# In the matter of Eon Electric Limited CP (IB) No. 211-Chd-Hry-2019

> NCLT judgment dated 2020-10-13. Citation: TCN-2020-NCLT-00403. M/s Signify Innovations India Limited, the operational creditor, filed a petition under Section…

- **Court:** NCLT
- **Order date:** 13 Oct 2020
- **Citation:** TCN-2020-NCLT-00403
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/eon-electric-limited-cp-ib-no-211-chd-hry-2019-e13e58e6

## Summary

### Background

M/s Signify Innovations India Limited, the operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Eon Electric Limited, the corporate debtor, due to unpaid operational debt. The operational creditor claimed that the corporate debtor had placed purchase orders for lighting products, and despite receiving the goods, failed to pay the outstanding amount. The operational creditor issued a demand notice, but the corporate debtor neither complied with the notice nor raised any dispute regarding the outstanding amount.

## Facts

M/s Signify Innovations India Limited (Operational Creditor) filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against M/s Eon Electric Limited (Corporate Debtor) for unpaid operational debt. The Corporate Debtor placed purchase orders for lighting products, and the Operational Creditor supplied the goods, raising tax invoices. The Corporate Debtor issued four cheques totaling ₹72,46,410/- towards payment, but these were dishonored due to insufficient funds. The Operational Creditor issued a legal notice dated 27.11.2018 under Section 138 of the Negotiable Instruments Act, 1981. A demand notice in Form No.3 was issued on 13.12.2018, demanding payment of ₹78,41,943/- (including principal and interest). The Corporate Debtor did not raise any

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## Issues and analysis

### Issue 1: Whether the demand notice in Form No.3 …

**Ratio:** The demand notice must be properly delivered to the corporate debtor to initiate CIRP.

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**Reasoning:** The court found that the demand notice was sent to the Corporate Debtor via multiple

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**Interpretation:** The court interpreted the requirement of proper service to mean that the demand

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**Application:** In this case, the demand notice was sent through multiple channels, and the

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## Parties

- **Judges:** Ajay Kumar…; RAGHU N…; +1 more
- **Appellants:** M/s Signify…
- **Respondents:** M/s Eon Electric…

## Timeline

- **2018-11-27 — Legal Notice…**: Operational Creditor issued a legal notice under Section 138 of the Negotiable…
- **2018-12-13 — Demand Notice…**: A demand notice in Form No.3 was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 138 — Discharge order](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-138)

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