# In the  matter of Emkay Automobile Private Limited IB-3173-ND-2019

> NCLT judgment dated 2021-10-12. Citation: TCN-2021-NCLT-00755. Swastik Pipe Limited, the Operational Creditor (OC), filed a petition under Section 9 of the…

- **Court:** NCLT
- **Order date:** 12 Oct 2021
- **Citation:** TCN-2021-NCLT-00755
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/emkay-automobile-private-limited-ib-3173-nd-2019-03fbe02e

## Summary

### Background

Swastik Pipe Limited, the Operational Creditor (OC), filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Emkay Automobiles Industries Limited, the Corporate Debtor (CD), due to alleged default in settling an amount of Rs 1,20,04,712 as on 17.07.19, including interest at 18% PA towards the supply of Precision Tubes. The OC had been supplying to the CD on a running account basis since 2017 & 2018. The CD issued eleven cheques towards part payment, but some were dishonored. The OC issued a demand notice, and the CD made a partial payment after receiving it.

## Facts

Swastik Pipe Limited (OC) supplied Precision Tubes to Emkay Automobiles Industries Limited (CD) on a running account basis since 2017-2018. As of 17.07.19, an amount of Rs 1,20,04,712 was outstanding, including interest. The CD issued eleven cheques towards part payment, but seven were dishonored on 28.06.19, and two more on 17.07.19. The OC issued a demand notice on 29.07.19. The CD paid Rs 24,28,408 after receiving the demand notice, which the OC adjusted against interest. The CD acknowledged an outstanding amount of Rs 60,00,000 including interest in an email dated 21.07.21 and proposed a payment plan. The OC filed a petition under Section 9 of IBC to initiate CIRP. The CD claimed supplies were not as per agreed terms, causing losses, and cheques were given as

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## Issues and analysis

### Issue 1: Whether the Operational Creditor (OC) has established the existence of a debt and default on the …

**Ratio:** Section 9 of the IBC requires the Operational Creditor to demonstrate the existence of a

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**Reasoning:** The court relied on the email communications from the Corporate Debtor acknowledging the

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**Interpretation:** The court interpreted Section 9 of the IBC to mean that the Operational

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**Application:** The court applied the ratio to the facts of the case, noting that the Corporate

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## Parties

- **Judges:** ABNI RANJAN KUMAR…; K.K. V…
- **Appellants:** Swastik Pipe…
- **Respondents:** Emkay Automobiles…
- **Advocates:** Sanjay…; Kapil…

## Timeline

- **2017-01-01 — Supply Com…**: Swastik Pipe Limited started supplying Precision Tubes to Emkay Automobiles Industries…
- **2019-07-17 — Outstanding…**: The outstanding amount was Rs…

## 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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