# In the matter of Didwana Spinning Mills Pvt. Ltd. CP No.493 (IB)-MB-C-IV-2018

> NCLT judgment dated 2019-10-14. Citation: TCN-2019-NCLT-00996. The case pertains to a Company Petition filed under Section 9 of the Insolvency & Bankruptcy…

- **Court:** NCLT
- **Order date:** 14 Oct 2019
- **Citation:** TCN-2019-NCLT-00996
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/didwana-spinning-mills-pvt-ltd-cp-no493-ib-mb-c-iv-2018-a4c94d13

## Summary

### Background

The case pertains to a Company Petition filed under Section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) by Srinidhi Industries Ltd. (Operational Creditor) against Didwania Spinning Mills Private Limited (Corporate Debtor) for initiating Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed that the Corporate Debtor failed to make payment of Rs.1,78,00,000/- as principal amount as per invoices dated 15.07.2016, with the date of default being 22.12.2016. The Corporate Debtor contended that there was a pre-existing dispute regarding the quality of the plant and machinery supplied and raised a counter claim of Rs.30,00,000/-.

## Facts

Srinidhi Industries Ltd. (Operational Creditor) filed a petition under Section 9 of the IBC against Didwania Spinning Mills Private Limited (Corporate Debtor) to initiate CIRP. The Operational Creditor claimed that the Corporate Debtor defaulted on a payment of Rs.1,78,00,000/- as per invoices dated 15.07.2016, with the date of default being 22.12.2016. The Operational Creditor is engaged in manufacturing and selling yarn using Plant and Machinery for Spinning Mills. The Corporate Debtor approached the Operational Creditor for the sale of Plant and machinery and other items for installation in the Spinning Mill. The Operational Creditor delivered the Plant and Machinery as per the orders and invoices dated 15.07.2016. The Corporate Debtor issued a Form-C for tax

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## Issues and analysis

### Issue 1: Whether the petition filed by the Operational Creditor under Section 9 of the IBC for initiating …

**Ratio:** Section 9 of the IBC allows an operational creditor to initiate CIRP against a corporate

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**Reasoning:** The Adjudicating Authority found that the application made by the Operational Creditor

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**Interpretation:** Section 9 of the IBC provides the mechanism for operational creditors to

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**Application:** The Adjudicating Authority admitted the petition, finding it to be in

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## Parties

- **Judges:** Rajasekha…; RavikumarDu…
- **Appellants:** Srinidhi Industrie…
- **Respondents:** Didwania Spinning…

## Timeline

- **2016-07-15 — Invoices…**: Invoices for the principal amount…
- **2016-12-22 — Date of D…**: The date of default was…

## 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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