# In the matter of Avani Energy Solutions Private Limited CP (IB) No.132-9-HDB-2017

> NCLT judgment dated 2018-05-11. Citation: TCN-2018-NCLT-01423. Philips Lighting India Limited, the operational creditor, filed an application under Section 9…

- **Court:** NCLT
- **Order date:** 11 May 2018
- **Citation:** TCN-2018-NCLT-01423
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/avani-energy-solutions-private-limited-cp-ib-no132-9-hdb-2017-ec31d3a3

## Summary

### Background

Philips Lighting India Limited, the operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Avani Energy Solutions Private Limited, the corporate debtor, due to unpaid operational debt. The debt arose from the supply of LED drivers by Philips to Avani Energy based on purchase orders. Despite delivering the materials and issuing invoices, Avani Energy failed to make payments, claiming the materials were defective, which Philips disputed. Philips issued demand notices, but Avani Energy did not respond or initiate any dispute resolution.

## Facts

Philips Lighting India Limited (Operational Creditor) supplied LED drivers to Avani Energy Solutions Private Limited (Corporate Debtor) based on purchase orders placed on 21.07.2015 and 04.08.2015. Philips delivered materials under various consignments dated 21.07.2015, 10.08.2015, and 03.09.2015. Philips issued invoices totaling Rs. 21,83,423.22. The total claim, including principal and interest, amounted to Rs. 27,83,328. Avani Energy failed to clear the amount within 45 days as per the invoice terms. Avani Energy later claimed the materials were defective. Philips issued a credit note for Rs. 66,956 in gesture of goodwill. Philips issued a demand notice on 12.09.2017, which was returned undelivered. Another demand notice was sent on 10.10.2017 and delivered on

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## Issues and analysis

### Issue 1: Whether there is an “operational …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016, requires the existence of an

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**Reasoning:** The court perused the purchase orders and invoices submitted by the operational creditor

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**Interpretation:** The term 'operational debt' is interpreted to include claims in respect of the

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**Application:** The court found that the claim of Rs. 27,83,328, which included the principal

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## Parties

- **Judges:** BIKKI RAVEENDRA…
- **Appellants:** Philips Lighting…
- **Respondents:** AVANI ENERGY…; Avani Energy…

## Timeline

- **2015-07-21 — Purchase…**: Corporate Debtor placed a Purchase…
- **2015-08-04 — Purchase…**: Corporate Debtor placed a Purchase…

## 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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