# In the matter of Flowline Instrumentation Pvt. Ltd. C.P. (IB) No.28-BB-2019

> NCLT judgment dated 2019-10-23. Citation: TCN-2019-NCLT-00834. M/s. SWAN Analytische Instrumente AG, an operational creditor, filed a petition under Section 9…

- **Court:** NCLT
- **Order date:** 23 Oct 2019
- **Citation:** TCN-2019-NCLT-00834
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/flowline-instrumentation-pvt-ltd-cp-ib-no28-bb-2019-9f4fd1f6

## Summary

### Background

M/s. SWAN Analytische Instrumente AG, an operational creditor, filed a petition under Section 9 of the IBC, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Flowline Instrumentation Private Limited, the corporate debtor, due to an alleged default in payment of USD 375,320.06. The operational creditor claimed that the corporate debtor failed to honor payment terms for water sanitation equipment supplied, despite repeated reminders and acknowledgements of the debt. The corporate debtor raised objections, including disputes regarding the service of the demand notice and allegations of breach of contract by the operational creditor.

## Facts

M/s. SWAN Analytische Instrumente AG (Operational Creditor) supplied water sanitation equipment to M/s. Flowline Instrumentation Pvt. Ltd. (Corporate Debtor). The Corporate Debtor placed purchase orders, and the Operational Creditor raised corresponding invoices with payment terms. The Corporate Debtor failed to honor the payment terms, resulting in an outstanding amount of USD 375,320.06. The Operational Creditor sent an email on 19.08.2016, detailing the pending invoices, and the Corporate Debtor acknowledged the debt via email on the same date. The Operational Creditor issued a statutory Demand Notice on 16.02.2017, and a legal notice on 03.03.2017. The Corporate Debtor claimed the Demand Notice was not served to the correct address and alleged a breach of contract

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a default in payment of the operational debt owed to the …

**Ratio:** Section 9 of the IBC, 2016 allows an operational creditor to initiate CIRP against a

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**Reasoning:** The Corporate Debtor failed to make payments for the supplied water sanitation equipment

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**Interpretation:** The court interpreted Section 9 of the IBC to mean that if an operational debt

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**Application:** The court applied the ratio to the facts, noting the existence of invoices,

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## Parties

- **Judges:** Rajeswara Rao…
- **Appellants:** M/s. SWAN…
- **Respondents:** M/s. Flowline…

## Timeline

- **2002-05-23 — Incorporation of…**: M/s. Flowline Instrumentation Private Limited…
- **2016-08-19 — Operational Creditor's…**: Operational Creditor informed the Corporate Debtor that the outstanding amount due was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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