# In the matter of Prayag Polytech Private Limited CP No. (IB)- 246-9-JPR-2019

> NCLT judgment dated 2023-03-29. Citation: TCN-2023-NCLT-04008. M/s Khatu Shree Chem, an operational creditor, filed an application under Section 9 of the…

- **Court:** NCLT
- **Order date:** 29 Mar 2023
- **Citation:** TCN-2023-NCLT-04008
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/prayag-polytech-private-limited-cp-no-ib-246-9-jpr-2019-1c5fcc27

## Summary

### Background

M/s Khatu Shree Chem, 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 Prayag Polytech Private Limited, the corporate debtor. The application was based on unpaid invoices for pigment red 53:1 material supplied by the operational creditor to the corporate debtor. The corporate debtor raised a dispute regarding the quality of the supplied goods, claiming they were defective.

## Facts

M/s Khatu Shree Chem (Operational Creditor) supplied pigment red 53:1 material to Prayag Polytech Private Limited (Corporate Debtor). The Corporate Debtor approached the Applicant for the purchase of the goods. The Applicant issued invoices and challans from 2018-09-19 to 2018-12-10. The Operational Creditor issued a Demand Notice dated 2019-09-03 for Rs. 27,95,184/-. The total amount of debt claimed was Rs. 31,32,103/-, including principal and interest. The Corporate Debtor claimed that the pigments supplied were defective due to color variation, heat stability, and poor FPV. The Corporate Debtor raised a dispute regarding the quality of goods supplied by the Applicant in emails dated 2019-08-08 and 2019-09-19. The date of default was 2018-11-01.

## Issues and analysis

### Issue 1: Whether a pre-existing dispute existed between the operational creditor and the corporate debtor …

**Ratio:** Section 9(5)(ii)(d) of the IBC mandates the rejection of an application for initiation of

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**Reasoning:** The court relied on the Supreme Court's judgments in Mobilox Innovations Private Limited

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**Interpretation:** The court interpreted Section 9 of the IBC in light of the Supreme Court's

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**Application:** In this case, the court found that the e-mail correspondence between the

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## Parties

- **Judges:** Deep Chandr…; Prasanta Kumar…
- **Appellants:** M/s Khatu Shree…
- **Respondents:** Prayag Polytech…

## Timeline

- **2018-09-19 — Invoices and Challans…**: Applicant issued various invoices and…
- **2018-12-10 — Invoices and Challans…**: Applicant issued various invoices and…

## 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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