# In the matter of BR Knitwears Private Limited CP (IB) No. 300-Chd-Hry-2019

> NCLT judgment dated 2019-11-21. Citation: TCN-2019-NCLT-00515. Karma Holdings Private Limited, the operational creditor, filed a petition under Section 9 of…

- **Court:** NCLT
- **Order date:** 21 Nov 2019
- **Citation:** TCN-2019-NCLT-00515
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/br-knitwears-private-limited-cp-ib-no-300-chd-hry-2019-06adde22

## Summary

### Background

Karma Holdings Private Limited, the operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against BR Knitwears Private Limited, the corporate debtor, due to unpaid operational debt. The operational creditor claimed that the corporate debtor defaulted on payments for the supply of knitted leggings/socks. The corporate debtor acknowledged the debt but cited financial distress as the reason for non-payment.

## Facts

Karma Holdings Private Limited (Operational Creditor) filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against BR Knitwears Private Limited (Corporate Debtor) for initiating Corporate Insolvency Resolution Process (CIRP). The corporate debtor had placed an order for the supply of knitted leggings/socks (goods) upon the operational creditor. In March 2019, the operational creditor complied with the orders, supplied the goods, and raised invoices. The corporate debtor defaulted in the payment of the invoice No.KHUP/18-19/426 dated 09.03.2019, breaching the terms agreed between the parties. The operational creditor sent a letter dated 11.03.2019 to the corporate debtor to make good its outstanding debt of INR 4,88,607.00. The corporate debtor

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## Issues and analysis

### Issue 1: Whether the demand notice in Form No. 3 …

**Ratio:** The demand notice must be properly served to

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**Reasoning:** The court found that the demand notice dated 30.03.2019 was sent to the address as per

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**Interpretation:** Proper service of demand notice is a prerequisite for initiating CIRP. The

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**Application:** In this case, the demand notice was sent to the registered address of the

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## Parties

- **Judges:** Ajay Kumar…; Pradeep R.…
- **Appellants:** Karma Holdings…
- **Respondents:** BR Knitwears…
- **Advocates:** Vipul J…; Vibhu Agn…

## Timeline

- **2019-03-09 — Breach of…**: Invoice No.KHUP/18-19/426 dated 09.03.2019…
- **2019-03-11 — Letter from Operational…**: Operational creditor sent a letter to the corporate debtor to make good its outstanding…

## 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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