# In the matter of Destination Texfab Private Limited IB-711-(ND)-2020

> NCLT judgment dated 2021-10-25. Citation: TCN-2021-NCLT-00706. The case involves an application filed by Transglobe Textiles Limited, the Operational…

- **Court:** NCLT
- **Order date:** 25 Oct 2021
- **Citation:** TCN-2021-NCLT-00706
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/destination-texfab-private-limited-ib-711-nd-2020-a1a4d1a1

## Summary

### Background

The case involves an application filed by Transglobe Textiles Limited, the Operational Creditor, against Destination Texofab Private Limited, the Corporate Debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) due to an alleged default in payment of Rs. 10,80,428. The Operational Creditor claims that the Corporate Debtor failed to make full payment for the supply of fabric. The application was filed before the National Company Law Tribunal (NCLT), New Delhi.

## Facts

Transglobe Textiles Limited (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Destination Texofab Private Limited (Corporate Debtor) for a default of Rs. 10,80,428. The Corporate Debtor and Operational Creditor had a business relationship involving the sale of fabric. The Corporate Debtor placed purchase orders on 15.05.2017 and 20.06.2017, and the Operational Creditor delivered the goods, raising invoices dated 20.05.2017 and 25.06.2017 for Rs 17,74,618. The Corporate Debtor was required to make full payment within 15 days of delivery. The Corporate Debtor made partial payments in August 2017 and a final payment of Rs 1,75,000 on 30.05.2019, leaving a balance of Rs. 10,80,428 outstanding. The Operational

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor under Section 9 of the Insolvency and …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016, allows an operational creditor to

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**Reasoning:** The NCLT considered the documents and arguments presented by the Operational Creditor,

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**Interpretation:** Section 9 provides a mechanism for operational creditors to recover their dues

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**Application:** The NCLT found that the Operational Creditor had provided sufficient evidence

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## Parties

- **Judges:** P.S.N. P…; Narender Kumar…
- **Appellants:** Transglobe…
- **Respondents:** Destination…

## Timeline

- **2017-05-15 — Purchase…**: Corporate Debtor placed purchase order no. 135/2017-18 on the Operational Creditor for…
- **2017-06-20 — Purchase…**: Corporate Debtor placed purchase order no. 136/2017-18 on the Operational Creditor for…

## 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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