# In the matter of Sadbhav Infrastructure Project Limited CP(IB)-79-AHM-2022

> NCLT judgment dated 2023-05-19. Citation: TCN-2023-NCLT-03251. The case originates from an application filed under Section 9 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 19 May 2023
- **Citation:** TCN-2023-NCLT-03251
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sadbhav-infrastructure-project-limited-cpib-79-ahm-2022-1678dc48

## Summary

### Background

The case originates from an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) by Mantra Corporation, an operational creditor, against Sadbhav Infrastructure Project Limited, the corporate debtor. The operational creditor claimed a default amount of Rs 1,35,68,193/-, comprising a principal amount of Rs 95,66,243/- and interest of Rs 40,01,949/-, arising from work orders issued to the operational creditor for road construction. The corporate debtor contested the application, asserting pre-existing disputes regarding the quality of work and the inclusion of interest in the operational debt.

## Facts

Mantra Corporation, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Sadbhav Infrastructure Project Limited, the corporate debtor, for a default amount of Rs 1,35,68,193/-. This amount included a principal of Rs 95,66,243/- and interest of Rs 40,01,949/-. The debt arose from work orders issued to Mantra Corporation for road construction around Ahmedabad. Sadbhav Infrastructure Project Limited argued that there were pre-existing disputes regarding the quality of the work performed by Mantra Corporation. They cited email communications and letters where they requested Mantra Corporation to rectify defects in the work. The corporate debtor also argued that the interest amount could not be included in the

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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:** An application under Section 9 of the IBC is not maintainable if there is a pre-existing

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**Reasoning:** The Adjudicating Authority reviewed the email communications and letters exchanged

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**Interpretation:** The presence of a pre-existing dispute, as evidenced by communications between

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**Application:** In this case, the corporate debtor's communications requesting rectification of

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## Parties

- **Judges:** Sh. Ashok Kumar…; KAUSHALENDRA…
- **Appellants:** Mantra Corporation…
- **Respondents:** Sadbhav Infrastruc…; Sadbhav Infrastruc…

## Timeline

- **2019-10-07 — Work Order…**: Corporate debtor issued work order no.…
- **2019-11-20 — Work Order…**: Corporate debtor issued work order no.…

## 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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