# In the matter of Audax Protective Fabrics Private Limited CP (IB) 2204-MB-IV-2019

> NCLT judgment dated 2019-10-22. Citation: TCN-2019-NCLT-00855. The case originates from a Company Petition filed under Section 9 of the Insolvency &…

- **Court:** NCLT
- **Order date:** 22 Oct 2019
- **Citation:** TCN-2019-NCLT-00855
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/audax-protective-fabrics-private-limited-cp-ib-2204-mb-iv-2019-700b1608

## Summary

### Background

The case originates from a Company Petition filed under Section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) by Mayur Wovens Private Limited (Operational Creditor) against Audax Protective Fabrics Private Limited (Corporate Debtor). The Operational Creditor claimed that the Corporate Debtor failed to make payments for goods supplied, specifically Polypropylene Woven Fabric. The Operational Creditor dispatched goods according to the purchase order terms, which were received and acknowledged by the Corporate Debtor without any dispute. The Operational Creditor maintained a running account, and the Corporate Debtor regularly made payments against invoices. However, payments against Invoice No. L0486 dated 03.12.2017 and No. L0367 dated 18.09.2018 were not made,

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## Facts

Mayur Wovens Private Limited (Operational Creditor) filed a petition under Section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) against Audax Protective Fabrics Private Limited (Corporate Debtor) for non-payment of dues. The Operational Creditor supplied Polypropylene Woven Fabric to the Corporate Debtor based on purchase orders. The Corporate Debtor received and acknowledged the goods without raising any disputes initially. The Operational Creditor maintained a running account, and the Corporate Debtor made regular payments against invoices. However, payments for Invoice No. L0486 dated 03.12.2017 and No. L0367 dated 18.09.2018, totaling ₹7,63,821/-, remained unpaid. The Operational Creditor served a demand notice on 27.03.2019. The Corporate Debtor claimed a

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor is in default of a debt due and payable to the Operational Creditor …

**Ratio:** Section 9 of the IBC allows an operational creditor to initiate CIRP against a corporate

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**Reasoning:** The NCLT found that the Corporate Debtor had failed to make payments against two unpaid

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**Interpretation:** Section 9 of the IBC is interpreted to mean that if an operational creditor can

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**Application:** The NCLT applied the ratio to the facts by noting that the Operational Creditor

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## Parties

- **Judges:** Rajasekha…; Ravikumar…; +1 more
- **Appellants:** Mayur Wovens…
- **Respondents:** Audax Protective…

## Timeline

- **2014-01-07 — Incorporation of…**: Audax Protective Fabrics Private Limited…
- **2017-09-01 — Cessation of Quality…**: Corporate Debtor ceased to undertake quality control checks at Operational Creditor's…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 2(20) — Application](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-2)

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This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/audax-protective-fabrics-private-limited-cp-ib-2204-mb-iv-2019-700b1608