# In the matter of Aunde Faze Three Autofab Ltd. C.P. (I.B) No. 762-NCLT-AHM-2019

> NCLT judgment dated 2020-03-20. Citation: TCN-2020-NCLT-01432. The case involves an application for the initiation of the Corporate Insolvency Resolution…

- **Court:** NCLT
- **Order date:** 20 Mar 2020
- **Citation:** TCN-2020-NCLT-01432
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/aunde-faze-three-autofab-ltd-cp-ib-no-762-nclt-ahm-2019-134245ce

## Summary

### Background

The case involves an application for the initiation of the Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) by Radharaman Fibres Pvt. Ltd. (Operational Creditor) against Aunde Faze Three Autofab Ltd. (Corporate Debtor) for the recovery of unpaid operational debt amounting to Rs. 14,86,693. The debt is claimed as interest on payments made by the Operational Creditor to Reliance Industries Ltd. (RIL) on behalf of the Corporate Debtor. The Corporate Debtor disputes the claim, stating there was no agreement for interest payment and that the entire amount towards the supply of material has been paid.

## Facts

Radharaman Fibres Pvt. Ltd. (Operational Creditor) filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Aunde Faze Three Autofab Ltd. (Corporate Debtor) for the recovery of Rs. 14,86,693, claimed as unpaid operational debt. The Operational Creditor claimed to be a Del-Credere Agent of Reliance Industries Ltd. (RIL), providing services to the Corporate Debtor. The Corporate Debtor placed orders for polyester yarn through RIL, with payments made by the Operational Creditor to RIL on behalf of the Corporate Debtor. The claim was for interest on payments made by the Operational Creditor to RIL from the date of payment to RIL until the amount was received from the Corporate Debtor. The Corporate Debtor argued that there was no agreement for

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## Issues and analysis

### Issue 1: Whether the petition qualifies for admission under Section 9 of the Insolvency and Bankruptcy Code, …

**Ratio:** The existence of a non-disputed debt is a sine qua non for the initiation of CIRP under

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**Reasoning:** The Adjudicating Authority found that there was no agreement between the parties for

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**Interpretation:** Section 9 of the IBC requires the existence of a non-disputed debt for the

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**Application:** In this case, the Corporate Debtor disputed the claim for interest before the

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## Parties

- **Judges:** Manorama…; Chockalingam…
- **Appellants:** Radharaman Fibres…
- **Respondents:** Aunde Faze Three…

## Timeline

- **1997-10-03 — Incorporation of…**: Aunde Faze Three Autofab Ltd. (formerly…
- **2013-04-01 — Interest Payment by…**: The Corporate Debtor inadvertently paid…

## 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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