# In the matter of Krystal Integrated Services Pvt. Ltd. Vs. Indiaontime Express Pvt Ltd. CA(AT)Insolvency) No. 194-2019

> NCLAT judgment dated 2019-07-12. Citation: TCN-2019-NCLAT-00453. The case involves an appeal against an order dated January 23, 2019, passed by the National…

- **Court:** NCLAT
- **Order date:** 12 Jul 2019
- **Citation:** TCN-2019-NCLAT-00453
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/krystal-integrated-services-pvt-ltd-vs-indiaontime-express-pvt-ltd-ca-afb53faa

## Summary

### Background

The case involves an appeal against an order dated January 23, 2019, passed by the National Company Law Tribunal (NCLT), Bengaluru Bench, which rejected an application for initiating Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. The appellant, M/s Krystal Integrated Services Pvt. Ltd., had filed a petition for winding up of the respondent company, M/s Indiaontime Express Private Limited (Corporate Debtor), before the High Court of Karnataka, which was later transferred to NCLT. The NCLT rejected the application on the grounds that the operational debt was time-barred, there was no proof of purchase order/contract between the parties, and service of the respondent was not effected through substituted

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## Facts

M/s Krystal Integrated Services Pvt. Ltd. (Appellant) filed a petition for winding up M/s Indiaontime Express Private Limited (Corporate Debtor) before the High Court of Karnataka, which was later transferred to the National Company Law Tribunal (NCLT), Bengaluru Bench. The Appellant claimed to have supplied manpower to the Corporate Debtor between September 2012 and December 2013, raising invoices for Rs.1,89,25,381/-, out of which only Rs.1,06,53,549/- was paid. The Appellant alleged an outstanding amount of Rs.81,49,542/- along with interest at 14% per annum calculated till July 31, 2017, totaling Rs.1,25,56,766/-. The NCLT rejected the application for initiating Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was justified in rejecting the application for initiating …

**Ratio:** The Adjudicating Authority can reject an application under Section 9 of the I&B Code

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**Reasoning:** The Adjudicating Authority rejected the application primarily because the Appellant

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**Interpretation:** Section 9 of the I&B Code outlines the procedure for initiating CIRP by an

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**Application:** In this case, the Appellant's failure to serve the demand notice on the

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## Parties

- **Judges:** Bansi Lal…; Balvinder…
- **Appellants:** M/s Krystal…
- **Respondents:** M/s Indiaontime…
- **Advocates:** Mritunjay Kr.…

## Timeline

- **2016-01-01 — Appellant filed…**: Appellant filed a petition under Section 433 r/w Section 434 and 439 of the Companies…
- **2016-12-07 — Petition transferred to…**: The petition was transferred to National Company Law Tribunal, Bengaluru Bench in terms…

## 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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