# In the matter of J.B. Tiwari Vs Boistadt India Limited & Ors. CA (AT) (Insolvency) 268-2018

> NCLAT judgment dated 2018-11-30. Citation: TCN-2018-NCLAT-00034. The case involves an appeal against an order dated 02.05.2018 passed by the National Company…

- **Court:** NCLAT
- **Order date:** 30 Nov 2018
- **Citation:** TCN-2018-NCLAT-00034
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/jb-tiwari-vs-boistadt-india-limited-ors-ca-64d98346

## Summary

### Background

The case involves an appeal against an order dated 02.05.2018 passed by the National Company Law Tribunal (NCLT), Mumbai Bench, admitting an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC). The appellant, the Managing Director of Sonachi Industries Limited (Corporate Debtor), contested the admission of the application filed by Biostadt India Limited (Operational Creditor). The appellant argued that the NCLT's order was ex-parte and violated principles of natural justice because the Corporate Debtor was not properly served with notice. The Corporate Debtor acknowledged an outstanding debt to the Operational Creditor but claimed the materials supplied were of substandard quality.

## Facts

Biostadt India Limited (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Sonachi Industries Limited (Corporate Debtor) before the NCLT, Mumbai Bench, seeking initiation of corporate insolvency resolution process (CIRP) due to unpaid operational debt. The NCLT admitted the application. The Corporate Debtor, through its Managing Director (Appellant), appealed the NCLT's decision, arguing that the order was ex-parte and violated principles of natural justice because the Corporate Debtor was not properly served with notice. The Corporate Debtor acknowledged an outstanding debt of Rs.1,14,41,776.61 but claimed the materials supplied by the Operational Creditor were of substandard quality. The Operational

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority's order was ex-parte and violated principles of natural justice …

**Ratio:** The principle of natural justice requires that parties be given adequate notice and

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**Reasoning:** The court found that the Corporate Debtor had received notice of the proceedings through

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**Interpretation:** The court interpreted the requirement of notice under the IBC to ensure that

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**Application:** In this case, the Corporate Debtor received notice from Veritas Legal,

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## Parties

- **Judges:** A.I.S. C…; Balvinder…
- **Appellants:** J.B. Ti…
- **Respondents:** Sonachi Industries…; Biostadt India…

## Timeline

- **2016-04-25 — Corporate Debtor seeks…**: Corporate Debtor sent an email to the Operational Creditors seeking additional time to…
- **2016-06-22 — Legal Notice by…**: Operational Creditor sent a legal notice to the Corporate Debtor regarding outstanding…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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