# In the matter of P and G Enterprises Pvt. Ltd.

> NCLT judgment dated 2024-05-07. Citation: TCN-2024-NCLT-01416. The case involves an application filed by Mr. Abdul Wajid PM, the Operational Creditor, under…

- **Court:** NCLT
- **Order date:** 7 May 2024
- **Citation:** TCN-2024-NCLT-01416
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/p-and-g-enterprises-pvt-ltd-24616da5

## Summary

### Background

The case involves an application filed by Mr. Abdul Wajid PM, the Operational Creditor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. P&G ENTERPRISES PVT LTD, the Corporate Debtor. The application pertains to an alleged default in clearing a debt of INR 1,57,61,249/-, which includes the principal amount, 'C' Form charges, and interest. The Corporate Debtor contested the application, citing pre-existing disputes regarding the quality of supplied leather materials and the applicability of the law of limitation to certain invoices. The Corporate Debtor also claimed that a portion of the debt had already been settled.

## Facts

Mr. Abdul Wajid PM, the Operational Creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. P&G ENTERPRISES PVT LTD, the Corporate Debtor, for a debt of INR 1,57,61,249/-. This amount includes a principal sum of INR 1,01,56,233/-, 'C' Form charges of INR 1,29,518.04/-, and interest of INR 53,92,853. The debt arose from the supply of finished leather materials and tanning job work. The Corporate Debtor claimed that the application did not fulfill the requirements for dispute adjudication under the IBC, that the amount did not qualify as 'Debt', and that the claim was barred by law. The Corporate Debtor also alleged that 15 invoices had already been paid and

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## Issues and analysis

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

**Ratio:** The existence of a pre-existing dispute is a valid ground for rejecting an application

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**Reasoning:** The court relied on email communications indicating that the end buyer rejected the goods

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**Interpretation:** A pre-existing dispute, in the context of Section 9 of the IBC, refers to a

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**Application:** In this case, the court found that the email communications from the end buyer

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## Parties

- **Judges:** SHRI. MAHENDRA…; SHRI. RAHUL…
- **Appellants:** ABDUL WAJ…
- **Respondents:** M/s. P&G ENTERPRIS…
- **Advocates:** Mahima D…; Sonali S…; +2 more

## Timeline

- **2023-01-18 — Application…**: Mr. Abdul Wajid filed an application to initiate Corporate Insolvency Resolution Process…
- **2024-05-07 — Order Da…**: The NCLT dismissed the application…

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