — Service P…**: Operational Creditor provided services…

## 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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