# In the matter of Baibhav Properties Private Limited CP (IB) No. 115-CTB-2019

> NCLT judgment dated 2021-11-30. Citation: TCN-2021-NCLT-00330. The case involves an application filed by Gaja Laxmi Construction, an operational creditor,…

- **Court:** NCLT
- **Order date:** 30 Nov 2021
- **Citation:** TCN-2021-NCLT-00330
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/baibhav-properties-private-limited-cp-ib-no-115-ctb-2019-18707ab1

## Summary

### Background

The case involves an application filed by Gaja Laxmi Construction, an operational creditor, under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Baibhav Properties Private Limited. Gaja Laxmi Construction claimed that Baibhav Properties owed them Rs. 88,73,958.00/- for construction work. The corporate debtor admitted to owing a smaller amount of Rs. 17,44,194/- but did not pay it. The operational creditor had sent a statutory demand notice, which the corporate debtor claimed was defective.

## Facts

Gaja Laxmi Construction, a sole proprietorship, filed an application under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Baibhav Properties Private Limited, claiming an outstanding debt of Rs. 88,73,958.00/- for construction work. The operational creditor raised 23 tax invoices for a sum of Rs. 3,41,95,626/-. The corporate debtor had paid Rs. 2,47,17,671.00/- after deducting Rs. 6,03,997.00/- towards TDS. The last payment was made on 06.10.2016. The operational creditor sent a statutory demand notice dated 25.07.2019, which was delivered on 03.07.2019. The corporate debtor replied on 27.07.2019, admitting liability to the extent of Rs. 17,44,194/- but did not pay. The corporate debtor

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## Issues and analysis

### Issue 1: Whether the Application …

**Ratio:** The NCLT relied on previous judgments, including Neeta Saha vs Ram Niwas Gupta, which

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**Reasoning:** The NCLT considered the argument that a sole proprietorship cannot initiate CIRP because

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**Interpretation:** The NCLT interpreted the provisions of the IBC to allow a sole proprietorship

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**Application:** The NCLT applied the ratio from Neeta Saha vs Ram Niwas Gupta to the facts of

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## Parties

- **Judges:** P. Moha…; Satya Ranjan…
- **Appellants:** Santosh Kumar…
- **Respondents:** Baibhav Properties…

## Timeline

- **2016-10-06 — Last Pay…**: The corporate debtor made the…
- **2019-07-03 — Demand Notice…**: The statutory demand notice was…

## 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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