# In the matter of Rakesh Kumar vs. Flourish Paper & Chemicals Ltd.

> NCLAT judgment dated 2023-09-27. Citation: TCN-2023-NCLAT-00165. This is an appeal against the order dated 12.09.2022 passed by the Adjudicating Authority…

- **Court:** NCLAT
- **Order date:** 27 Sept 2023
- **Citation:** TCN-2023-NCLAT-00165
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/rakesh-kumar-vs-flourish-paper-chemicals-ltd-06fdff87

## Summary

### Background

This is an appeal against the order dated 12.09.2022 passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi Bench, Court-II) in CP (IB) No.603(ND)/2020, which admitted the application under Section 9 of the IBC filed by Flourish Paper & Chemicals Ltd. (Respondent No.1) and initiated Corporate Insolvency Resolution Process (CIRP) against Suchi Paper Mills Ltd. (Corporate Debtor). The appeal was filed by the suspended director of the Corporate Debtor, Rakesh Kumar.

## Facts

Flourish Paper & Chemicals Ltd. (Operational Creditor) supplied goods to Suchi Paper Mills Ltd. (Corporate Debtor). Bills were raised between 08.10.2016 and 17.12.2016. The outstanding debt was Rs. 20,91,690/-, including interest of Rs.7,49,460/-. The Operational Creditor issued a demand notice under Section 8 of IBC on 02.01.2020. The Corporate Debtor replied on 13.01.2020, demanding Rs 25,00,000/- for loss due to poor quality of goods. Prior to the Section 8 notice, a legal notice was issued on 05.12.2019 seeking Rs 13,42,230/-. The Corporate Debtor replied on 16.12.2019, demanding Rs 25,00,000/- for losses. The Operational Creditor filed a Section 9 application. The Adjudicating Authority admitted the application on 12.09.2022. The Corporate Debtor claimed it

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in admitting the Section 9 application filed by the …

**Ratio:** The Adjudicating Authority can admit a Section 9 application if the operational debt

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**Reasoning:** The NCLAT found that the Adjudicating Authority had carefully considered the replies and

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

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**Application:** The NCLAT applied the ratio to the facts of the case, noting that the

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Rakesh…
- **Respondents:** Suchi Paper Mills…; Flourish Paper &…
- **Advocates:** Nilesh S…; Hemant S…; +9 more

## Timeline

- **2016-10-08 — Invoices…**: Operational Creditor raised invoices…
- **2016-12-17 — Invoices…**: Operational Creditor raised invoices…

## 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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