# In the matter of Aarti Suitings Pvt. Ltd. CP No. (IB)- 02-9-JPR-2021

> NCLT judgment dated 2021-06-17. Citation: TCN-2021-NCLT-01957. Sangam (India) Limited, an operational creditor, filed an application under Section 9 of the…

- **Court:** NCLT
- **Order date:** 17 Jun 2021
- **Citation:** TCN-2021-NCLT-01957
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/aarti-suitings-pvt-ltd-cp-no-ib-02-9-jpr-2021-e070dee4

## Summary

### Background

Sangam (India) Limited, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Aarti Suitings Pvt. Ltd., the corporate debtor. The application was filed due to the corporate debtor's default in payment of invoices for goods/products supplied by the operational creditor since 2017. The operational creditor claimed that the corporate debtor defaulted in making payments from December 2017 to October 2018, for a total of 25 invoices. A demand notice was issued on 05.11.2020, demanding Rs. 1,00,83,105/-, which was served on 09.11.2020. The corporate debtor acknowledged its liability but made no payment.

## Facts

Sangam (India) Limited (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Aarti Suitings Pvt. Ltd. (Corporate Debtor). The Operational Creditor had been supplying goods/products to the Corporate Debtor since 2017. The Corporate Debtor was required to make payments within 4 days of the invoice date, failing which interest at 18% p.a. would be applicable. The Corporate Debtor defaulted on payments from December 2017 to October 2018, covering 25 invoices. The Operational Creditor issued a demand notice on 05.11.2020, claiming Rs. 1,00,83,105/-, served on 09.11.2020. The Corporate Debtor acknowledged the debt in a reply dated 19.11.2020 but did not make

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## Issues and analysis

### Issue 1: Whether the application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, for …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016, allows an operational creditor to

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**Reasoning:** The Adjudicating Authority considered the application filed by the Operational Creditor,

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**Interpretation:** Section 9 provides a mechanism for operational creditors to recover their dues

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**Application:** The application was found to be complete, and the Corporate Debtor's registered

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## Parties

- **Judges:** Ajay Kumar…; RaghuNa…
- **Appellants:** Sangam (India)…
- **Respondents:** Aarti Suitings…

## Timeline

- **2017-01-01 — Supply of Goods…**: Sangam (India) Limited started supplying…
- **2017-12-01 — Default in…**: Aarti Suitings Pvt. Ltd. defaulted in making…

## 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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