In Brief
S.S. Engineers filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 to initiate a Corporate Insolvency Resolution Process (CIRP) against Hindustan Petroleum Biofuels Limited (HBL), claiming Rs. 18+ crores in unpaid dues for boiler house enhancement work. HBL contested the claim, alleging breach of contract, poor workmanship, non-compliance with schedules, and quality failures, and contended that Rs. 1.49 crores was due from the appellant instead. The NCLT admitted the CIRP application despite finding pre-existing disputes. The Supreme Court held that an operational creditor can only trigger CIRP when the debt is undisputed and unpaid. Since genuine disputes existed (evidenced by contemporaneous correspondence, debit notes, and arbitration invocation), the CIRP application should have been rejected. The Court emphasised the IBC is not a debt collection forum and cannot be used against solvent companies to resolve disputed claims. The appeal was dismissed.
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