# In the matter of A R Coating Solutions (India) Pvt. Ltd. CP No. 4719 (IB)-MB-C-IV-2018

> NCLT judgment dated 2019-09-20. Citation: TCN-2019-NCLT-01346. The case originates from a Company Petition filed under Section 9 of the Insolvency &…

- **Court:** NCLT
- **Order date:** 20 Sept 2019
- **Citation:** TCN-2019-NCLT-01346
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/a-r-coating-solutions-india-pvt-ltd-cp-no-4719-ib-mb-c-iv-2018-a8188443

## Summary

### Background

The case originates from a Company Petition filed under Section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) by ABC Infra Equipment Private Limited (the Operational Creditor) seeking to initiate Corporate Insolvency Resolution Process (CIRP) against A R Coating Solutions (India) Private Limited (the Corporate Debtor). The Operational Creditor claims that the Corporate Debtor failed to pay a sum of Rs. 11,34,230/- as the principal amount, with interest at 18% per annum, as per invoices. The date of default is 08.06.2017.

## Facts

ABC Infra Equipment Private Limited, the Operational Creditor, filed a petition under Section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against A R Coating Solutions (India) Private Limited, the Corporate Debtor. The Operational Creditor claimed a default of Rs. 11,34,230/- as the principal amount, with interest at 18% per annum, based on unpaid invoices. The date of default was 08.06.2017. The Operational Creditor supplied Boom Lifts 120 ft crane to the Corporate Debtor. The Corporate Debtor issued a letter dated 08.06.2017 acknowledging the outstanding amount. The Corporate Debtor also issued two cheques, one for Rs. 5,50,983/- dated 16.04.2017 and another for Rs. 11,34,232/- dated 17.07.2018,

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in making payment of Rs. 11,34,230/- to the Operational …

**Ratio:** The existence of both debt and default must be established for the initiation of CIRP

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**Reasoning:** The Corporate Debtor failed to make payment of the outstanding amount as per the

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**Interpretation:** Section 9 of the IBC requires the establishment of both debt and default for

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**Application:** The Corporate Debtor's failure to pay Rs. 11,34,230/- as per the invoices,

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## Parties

- **Judges:** Rajasekha…; RavikumarDu…
- **Appellants:** ABC Infra…
- **Respondents:** A R Coating…

## Timeline

- **2017-03-11 — Invoice…**: Invoice No. 573 for Rs.…
- **2017-04-14 — Invoice…**: Invoice No. 038 for Rs.…

## 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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