# In the matter of AG Conveying Systems Private Limited C.P.(IB)-4238-MB-C-IV-2018

> NCLT judgment dated 2019-12-03. Citation: TCN-2019-NCLT-00346. Steelman Engineering & Forgings, an operational creditor, filed a petition under Section 9 of…

- **Court:** NCLT
- **Order date:** 3 Dec 2019
- **Citation:** TCN-2019-NCLT-00346
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ag-conveying-systems-private-limited-cpib-4238-mb-c-iv-2018-fba7446d

## Summary

### Background

Steelman Engineering & Forgings, an operational creditor, filed a petition under Section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against AG Conveying Systems Private Limited, the corporate debtor. The operational creditor claimed that the corporate debtor defaulted on payments for steel materials supplied between June 11, 2016, and August 22, 2016, totaling Rs. 6,97,915/-. A demand notice was served on the corporate debtor on June 9, 2018, but no payment or dispute was raised by the corporate debtor.

## Facts

Steelman Engineering & Forgings (Operational Creditor) supplied steel materials to AG Conveying Systems Private Limited (Corporate Debtor) between 2016-06-11 and 2016-08-22, totaling Rs. 16,27,915/- under ten invoices. Partial payment of Rs. 3,96,205/- was received against Invoice No. 141. The Corporate Debtor failed to pay Rs. 6,97,915/- for invoices 142, 251, 252, 254, 267, and 266. The Corporate Debtor issued two cheques of Rs. 3 Lakh each, which were dishonored. The Operational Creditor served a demand notice on 2018-06-09, but the Corporate Debtor neither paid nor raised any dispute. The Corporate Debtor acknowledged the debt and its inability to pay. The Operational Creditor filed a petition on 2018-11-02. The invoices provided for interest at 18% per annum

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor is in default of a debt …

**Ratio:** Section 4(1) of the IBC stipulates a minimum default amount of one lakh rupees for

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**Reasoning:** The Corporate Debtor acknowledged the debt and its inability to pay. The Operational

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**Interpretation:** The Adjudicating Authority interpreted Section 4(1) of the IBC to mean that if

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**Application:** The Corporate Debtor's acknowledged debt of Rs. 6,97,915/- exceeded the minimum

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## Parties

- **Judges:** Rajasekha…; RavikumarDu…
- **Appellants:** Steelman Engineeri…
- **Respondents:** AG Conveying…
- **Advocates:** Girish B.…; Shivangi…; +1 more

## Timeline

- **2016-06-11 — Supply of Steel…**: Operational Creditor starts supplying…
- **2016-08-22 — Supply of Steel…**: Operational Creditor completes supplying…

## 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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