# In the matter of BTM Industries Ltd. CP-IB-544-ND-2017

> NCLT judgment dated 2018-06-08. Citation: TCN-2018-NCLT-01310. M/s M.N.Auxichem, an operational creditor, filed a petition under the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 8 Jun 2018
- **Citation:** TCN-2018-NCLT-01310
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/btm-industries-ltd-cp-ib-544-nd-2017-5d0233a8

## Summary

### Background

M/s M.N.Auxichem, an operational creditor, filed a petition under the Insolvency and Bankruptcy Code (IBC), 2016 against M/s BTM Industries Limited, the corporate debtor, alleging default in payment of Rs. 18,67,689/- plus applicable interest for the supply of chemicals used in the textile industry. The corporate debtor disputed the claim, alleging that the quality of goods supplied by the operational creditor was not of good quality, which forced the corporate debtor to file a suit for permanent injunction. The operational creditor contended that the dispute raised by the corporate debtor was a mere sham and illusory and not pre-existing.

## Facts

M/s M.N.Auxichem (Operational Creditor) filed a petition against M/s BTM Industries Limited (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, claiming a default of Rs. 18,67,689/- plus interest. The claim arose from the supply of chemicals to the Corporate Debtor. The Corporate Debtor allegedly defaulted on payments. The Operational Creditor issued a notice under Section 8 of the IBC, 2016. The Corporate Debtor replied, disputing the debt and claiming the goods were of poor quality, leading to a suit for permanent injunction. The Operational Creditor argued the dispute was a sham and not pre-existing. The Corporate Debtor failed to appear before the Tribunal despite notices. The Tribunal noted the Corporate Debtor had acknowledged the debt

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## Issues and analysis

### Issue 1: Whether the petition filed by the operational creditor under Section 9(5) of the IBC, 2016 is to be …

**Ratio:** The petition is required to be admitted if the debt is due and there is a default, and

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**Reasoning:** The Tribunal found that the corporate debtor had acknowledged the debt in its accounts

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**Interpretation:** Section 9(5) of the IBC, 2016 provides for the admission of a petition filed by

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**Application:** In this case, the Tribunal found that the debt was due and there was a default.

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## Parties

- **Judges:** R. VARADH…; DR.V.K.Su…
- **Appellants:** M/s. Μ.Ν. A…
- **Respondents:** M/s. BTM Industrie…
- **Advocates:** Ankit S…

## Timeline

- **1998-02-20 — Incorporation of…**: M/s BTM Industries…
- **2015-02-02 — Date of D…**: The date of default giving rise to…

## 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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