# In the matter of Effimax Engineers Private Limited CP(IB)-36(CHE)-2021

> NCLT judgment dated 2021-12-15. Citation: TCN-2021-NCLT-00161. The case pertains to an application filed by Narendra Sakariya, an operational creditor,…

- **Court:** NCLT
- **Order date:** 15 Dec 2021
- **Citation:** TCN-2021-NCLT-00161
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/effimax-engineers-private-limited-cpib-36che-2021-7b4d6115

## Summary

### Background

The case pertains to an application filed by Narendra Sakariya, an operational creditor, against M/s. Effimax Engineers Private Limited, the corporate debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP). The operational creditor claimed a default of Rs. 1,96,76,012/-, including principal and interest. The corporate debtor admitted to the principal amount of Rs. 1,32,04,740/- but disputed the interest. The corporate debtor raised objections, including the applicability of COVID-19 exclusions and the demise of one of its directors. The operational creditor contended that the default occurred before the COVID-19 period and that the application is maintainable.

## Facts

Narendra Sakariya, the operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Effimax Engineers Private Limited, the corporate debtor, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The operational creditor claimed that the corporate debtor defaulted on a payment of Rs. 1,96,76,012/-, which included a principal amount of Rs. 1,32,04,740/- and interest of Rs. 64,71,272/- calculated at 24% p.a. The operational creditor supplied iron and steel materials to the corporate debtor based on purchase orders. The corporate debtor admitted to the principal amount but disputed the interest. The operational creditor issued a demand notice under Section 8 of the IBC on 11.02.2020. The corporate debtor

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## Issues and analysis

### Issue 1: Whether the application filed by the operational creditor is maintainable under Section 9 of the …

**Ratio:** Section 9(5) of the IBC allows for the admission of an application if a default has

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**Reasoning:** The court found that the corporate debtor admitted to the principal amount of the debt,

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

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**Application:** The court applied Section 9(5) of the IBC to the facts of the case, finding

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## Parties

- **Judges:** S. Ramath…; Anil Ku…
- **Appellants:** Narendra Sa…
- **Respondents:** Effimax Engineers…
- **Advocates:** J. Le…; S.A. Inba…

## Timeline

- **1995-12-12 — Incorporation of…**: Effimax Engineers Private Limited…
- **2019-08-07 — Date of Last…**: Date of the last supply made by the…

## 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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