# In the matter of K. Kishan Vs. Vijay Nirman Company Pvt. Ltd. Civil Appeal Nos. 21824 & 21825-2017

> SC judgment dated 2018-08-14. Citation: TCN-2018-SC-00028. M/s Vijay Nirman Company Pvt. Ltd. (Respondent) entered into a sub-Contract Agreement with M/s…

- **Court:** SC
- **Order date:** 14 Aug 2018
- **Citation:** TCN-2018-SC-00028
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/k-kishan-vs-vijay-nirman-company-pvt-ltd-civil-appeal-nos-21824-21825-2017-82ac87ed

## Summary

### Background

M/s Vijay Nirman Company Pvt. Ltd. (Respondent) entered into a sub-Contract Agreement with M/s Ksheerabad Constructions Pvt. Ltd. (KCPL) on 2008-02-01. Disputes arose, leading to an Arbitral Tribunal award on 2017-01-21 favoring the Respondent. The Respondent sent a notice to KCPL under Section 8 of the Insolvency and Bankruptcy Code (IBC) on 2017-02-06. KCPL disputed the invoice, citing the arbitration proceeding. KCPL filed a Section 34 petition under the Arbitration and Conciliation Act, 1996, challenging the award. A Section 9 petition under the IBC was filed on 2017-07-14. The NCLT admitted the Section 9 petition, and the Appellate Tribunal upheld this decision, stating Section 238 of the IBC overrides the Arbitration Act.

## Facts

M/s Vijay Nirman Company Pvt. Ltd. (VNCPL) entered into a sub-contract agreement with M/s Ksheerabad Constructions Pvt. Ltd. (KCPL) on 2008-02-01. Disputes arose, leading to arbitration. An arbitral award was delivered on 2017-01-21, favoring VNCPL for Rs. 1,71,98,302/-. VNCPL sent a notice to KCPL on 2017-02-06 under Section 8 of the IBC for Rs. 1,79,00,166/-. KCPL disputed the invoice on 2017-02-16, citing the ongoing arbitration. KCPL filed a Section 34 petition on 2017-04-20 challenging the award. VNCPL filed a Section 9 petition under the IBC on 2017-07-14. The NCLT admitted the Section 9 petition on 2017-08-29, and the Appellate Tribunal upheld this decision. KCPL had also filed counterclaims in the arbitration, which were rejected. The relevance of the facts

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## Issues and analysis

### Issue 1: Whether the Insolvency and Bankruptcy Code, 2016 can be invoked in respect of an operational debt …

**Ratio:** The existence of a pre-existing dispute, evidenced by the filing of a Section 34 petition

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**Reasoning:** The Court reasoned that the IBC should not be used as a debt enforcement mechanism,

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**Interpretation:** The Court interpreted Section 9(5)(ii)(d) of the IBC to mean that if a notice

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**Application:** In this case, KCPL filed a Section 34 petition challenging the arbitral award

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## Parties

- **Judges:** ROHINTON FALI…; Indu Mal…
- **Appellants:** K. KI…
- **Respondents:** M/s K…; M/s. Vijay Nirman…
- **Other parties:** Over Tu…

## Timeline

- **2008-02-01 — Sub-Contract A…**: M/s Vijay Nirman Company Pvt. Ltd. (Respondent) entered into a sub-Contract Agreement…
- **2017-01-21 — Arbitral…**: Arbitral Tribunal delivered an award…

## 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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