# In the matter of Ajay Knitwears & Fabrics Pvt. Ltd. CP (IB) No. 126-Chd-Pb-2017

> NCLT judgment dated 2018-03-12. Citation: TCN-2018-NCLT-01719. The case involves an application filed by Mahavir Traders, an operational creditor, under…

- **Court:** NCLT
- **Order date:** 12 Mar 2018
- **Citation:** TCN-2018-NCLT-01719
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ajay-knitwears-fabrics-pvt-ltd-cp-ib-no-126-chd-pb-2017-a2ac4c72

## Summary

### Background

The case involves an application filed by Mahavir Traders, an operational creditor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Ajay Knitwears & Fabrics Pvt. Ltd., the corporate debtor, for unpaid dues related to the supply of yarn. The petitioner claimed that the corporate debtor failed to pay an outstanding amount of ₹8,98,285/- despite a demand notice. The corporate debtor contested the claim, alleging non-delivery of goods and disputing the debt. The NCLT considered the arguments of both parties, including the petitioner's reliance on the corporate debtor's balance sheet acknowledging the debt and the respondent's claim of a pre-existing dispute and the claim being time-barred.

## Facts

Mahavir Traders, a partnership firm, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Ajay Knitwears & Fabrics Pvt. Ltd., seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The claim arose from the supply of yarn by Mahavir Traders to Ajay Knitwears & Fabrics. A demand notice was sent on 11.08.2017 for an outstanding amount of ₹8,98,285/-, related to invoices for supplies made between 11.06.2008 and 21.04.2009. The last payment was allegedly made on 19.07.2011. The corporate debtor claimed non-delivery of goods and raised a dispute through letters dated 20.06.2009 and 24.07.2010. The petitioner relied on the corporate debtor's balance sheet as of March 2016, which showed trades payable to Mahavir Traders

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## Issues and analysis

### Issue 1: Whether the requirements of Section 9(1) to (3) of the Insolvency and Bankruptcy Code, 2016 are …

**Ratio:** Section 9 of the IBC outlines the conditions for an operational creditor to initiate the

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**Reasoning:** The NCLT found that the petitioner had demonstrated the existence of an operational debt

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**Interpretation:** Section 9(1) to (3) of the IBC sets out the procedural and substantive

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**Application:** The NCLT applied the provisions of Section 9(1) to (3) to the facts of the

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## Parties

- **Judges:** R.P.Nag…; Pradeep R.…
- **Appellants:** Mahavir T…
- **Respondents:** Ajay Knitwears &…

## Timeline

- **2017-11-15 — Petition…**: The petition was filed…
- **2017-11-11 — Affidavit by P…**: Shri Gulshan Kumar Jain, Partner of the…

## 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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