# In the matter of Jai Narain Fabtech Pvt. Ltd. vs. Cheema Spintex Ltd.

> NCLAT judgment dated 2025-04-04. Citation: TCN-2025-NCLAT-00123. The appeal challenges an order dated 20.09.2023, where an application under Section 9 of the…

- **Court:** NCLAT
- **Order date:** 4 Apr 2025
- **Citation:** TCN-2025-NCLAT-00123
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/jai-narain-fabtech-pvt-ltd-vs-cheema-spintex-ltd-097e5286

## Summary

### Background

The appeal challenges an order dated 20.09.2023, where an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, was dismissed. The application, filed by the Appellant/Operational Creditor, sought resolution for Rs. 1,41,57,817/-, including 18% interest per annum. The dismissal was based on the application being beyond the limitation period and below the threshold of Rs. 1 Cr., excluding interest. The appellant supplied polyester staple fiber to the Corporate Debtor (CD) against invoices from 20.01.2018 to 07.02.2018. Payments were made by the Respondent/CD over time, with the last payment on 05.07.2018. The application under Section 9 was filed electronically on 12.10.2021 and physically on 18.10.2021, but defects were not rectified due to a CIRP

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## Facts

Jai Narain Fabtech Pvt. Ltd. (Appellant) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Cheema Spintex Ltd. (Respondent/Corporate Debtor) for a resolution of debt amounting to Rs. 1,41,57,817/-, which included interest at 18% p.a. The application was dismissed by the NCLT on 20.09.2023 due to being beyond the limitation period and below the threshold of Rs. 1 Cr. The Appellant supplied polyester staple fiber to the CD between 20.01.2018 and 07.02.2018. The last payment from the CD was received on 05.07.2018. The application was filed electronically on 12.10.2021 and physically on 18.10.2021. A CIRP order dated 06.10.2021, which initially created an obstacle, was withdrawn on 30.05.2022. The IRP confirmed the admission of the

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## Issues and analysis

### Issue 1: Whether the Appellant crossed the threshold of Rs. 1 Cr. for maintaining the application under …

**Ratio:** The threshold for initiating CIRP under Section 9 of the IBC is Rs. 1 Cr. The amount of

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**Reasoning:** The Tribunal considered only the principal amount of Rs. 74,97,097/- admitted by the IRP,

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**Interpretation:** Section 4 of the IBC specifies the minimum amount of default for initiating

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**Application:** In this case, the principal amount was less than Rs. 1 Cr. The Appellant

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## Parties

- **Judges:** Rakesh Kuma…; Naresh Sa…; +1 more
- **Appellants:** Jai Narain…
- **Respondents:** Cheema Spintex…

## Timeline

- **2018-01-20 — Invoice Issuance Start…**: Invoices issued from 20.01.2018 to…
- **2018-02-07 — Invoice Issuance End…**: Invoices issued from 20.01.2018 to…

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