# In the matter of Arsh Associates Private Limited Company Petition (IB) No. 3496-ND-2019

> NCLT judgment dated 2021-04-27. Citation: TCN-2021-NCLT-02272. The case involves a petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 27 Apr 2021
- **Citation:** TCN-2021-NCLT-02272
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/arsh-associates-private-limited-company-petition-ib-no-3496-nd-2019-289e3b48

## Summary

### Background

The case involves a petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, by Storm Export Private Limited (Operational Creditor) against M/s Arsh Associates Private Limited (Corporate Debtor) for initiation of Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed that the Corporate Debtor defaulted on payments for Italian Marble supplied in March 2017. The Corporate Debtor argued that payments were made to Arsh Buildcom, a sole proprietorship, and there was no agreement with the Petitioner.

## Facts

In the first week of March 2017, representatives of M/s Arsh Associates Private Limited (Corporate Debtor) approached Storm Export Private Limited (Operational Creditor) to purchase stones and marbles for construction projects. An order was placed for Italian Marble - DYNA, totaling 1843.97 sq. ft. The goods were delivered on March 16, 2017, to a site in Noida, Uttar Pradesh, as instructed by the Corporate Debtor. Invoice No. 012, dated March 16, 2017, for Rs. 4,96,1661/- was issued by the Operational Creditor to the Corporate Debtor. The Corporate Debtor allegedly assured immediate payment upon receipt of the invoice, with an agreement for 24% per annum interest on delayed payments. On September 11, 2017, the Corporate Debtor made a partial payment of Rs. 75,000/-.

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## Issues and analysis

### Issue 1: Whether the demand notice sent by the Operational Creditor was in compliance with Rule 5 of the …

**Ratio:** Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules,

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**Reasoning:** The court reasoned that the choice between Form 3 and Form 4 depends on whether the claim

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**Interpretation:** The court interpreted Rule 5 and Section 8(1) to mean that the demand notice

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**Application:** The court applied this interpretation to the facts, finding that since the

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## Parties

- **Judges:** ABNI RANJAN KUMAR…; K.K. V…
- **Appellants:** Storm Export…
- **Respondents:** M/s Arsh Associate…

## Timeline

- **2017-03-01 — Corporate Debtor…**: Representatives of Corporate Debtor approached Operational Creditor for buying stones and…
- **2017-03-16 — Goods Delivered and…**: Italian Marble - DYNA delivered. Invoice…

## 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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