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

> NCLT judgment dated 2022-10-13. Citation: TCN-2022-NCLT-00759. The Operational Creditor (Sparta Global Projects Pvt. Ltd.) filed a petition under Section 9 of…

- **Court:** NCLT
- **Order date:** 13 Oct 2022
- **Citation:** TCN-2022-NCLT-00759
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/kugd-services-private-limited-ib-582nd-2020-e52c2650

## Summary

### Background

The Operational Creditor (Sparta Global Projects Pvt. Ltd.) filed a petition under Section 9 of the Insolvency & Bankruptcy Code, 2016, 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 Corporate Debtor had approached the Operational Creditor for manpower supply services, leading to a service agreement on 2016-11-24. The Operational Creditor provided services from January 2017 to January 2018, raising 13 invoices. The Corporate Debtor defaulted on payments from May 2017. A demand notice was issued on 2019-08-07 under Section 8 of the Code, but the Corporate Debtor did not respond or appear before the Tribunal.

## 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 2016-11-24. The agreement stipulated payment within 30 days of the invoice date, with an 18% per annum interest on delays. Sparta Global Projects raised 13 invoices between January 2017 and January 2018, totaling Rs. 96,78,791/-. KUGD Services defaulted on payments from May 2017. As of the date of the application, Rs. 21,17,087/- remained unpaid, along with accrued interest of Rs. 7,02,894/- (till 2019-07-31). A demand notice was issued on 2019-08-07 under Section 8 of the IBC, but KUGD Services did not respond. The date of default is 2018-02-11, and the application was filed on 2020-02-19. The

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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 2018-02-11, and the application was

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**Interpretation:** The Limitation Act prescribes a period within which legal proceedings must be

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**Application:** Since the application was filed on 2020-02-19, which is within three years from

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## Parties

- **Judges:** P.S.N. P…; RAHUL BHA…
- **Appellants:** Sparta Global…
- **Respondents:** KUGD Services…
- **Advocates:** Arjun Ag…; Rajiv Vi…; +1 more

## Timeline

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

## 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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