# In the matter of Jayprakash Vyas Vs. Prabhat Steel Traders Pvt. Ltd & Ors. Company Appeal (AT) (Insolvency) No. 1238-2019

> NCLAT judgment dated 2020-07-24. Citation: TCN-2020-NCLAT-00190. The appeal arises from an order dated 26th September 2019, passed by the Adjudicating…

- **Court:** NCLAT
- **Order date:** 24 Jul 2020
- **Citation:** TCN-2020-NCLAT-00190
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/jayprakash-vyas-vs-prabhat-steel-traders-pvt-ltd-ors-company-appeal-1872b456

## Summary

### Background

The appeal arises from an order dated 26th September 2019, passed by the Adjudicating Authority/National Company Law Tribunal, Mumbai Bench, Mumbai, in Company Petition No. 343/I&BC/NCLT/MB/MAH/2019. The Adjudicating Authority admitted an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (I&B Code). The Operational Creditor, Prabhat Steel Traders Pvt. Ltd., filed an application under Section 9 of the I&B Code for initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, Shree Sai Industries India Private Limited, for a total debt of Rs 5,97,09,566/-, including a principal amount of Rs 2,05,28,636.00 and interest at 21% p.a. until 30th November 2018, amounting to Rs 3,91,80,930.00/-. A demand notice was

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## Facts

The Operational Creditor, Prabhat Steel Traders Pvt. Ltd., filed an application under Section 9 of the I&B Code to initiate CIRP against the Corporate Debtor, Shree Sai Industries India Private Limited, for a total debt of Rs 5,97,09,566/-. This amount included a principal of Rs 2,05,28,636.00 and interest at 21% p.a. until 30th November 2018, amounting to Rs 3,91,80,930.00/-. The demand notice was served on 09th June 2018. The Corporate Debtor failed to repay the amount. The tax invoice was dated 13th December 2011, with interest at 21% chargeable for delayed payments beyond 60 days. The Respondents/Applicant filed a balance confirmation letter dated 01st April 2017, showing the Corporate Debtor acknowledged a balance of Rs 2,05,28,636.05 as of 01st April 2017.

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in admitting the application under Section 9 of the …

**Ratio:** The Limitation Act applies to applications filed under Sections 7 and 9 of the I&B

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**Reasoning:** The Adjudicating Authority failed to consider the statutory requirement of Section

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**Interpretation:** The Supreme Court has held that the expression 'debt due' in the definition

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**Application:** In this case, the default occurred on 13th December 2011, and the application

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## Parties

- **Judges:** Venugop…; V. P. S…; +1 more
- **Appellants:** Jayprakas…
- **Respondents:** Shree Sai…; Prabhat Steel…

## Timeline

- **2011-12-13 — Date of Tax…**: Tax invoice issued for…
- **2012-01-12 — Date of D…**: First date of default…

## 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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