# In the matter of Arrowline Organic Products Private Limited IBA-1031-2019

> NCLT judgment dated 2020-05-05. Citation: TCN-2020-NCLT-01385. The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 5 May 2020
- **Citation:** TCN-2020-NCLT-01385
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/arrowline-organic-products-private-limited-iba-1031-2019-1430bbf6

## Summary

### Background

The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by Rockwell Industries Limited (Operational Creditor) against Arrowline Organic Products Private Limited (Corporate Debtor) for initiation of the Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed a default of Rs. 21,00,000/-. The Corporate Debtor had placed multiple purchase orders for deep freezers with the Operational Creditor, and despite supplying the goods, payments were not made as per the agreed terms. Several post-dated cheques issued by the Corporate Debtor were dishonored, and while some payments were made subsequently, a significant amount remained outstanding. The Operational Creditor issued a demand notice, but the Corporate

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## Facts

Rockwell Industries Limited (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Arrowline Organic Products Private Limited (Corporate Debtor). The claim was for Rs. 21,00,000/-. The Operational Creditor supplied deep freezers to the Corporate Debtor based on multiple purchase orders placed in February and March 2017. The Corporate Debtor issued several post-dated cheques, some of which were dishonored with the endorsement 'Payment Stopped by the Drawer'. The Operational Creditor raised 13 invoices totaling Rs. 42,58,773/-. The Corporate Debtor made a payment of Rs. 5,00,000/- in June 2017 and issued three more post-dated cheques for the balance amount, but later requested the Operational Creditor not to

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor is maintainable under Section 9 of the …

**Ratio:** Section 9(5) of the IBC, 2016, stipulates the conditions for admitting an application by

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**Reasoning:** The court observed that the Operational Creditor had provided sufficient evidence,

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**Interpretation:** Section 9 of the IBC provides a mechanism for operational creditors to initiate

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**Application:** The court applied Section 9 to the facts of the case, finding that the

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## Parties

- **Judges:** R. VARADH…; Anil Ku…
- **Appellants:** Rockwell Industrie…
- **Respondents:** Arrowline Organic…; Arrowline Organic…

## Timeline

- **2017-02-07 — Purchase…**: Corporate Debtor placed 5…
- **2017-03-01 — Further Purcha…**: Corporate Debtor placed further two purchase orders with the Operational Creditor in 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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