# In the matter of Pratap Fiber Communications Private Limited CP No. (IB)- 39-9-JPR-2021

> NCLT judgment dated 2023-01-13. Citation: TCN-2023-NCLT-05054. M/s Sterling Associates, an operational creditor, filed an application under Section 9 of the…

- **Court:** NCLT
- **Order date:** 13 Jan 2023
- **Citation:** TCN-2023-NCLT-05054
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/pratap-fiber-communications-private-limited-cp-no-ib-39-9-jpr-2021-96dcc0fc

## Summary

### Background

M/s Sterling Associates, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Pratap Fiber Communications Private Limited, the corporate debtor, due to non-payment of operational dues amounting to Rs. 99,82,304 along with interest. The corporate debtor argued that the outstanding principal amount was below the minimum threshold of Rs. 1 crore as stipulated under Section 4 of the IBC and that there was a pre-existing dispute regarding the quality of work. The applicant claimed that the unpaid operational debt, including interest, exceeded the threshold limit and that there was no pre-existing dispute.

## Facts

M/s Sterling Associates (Operational Creditor) filed an application to initiate CIRP against M/s Pratap Fiber Communications Private Limited (Corporate Debtor) for non-payment of operational dues. The Corporate Debtor was engaged in laying optical fiber transmission lines. The alleged default amounted to Rs. 99,82,304/- plus interest. The Corporate Debtor argued that the principal amount was below the Rs. 1 crore threshold and that there was a pre-existing dispute regarding the quality of work. The Corporate Debtor had sent emails to the Operational Creditor complaining about the pathetic progress of the work, informing them of a miserable failure in the progress, and stating that the duct was being damaged. The Operational Creditor claimed that the debt, including

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## Issues and analysis

### Issue 1: Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 is maintainable …

**Ratio:** Section 8(2)(a) of the IBC states that the existence of a dispute, or record of the

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**Reasoning:** The Adjudicating Authority considered the email correspondence between the parties, which

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**Interpretation:** The term 'dispute' under the IBC includes a suit or arbitration proceedings

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**Application:** In this case, the email correspondence demonstrated a pre-existing dispute

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## Parties

- **Judges:** Deep Chandr…; Prasanta Kumar…
- **Appellants:** M/s Sterling…
- **Respondents:** M/s Pratap Fiber…

## Timeline

- **2018-10-05 — Incorporation of…**: M/s Pratap Fiber Communications Private Limited incorporated under the Companies Act,…
- **2019-09-22 — Debt Fel…**: The debt has fallen due…

## 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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