# In the matter of Chowel India Private Limited IBA-1121-2019

> NCLT judgment dated 2020-05-05. Citation: TCN-2020-NCLT-01383. The Operational Creditor, Airpack Gases, filed an application under Section 9 of the Insolvency…

- **Court:** NCLT
- **Order date:** 5 May 2020
- **Citation:** TCN-2020-NCLT-01383
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/chowel-india-private-limited-iba-1121-2019-97082dfa

## Summary

### Background

The Operational Creditor, Airpack Gases, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against the Corporate Debtor, Chowel India Private Limited, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed an unpaid debt of Rs. 34,67,698/- for the supply of gases to the Corporate Debtor. The Corporate Debtor initially disputed the claim but later appeared to accept it, seeking time for settlement. The Corporate Debtor's directors were also in police custody during the proceedings.

## Facts

Airpack Gases, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Chowel India Private Limited, a corporate debtor, for an unpaid debt of Rs. 34,67,698/-. Airpack Gases supplied gases to Chowel India Private Limited for their manufacturing purposes, based on purchase orders. The credit period for payments was mutually agreed upon as 60 days, but Chowel India Private Limited failed to make payments for around 120 invoices. Airpack Gases sent a demand notice on 03.07.2019, which was returned with an endorsement "Company Closed". The directors of Chowel India Private Limited were in police custody during the proceedings. Chowel India Private Limited initially disputed the claim but later

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor is to be admitted under Section 9(5) of …

**Ratio:** Section 9(5) of the IBC, 2016, provides that the Adjudicating Authority shall, within

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**Reasoning:** The Tribunal considered the facts and circumstances of the case, the documents filed, and

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**Interpretation:** Section 9(5) mandates the admission of an application if it meets the

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**Application:** The Tribunal applied Section 9(5) to the facts of the case and found that the

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## Parties

- **Judges:** R. VARADH…; Anil Ku…
- **Appellants:** AIRPACK…
- **Respondents:** Chowel India…

## Timeline

- **2019-07-03 — Demand N…**: Operational Creditor sent a Demand Notice in Form-3 under Section 8 of the IBC, 2016 to…
- **2020-01-08 — Appearance of Corporate…**: Corporate Debtor entered appearance through his Counsel, who filed his vakalath before…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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