# In the matter of Rajratan Babulal Agarwal Vs. Solartex India Pvt. Ltd & Ors. Civil Appeal 2199 of 2021

> SC judgment dated 2022-10-13. Citation: TCN-2022-SC-00011. The case involves a civil appeal against an order by the National Company Law Appellate Tribunal…

- **Court:** SC
- **Order date:** 13 Oct 2022
- **Citation:** TCN-2022-SC-00011
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/rajratan-babulal-agarwal-vs-solartex-india-pvt-ltd-ors-civil-appeal-2199-of-2021-0265b95e

## Summary

### Background

The case involves a civil appeal against an order by the National Company Law Appellate Tribunal (NCLAT) which dismissed an appeal filed by the appellant. The appellant challenged an order passed by the National Company Law Tribunal (NCLT) that admitted an application filed by the first respondent under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC). The dispute arises from a purchase order for the supply of coal, where the appellant (corporate debtor) alleges that the quality of coal supplied by the respondent (operational creditor) was substandard, leading to damages. The NCLT admitted the application under Section 9, but the NCLAT dismissed the appellant's appeal, leading to the current appeal before the Supreme Court.

## Facts

Rajratan Babulal Agarwal (appellant) filed an appeal against Solortex India Pvt. Ltd. & Ors. (respondents) regarding a dispute over the quality of coal supplied. The appellant is an ex-director of the second respondent. In 2016, two High Seas Sale Agreements were made. One was between respondent No. 2 and Rawalwasia Textile Industries Private Limited. The other was between the same seller and STDPL, a sister concern of the second respondent. The purchase order for STDPL was dated 2016-10-11, and for the second respondent, it was dated 2016-10-27. The purchase order specified a Gross Calorific Value of 5400 and a moisture content of less than 40% +/- 2%. The second respondent was supplied 412 Metric Tonnes out of 500 Metric Tonnes. The supply occurred between

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## Issues and analysis

### Issue 1: Whether the NCLAT erred in finding that there was …

**Ratio:** The existence of a 'dispute' under the IBC is determined by whether there is a plausible

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**Reasoning:** The court reasoned that the NCLAT overlooked the communications between the parties,

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**Interpretation:** The court interpreted the term 'dispute' under the IBC to mean a genuine

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**Application:** The court applied the ratio to the facts by finding that the emails exchanged

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## Parties

- **Judges:** K.M. Jo…; Hrishikes…
- **Appellants:** Rajratan Babulal…
- **Respondents:** SOLARTEX INDIA…
- **Advocates:** Kavin G…; Manoj H…; +1 more

## Timeline

- **2016-10-11 — Purchase Order…**: Purchase order for STDPL (sister concern…
- **2016-10-27 — Purchase Order for…**: Purchase order for the second respondent…

## 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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