# In the matter of Effimac Equipments Pvt. Ltd. IB-552(ND)-2018

> NCLT judgment dated 2018-06-04. Citation: TCN-2018-NCLT-01336. The petition was filed under Section 9 of the Insolvency and Bankruptcy Code (IBC) for…

- **Court:** NCLT
- **Order date:** 4 Jun 2018
- **Citation:** TCN-2018-NCLT-01336
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/effimac-equipments-pvt-ltd-ib-552nd-2018-f3453a08

## Summary

### Background

The petition was filed under Section 9 of the Insolvency and Bankruptcy Code (IBC) for initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, Effimac Equipments Pvt. Ltd., due to its inability to liquidate outstanding dues. The Operational Creditor, CG Power and Industrial Solutions Ltd., claimed that the Corporate Debtor had placed a purchase order on 13.05.2016, pursuant to which the Operational Creditor supplied equipment on 18.10.2016 and raised an invoice on 30.09.2016 for Rs. 6,24,887/-. The Operational Creditor maintained a running account, and a balance of Rs. 2,65,887/- remained outstanding despite repeated requests and reminders. Cheques tendered as payments were dishonored due to insufficient funds.

## Facts

CG Power and Industrial Solutions Ltd. (Operational Creditor) filed a petition under Section 9 of the Insolvency and Bankruptcy Code (IBC) against Effimac Equipments Pvt. Ltd. (Corporate Debtor) for its inability to pay outstanding dues. The Corporate Debtor placed a purchase order on 13.05.2016, and the Operational Creditor supplied equipment on 18.10.2016, raising an invoice on 30.09.2016 for Rs. 6,24,887/-. A balance of Rs. 2,65,887/- remained outstanding despite repeated requests. Cheques issued by the Corporate Debtor were dishonored due to insufficient funds. The Operational Creditor issued a demand notice on 14.02.2018 under Section 8 of the IBC, demanding the outstanding amount with interest, but received no reply. The Corporate Debtor failed to liquidate its

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## Issues and analysis

### Issue 1: Whether the petition under Section 9 of the Insolvency and Bankruptcy Code (IBC) for initiating the …

**Ratio:** A petition under Section 9 of the IBC is maintainable if there is a debt, a default in

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**Reasoning:** The court considered the averments made by the Operational Creditor and the documents

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

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**Application:** The court found that the Operational Creditor had established the existence of

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## Parties

- **Judges:** Ina Mal…; DeepaKr…
- **Appellants:** CG Power and…
- **Respondents:** Effimac Equipments…
- **Advocates:** Gautam S…

## Timeline

- **2016-05-13 — Purchase…**: Corporate Debtor placed a Purchase…
- **2016-09-30 — Invoice R…**: Operational Creditor raised an…

## 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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