# In the matter of Emsons Organics Ltd. CP (IB) No. 153-Chd-Pb-2019

> NCLT judgment dated 2019-09-27. Citation: TCN-2019-NCLT-01218. The case involves a petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 27 Sept 2019
- **Citation:** TCN-2019-NCLT-01218
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/emsons-organics-ltd-cp-ib-no-153-chd-pb-2019-a143c0e5

## Summary

### Background

The case involves a petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by Parmod Sharma (Operational Creditor) against Emsons Organics Ltd (Corporate Debtor) for initiating the Corporate Insolvency Resolution Process (CIRP). The operational creditor claimed that the corporate debtor had engaged him for attending Excise & DGFT Matters before various Tribunals and Courts situated in the State of Punjab, with a settled fee of ₹1 lac per financial year. Two bills were raised for the financial years 2014-15 and 2015-16, totaling ₹2 lacs. The total amount of debt claimed was ₹2,12,800/-, including principal and interest. A demand notice was issued and served on the corporate debtor. The corporate debtor acknowledged the principal amount due but

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## Facts

Parmod Sharma, an operational creditor, provided services to Emsons Organics Ltd, the corporate debtor, for attending Excise & DGFT Matters. A fee of ₹1 lac per financial year was agreed upon. Two bills were raised for FY 2014-15 and FY 2015-16, totaling ₹2 lacs. The operational creditor claimed a total debt of ₹2,12,800/-, including principal and interest at 12% per annum. A demand notice was issued on 12.04.2017 and served on the corporate debtor on 23.04.2017. The corporate debtor, in its reply dated 22.07.2019, admitted the principal amount of ₹1,90,000/- but denied the interest component, stating that no interest on delayed payments was ever agreed upon. The operational creditor filed an affidavit stating that the corporate debtor had acknowledged the debt in

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## Issues and analysis

### Issue 1: Whether the operational debt was …

**Ratio:** Section 9(5)(i) of the Insolvency and Bankruptcy Code, 2016, states that the Adjudicating

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**Reasoning:** The Adjudicating Authority noted that the corporate debtor admitted the principal amount

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**Interpretation:** The existence of a dispute regarding the operational debt is a crucial factor

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**Application:** In this case, the corporate debtor admitted the principal amount of the debt,

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## Parties

- **Judges:** Ajay Kumar…; Pradeep R.…
- **Appellants:** Parmod S…
- **Respondents:** Emsons Organics…

## Timeline

- **2014-04-01 — Bill Rai…**: Bill raised for FY…
- **2015-04-05 — Bill Rai…**: Bill raised for FY…

## 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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