Agarwal Foundries Private Limited Vs POSCO E&C India Private Limited (NCLT Chandigarh)
In the case of Agarwal Foundries Private Limited vs. POSCO E&C India Private Limited, filed before the National Company Law Tribunal (NCLT) Chandigarh, several critical legal issues were deliberated concerning the applicability of the Insolvency and Bankruptcy Code, 2016 (IBC), particularly under Section 9, and the interpretation of operational debt and guarantor liability. Here’s a detailed summary of the case and its outcome:
Background and Petitioner’s Claims
Agarwal Foundries Private Limited (hereafter referred to as the Petitioner) filed a petition under Section 9 of the IBC against POSCO E&C India Private Limited (hereafter referred to as the Respondent), alleging default on payment obligations related to goods supplied to a third party, Empathy Infra & Engineering Pvt. Ltd. The Petitioner asserted that the Respondent had agreed to guarantee the payment by Empathy Infra & Engineering Pvt. Ltd. for the goods supplied by the Petitioner.
Key contentions by the Petitioner included:
- Supply of Goods and Guarantor Agreement: The Petitioner supplied TMT bars to Empathy Infra & Engineering Pvt. Ltd. for a project in Pune, Maharashtra, with the understanding that the Respondent would guarantee payment if Empathy failed to pay.
- Email Correspondence: The Petitioner provided email evidence suggesting that the Respondent had acknowledged its liability to pay if Empathy defaulted on the dues.
- Legal Notices: The Petitioner had issued demand notices under Section 8 of the IBC to both Empathy and the Respondent, alleging non-payment.
Respondent’s Defense
