# In the matter of Preca Solutions India Private Limited

> NCLT judgment dated 2023-10-31. Citation: TCN-2023-NCLT-00944. Nagarjuna Steel Private Limited filed an application under Section 9 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 31 Oct 2023
- **Citation:** TCN-2023-NCLT-00944
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/preca-solutions-india-private-limited-2c81bf1c

## Summary

### Background

Nagarjuna Steel Private Limited filed an application under Section 9 of the Insolvency and Bankruptcy Code (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Preca Solutions India Private Limited, alleging default in payment for the supply of iron and steel. The petitioner claimed outstanding dues of Rs. 1,99,87,603/- for supplies made between December 2021 and March 2022. Preca Solutions contested the application, stating that the payment obligation rested with Nova Educational Society (NES) as per an agreement, and that there was a pre-existing dispute regarding the payment terms.

## Facts

Nagarjuna Steel Private Limited (the Petitioner) supplied iron and steel in the form of TMT Rebar to Preca Solutions India Private Limited (the Respondent) between December 2021 and March 2022. The Petitioner claimed that the Respondent failed to pay outstanding dues of Rs. 1,99,87,603/-, including principal, interest, and GST on interest. The Petitioner served a demand notice on the Respondent on 06.09.2022, which was delivered on 14.09.2022, but the Respondent did not reply. The Respondent contended that it had entered into agreements with Nova's Avenues and Infrastructure Private Limited, a group company of Nova Educational Society (NES), to construct buildings. NES informed the Respondent that the steel would be arranged through the Petitioner, with NES making part

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## Issues and analysis

### Issue 1: Whether the Respondent, who placed purchase orders with the Petitioner for the supply of goods at …

**Ratio:** The existence of a pre-existing dispute regarding the payment obligation disqualifies the

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**Reasoning:** The NCLT found that there was a pre-existing dispute regarding the payment obligation, as

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**Interpretation:** Section 9 of the IBC allows an operational creditor to initiate CIRP against a

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**Application:** In this case, the NCLT found that there was a pre-existing dispute regarding

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** Nagarjuna Steel…
- **Respondents:** Preca Solutions…

## Timeline

- **2021-12-01 — Supply of Iron…**: Petitioner supplied Iron & Steel to…
- **2022-09-06 — Demand N…**: Petitioner served a Demand…

## 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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