# In the matter of Arpita Filaments Private Limited C.P. No.(IB) 182-9-NCLT-AHM-2018

> NCLT judgment dated 2019-09-26. Citation: TCN-2019-NCLT-01221. The case involves an application filed by SVG Fashions Limited, an operational creditor,…

- **Court:** NCLT
- **Order date:** 26 Sept 2019
- **Citation:** TCN-2019-NCLT-01221
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/arpita-filaments-private-limited-cp-noib-182-9-nclt-ahm-2018-a76fec46

## Summary

### Background

The case involves an application filed by SVG Fashions Limited, an operational creditor, against Arpita Filaments Private Limited, the corporate debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016. SVG Fashions claimed that Arpita Filaments defaulted on payments for supplied fabrics. The operational creditor had been supplying fabrics to the corporate debtor since 2013, and initially, payments were regular. However, around August 2013, irregular payments began, and bills were not cleared on time. The operational creditor issued a demand notice under Section 8 of the IBC, seeking payment of Rs. 43,96,593/- towards outstanding bills from 11.08.2013 to 02.09.2013, plus interest. The corporate debtor raised objections, including the lack of proper service

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## Facts

SVG Fashions Limited (operational creditor) supplied fabrics to Arpita Filaments Private Limited (corporate debtor) since 2013. Initially, payments were regular, but around August 2013, payments became irregular. The operational creditor issued a demand notice on 19th March, 2018, under Section 8 of the Insolvency and Bankruptcy Code, claiming Rs. 43,96,593/- towards outstanding bills from 11.08.2013 to 02.09.2013, plus interest. The corporate debtor raised objections, claiming lack of service of demand notice, absence of board resolution authorizing the demand notice, and that the invoices were time-barred. The operational creditor submitted proof of dispatch of the demand notice and a board resolution authorizing Mr. D.M. Agarwal to file the petition. The operational

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## Issues and analysis

### Issue 1: Whether there was proper service of the demand notice by the operational creditor to the corporate …

**Ratio:** The principle is that a demand notice must be duly served upon the corporate debtor to

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**Reasoning:** The Adjudicating Authority examined the proof of dispatch filed by the operational

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**Interpretation:** The service of demand notice is a mandatory requirement under Section 8 of the

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**Application:** In this case, the operational creditor provided a copy of the proof of

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## Parties

- **Judges:** Manorama…; Chockalingam…
- **Appellants:** SVG FASHIONS…
- **Respondents:** Arpita Filaments…

## Timeline

- **2013-01-01 — Business Rela…**: SVG Fashions Limited started supplying…
- **2013-08-01 — Payment Irregu…**: Arpita Filaments Private Limited…

## 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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