# In the matter of Autodecor Pvt. Ltd. IB-530-(ND)-2018

> NCLT judgment dated 2018-08-02. Citation: TCN-2018-NCLT-01013. The petition was filed under Section 9 of the Insolvency and Bankruptcy Code (IBC) for…

- **Court:** NCLT
- **Order date:** 2 Aug 2018
- **Citation:** TCN-2018-NCLT-01013
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/autodecor-pvt-ltd-ib-530-nd-2018-6827ae3f

## Summary

### Background

The petition was filed under Section 9 of the Insolvency and Bankruptcy Code (IBC) for initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor due to its inability to liquidate outstanding dues. The Operational Creditor claimed to have supplied goods on credit to the Corporate Debtor, raising 44 invoices between January and March 2014, with a total liability of Rs. 66,10,786. The Corporate Debtor issued 51 cheques between April and June 2014, which were dishonoured upon presentation. Despite repeated demands, the Corporate Debtor failed to make payments, leading the Operational Creditor to file cases under Section 138/441 of the Negotiable Instruments Act, 1881. The Corporate Debtor made partial payments of Rs. 31,85,525, reducing the

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## Facts

M/s Appl Industries Ltd (Operational Creditor) claimed that M/s Auto Décor Pvt. Ltd (Corporate Debtor) owed them Rs. 66,10,786 based on 44 invoices issued between January and March 2014 for goods supplied on credit. The Corporate Debtor issued 51 cheques between April and June 2014 to liquidate the debt, but these cheques were dishonoured. The Corporate Debtor made payments totaling Rs. 31,85,525, with the last payment on 18.03.2016, reducing the outstanding balance to Rs. 34,25,251. The Operational Creditor issued a demand notice on 02.04.2018, claiming interest at 24% p.a. The Corporate Debtor argued that the claim was barred by limitation. The payments made by the Corporate Debtor during the period of limitation are key facts, as they extended the limitation period,

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## Issues and analysis

### Issue 1: Whether the petition filed by the Operational Creditor under Section 9 of the Insolvency and …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code allows an operational creditor to

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**Reasoning:** The court found that the Corporate Debtor had failed to liquidate its outstanding dues

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**Interpretation:** Section 9 provides a mechanism for operational creditors to recover their dues

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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:** Ina Mal…; DeepaKr…
- **Appellants:** M/s. Appl…
- **Respondents:** M/s Auto Décor…

## Timeline

- **2014-01-01 — Invoices…**: Operational Creditor raised 44…
- **2014-04-01 — Cheques I…**: Corporate Debtor issued 51…

## 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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