# In the matter of The Fertilizers and Chemicals Travancore Limited

> NCLT judgment dated 2023-08-09. Citation: TCN-2023-NCLT-02119. M/s. Prasad and Company (Project Works) Private Limited, the Operational Creditor (OC), filed…

- **Court:** NCLT
- **Order date:** 9 Aug 2023
- **Citation:** TCN-2023-NCLT-02119
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/the-fertilizers-and-chemicals-travancore-limited-1c70b15b

## Summary

### Background

M/s. Prasad and Company (Project Works) Private Limited, the Operational Creditor (OC), filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC), read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, for initiating the Corporate Insolvency Resolution Process (CIRP) against The Fertilizers And Chemicals Travancore Ltd.(Fact Engineering and Design Organisation)(FEDO), the Corporate Debtor (CD). The OC claimed a default in repayment of an operational debt amounting to ₹4,35,34,381/-. The OC was awarded a contract by the CD for construction work at NIT, Nagaland. Disputes arose regarding the payment of bills, with the CD raising a counter-claim for liquidated damages due to delays in project

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## Facts

M/s. Prasad and Company (Project Works) Private Limited (OC) filed an application under Section 9 of the IBC against The Fertilizers And Chemicals Travancore Ltd.(Fact Engineering and Design Organisation)(FEDO) (CD) for a default of ₹4,35,34,381/-. The OC was awarded a Letter of Intent (LOI) dated 2014-09-12 and a work order dated 2014-09-16 by the CD for construction of Academic Buildings and a Library Block at NIT, Nagaland, for Rs. 95,43,27,845.52/-. The OC raised RA Bills No. 24 and 25, dated 2019-02-28 and 2019-07-18 respectively, which were pending for payment. The OC issued a demand notice on 2021-07-14. The CD replied on 2021-07-28, stating that the bills were not disputed but raised a counter-claim for liquidated damages. The CD claimed that the OC failed to

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## Issues and analysis

### Issue 1: Whether there is a pre-existing …

**Ratio:** The existence of a pre-existing dispute, as defined under the IBC, bars the admission of

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**Reasoning:** The NCLT found that there were previous communications between the OC and CD as early as

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**Interpretation:** A 'dispute' under the IBC encompasses not only a denial of debt but also any

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**Application:** In this case, the NCLT applied the ratio to the facts and found that the CD had

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## Parties

- **Judges:** P. Moha…; Satya Ranjan…
- **Appellants:** M/s. Prasad and…
- **Respondents:** THE FERTILIZERS…

## Timeline

- **2014-09-12 — Letter of Inte…**: The petitioner was awarded with…
- **2014-09-16 — Work Ord…**: The petitioner was awarded with…

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