# In the matter of Good Luck Traders Vs. Valley Iron & Steel Co. Ltd. & Anr. CA(AT)(Insolvency) No. 81-2019

> NCLAT judgment dated 2019-07-17. Citation: TCN-2019-NCLAT-00446. The Appellant, M/s. Good Luck Traders, filed an application under Section 9 of the Insolvency…

- **Court:** NCLAT
- **Order date:** 17 Jul 2019
- **Citation:** TCN-2019-NCLAT-00446
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/good-luck-traders-vs-valley-iron-steel-co-ltd-anr-ca-bec37b1c

## Summary

### Background

The Appellant, M/s. Good Luck Traders, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, for initiating a corporate insolvency resolution process against Valley Iron & Steel Co. Ltd. (Corporate Debtor). The Adjudicating Authority (National Company Law Tribunal), New Delhi Bench, rejected the application on December 17, 2018, citing that the claim was barred by limitation. The Adjudicating Authority noted that a portion of the debt had already been paid and that the applicant failed to explain the delay in filing the claim, which pertained to the year 2012.

## Facts

M/s. Good Luck Traders (Appellant) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate a corporate insolvency resolution process against Valley Iron & Steel Co. Ltd. (Corporate Debtor). The Adjudicating Authority rejected the application because it believed the claim was barred by limitation. The Adjudicating Authority noted that Rs. 39,46,440.26 had already been paid by the Respondent after a demand notice was issued under Section 8. The original unpaid amount was Rs. 54,46,440.26. Rs. 15,00,000/- was paid by the Respondent through 3 demand drafts in February 2018. The Appellant admitted that out of the total claim of Rs. 1,06,39,290.26/-, Rs. 39464440.26/- was the principal amount remaining to be paid, and Rs.

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority's decision to reject the application based on limitation was …

**Ratio:** The scheme of the Code is to ensure that when a default takes place, in the sense that a

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**Reasoning:** The Tribunal found that the Adjudicating Authority's observations were contradictory. The

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**Interpretation:** The interpretation of 'default' under Section 3(12) is broad, encompassing

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**Application:** The Tribunal applied the ratio by considering the payments made by the

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## Parties

- **Judges:** S.J. Mukhop…; KanthiNar…
- **Appellants:** M/s. Good Luck…
- **Respondents:** Valley Iron &…; M/s. Valley Iron…
- **Advocates:** Anshuj Dh…; Shubhangda…; +2 more

## Timeline

- **2018-12-17 — Order by Adjudicating…**: The Adjudicating Authority (National Company Law Tribunal), New Delhi Bench, rejected the…
- **2019-07-19 — Appeal F…**: M/s. Good Luck Traders filed an appeal against…

## 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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