# In the matter of Cookme (Spice) Pvt  Ltd. CP(IB) No. 202-KB-2018

> NCLT judgment dated 2019-11-25. Citation: TCN-2019-NCLT-00463. Sanjay Stores, an operational creditor, filed an application under Section 9 of the Insolvency…

- **Court:** NCLT
- **Order date:** 25 Nov 2019
- **Citation:** TCN-2019-NCLT-00463
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/cookme-spice-pvt-ltd-cpib-no-202-kb-2018-615be47e

## Summary

### Background

Sanjay Stores, an operational creditor, filed an application under Section 9 of the Insolvency & Bankruptcy Code, 2016, against M/s. Cookme(Spice) Pvt. Ltd., the corporate debtor, alleging default in payment of Rs. 61,86,420/- for delivered spices. The Corporate Debtor raised objections regarding the maintainability of the application, arguing that a proprietary concern cannot be sued in its own name and that there was a pre-existing dispute regarding the invoices. The application was initially considered by Bench-II, which passed an ex parte order of admission, but this order was later set aside. The case was then reconsidered by the current bench.

## Facts

Sanjay Stores, an operational creditor, filed an application against M/s. Cookme(Spice) Pvt. Ltd., a corporate debtor, under Section 9 of the Insolvency & Bankruptcy Code, 2016. The application claimed a default of Rs. 61,86,420/- for spices delivered by Sanjay Stores to Cookme(Spice). Cookme(Spice) made some payments via cheques. The Operational Creditor issued a demand notice under Section 8(1) of the Code, which the Corporate Debtor received and contested. The Corporate Debtor argued that the application was not maintainable because Sanjay Stores is a proprietary concern and there was a pre-existing dispute regarding the invoices. A criminal proceeding regarding fabrication of invoices was initiated against the Operational Creditor. The demand notice was issued

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## Issues and analysis

### Issue 1: Whether the application filed by Sanjay Stores, a proprietary concern, is maintainable under …

**Ratio:** A proprietary concern has no legal existence and cannot sue in its own name. Section

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**Reasoning:** The court relied on the argument presented by the Corporate Debtor's counsel and a

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**Interpretation:** Section 9 of the IBC allows operational creditors to initiate CIRP. However,

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**Application:** In this case, Sanjay Stores, being a proprietary concern, does not qualify as a

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## Parties

- **Judges:** Jinan…; Harish Chander…
- **Appellants:** Sanjay S…
- **Respondents:** M/s. Cookme(Spice)…

## Timeline

- **2017-04-05 — Demand Notice…**: The Operational Creditor issued a…
- **2017-07-07 — Corporate Debto…**: The Corporate Debtor replied to the demand notice, admitting receipt but disputing the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8(1) — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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