# In the matter of Comet Performance Chemicals Private Limited vs. Aarvee Denims and Exports Limited

> NCLAT judgment dated 2025-01-13. Citation: TCN-2025-NCLAT-00267. This case involves an appeal against an order passed by the Adjudicating Authority (National…

- **Court:** NCLAT
- **Order date:** 13 Jan 2025
- **Citation:** TCN-2025-NCLAT-00267
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/comet-performance-chemicals-private-limited-vs-aarvee-denims-and-exports-limited-193a352e

## Summary

### Background

This case involves an appeal against an order passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad) which dismissed a Section 9 petition filed under the Insolvency and Bankruptcy Code (IBC). The appellant, Comet Performance Chemicals Private Limited, claimed that the corporate debtor, Aarvee Denims and Exports Limited, defaulted on payments for supplied goods. The NCLT dismissed the petition on the grounds that the debt claimed was below the threshold limit and the interest amount was disputed. The appellant argues that the NCLT erred in not considering the interest amount on delayed payments, which was clearly mentioned in the invoices. The respondent contends that the purchase orders did not stipulate any provision for interest on delayed

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## Facts

Comet Performance Chemicals Private Limited (Appellant) supplied goods, including chemicals, to Aarvee Denims and Exports Limited (Respondent/Corporate Debtor) for its textile business starting around 2018. The Appellant raised invoices from 2019 to 2021, which the Corporate Debtor accepted. The invoices contained a clause for interest at 24% per annum on delayed payments. The Corporate Debtor made some payments but defaulted on others. The Appellant filed a commercial civil suit in Ahmedabad in May 2023 for recovery of the dues. As of July 17, 2023, the Corporate Debtor owed Rs 1,36,30,679, including principal and interest. The Appellant issued a demand notice in August 2023. The Corporate Debtor replied, failing to justify the default. The Appellant filed a Section 9

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## Issues and analysis

### Issue 1: Whether the debt claimed by the Appellant meets the threshold limit for initiating Corporate …

**Ratio:** Section 4 of the IBC specifies the minimum threshold for initiating CIRP. Section 5(21)

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**Reasoning:** The court found that without the disputed interest, the outstanding principal amount was

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**Interpretation:** The court interpreted Section 4 and Section 5(21) to mean that the debt must

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**Application:** The court applied the ratio to the facts by excluding the disputed interest

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## Parties

- **Judges:** Ashok Bh…; Barun M…; +1 more
- **Appellants:** Comet Performance…
- **Respondents:** Aarvee Denims and…
- **Advocates:** Arjun S…; Aalay…; +4 more

## Timeline

- **2018-01-01 — Appellant approached…**: Appellant approached Respondent for…
- **2019-01-01 — Invoices…**: Appellant raised…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(21) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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