# In the matter of Osha Tools Pvt. Ltd.

> NCLT judgment dated 2024-03-01. Citation: TCN-2024-NCLT-02261. M/s Accurate Auto Products Pvt. Ltd, the applicant, filed a petition under Section 9 of the…

- **Court:** NCLT
- **Order date:** 1 Mar 2024
- **Citation:** TCN-2024-NCLT-02261
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/osha-tools-pvt-ltd-054913a9

## Summary

### Background

M/s Accurate Auto Products Pvt. Ltd, the applicant, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Osha Tools Pvt. Ltd, the respondent, for non-payment of operational debt. The applicant claimed that the respondent failed to pay Rs. 10,33,394, which included the principal amount of Rs. 6,50,726.77 and simple interest at 8% per annum, with the date of default being 03.05.2014. The respondent opposed the application, citing pre-existing disputes regarding the quality of goods supplied and part payments made.

## Facts

M/s Accurate Auto Products Pvt. Ltd. filed a petition under Section 9 of the IBC, 2016, against M/s Osha Tools Pvt. Ltd. for non-payment of operational debt. The debt arose from the supply of machinery in May 2014, with invoices totaling Rs. 8,18,286.02. The applicant claimed a total debt of Rs. 10,33,394, including principal and interest, with the date of default as 03.05.2014. The respondent made a part payment of Rs. 76,432.30 on 14.12.2015 and returned tools worth Rs. 6,50,726.77. The respondent contended that the goods supplied were of substandard quality, leading to a pre-existing dispute. The applicant issued a demand notice on 04.06.2018, which was replied to by the respondent. The applicant's ledger account was not audited or signed. The applicant company is

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## Issues and analysis

### Issue 1: Whether a dispute existed between the parties prior to the issuance of the demand notice under …

**Ratio:** The existence of a 'dispute' prior to the issuance of a demand notice under Section 8(1)

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**Reasoning:** The NCLT examined the letters and emails exchanged between the parties and found that the

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**Interpretation:** The term 'dispute' is interpreted broadly to include any disagreement or

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**Application:** In this case, the NCLT found that the respondent's claims regarding the quality

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## Parties

- **Judges:** Sh. Harnam Singh…; SH. L. N.…
- **Appellants:** M/s. Accurate…
- **Respondents:** M/s Osha Tools…
- **Advocates:** Sudhir Kuma…; Anand Chh…

## Timeline

- **2014-05-01 — Supply of Ma…**: Applicant supplied…
- **2014-05-03 — Date of D…**: Date of default as…

## 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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