# In the matter of Ms. Poonam Gupta Vs. Smt. Suman Chadha & Anr.

> NCLAT judgment dated 2019-11-26. Citation: TCN-2019-NCLAT-00078. The appeal was filed by the Appellant/shareholder of Lifestyle Fitness Private Limited…

- **Court:** NCLAT
- **Order date:** 26 Nov 2019
- **Citation:** TCN-2019-NCLAT-00078
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/ms-poonam-gupta-vs-smt-suman-chadha-anr-6d84b816

## Summary

### Background

The appeal was filed by the Appellant/shareholder of Lifestyle Fitness Private Limited (Corporate Debtor), challenging the order dated 14th June, 2019, passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi Bench-III, which admitted the application filed by Respondent No. 1 (Operational Creditor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, initiating Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Corporate Debtor allegedly defaulted on payment of dues.

## Facts

Ms. Poonam Gupta, representing Lifestyle Fitness Private Limited (Corporate Debtor), filed an appeal against the order of the Adjudicating Authority, which admitted an application filed by Smt. Suman Chadha (Operational Creditor) under Section 9 of the IBC. The Operational Creditor claimed that the Corporate Debtor defaulted on payments. The Corporate Debtor argued that they had paid Rs. 25 lakhs in cash to Mr. Ritesh Vijhani, an authorized representative of the Operational Creditor. However, the Operational Creditor denied receiving this payment and claimed that the cheques issued by the Corporate Debtor were dishonored due to insufficient funds. The Adjudicating Authority admitted the application, finding no satisfactory evidence of a pending dispute. The Corporate

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## Issues and analysis

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

**Ratio:** The Adjudicating Authority can admit an application under Section 9 of the IBC if there

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**Reasoning:** The Adjudicating Authority found that the Corporate Debtor had defaulted on payments and

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**Interpretation:** Section 9 of the IBC allows an operational creditor to initiate CIRP if a debt

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**Application:** The NCLAT upheld the Adjudicating Authority's decision because the Corporate

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## Parties

- **Judges:** A.I.S. C…; KanthiNar…; +1 more
- **Appellants:** Poonam…
- **Respondents:** Lifestyle Fitness…; Suman C…

## Timeline

- **2019-06-14 — Order by Adjudicating…**: The Adjudicating Authority (National Company Law Tribunal) admitted the application filed…
- **2018-12-03 — Demand Notice…**: The 1st Respondent issued a Demand Notice claiming an amount of Rs. 26,85,907/- under…

## 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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