# In the matter of Fomra Sales Private Limited IBA-1115-2019

> NCLT judgment dated 2021-04-27. Citation: TCN-2021-NCLT-02283. The case involves an application filed under Section 9 of the Insolvency & Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 27 Apr 2021
- **Citation:** TCN-2021-NCLT-02283
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/fomra-sales-private-limited-iba-1115-2019-9bebb7f0

## Summary

### Background

The case involves an application filed under Section 9 of the Insolvency & Bankruptcy Code, 2016 by Nangalwala Industries Private Limited, the Operational Creditor, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Fomra Sales Private Limited, the Corporate Debtor. The Operational Creditor claimed that the Corporate Debtor failed to make payments for the wires and cables supplied. A civil suit was previously filed, resulting in a judgment and decree in favor of the Operational Creditor. An earlier CIRP application was withdrawn based on consent terms, which the Corporate Debtor allegedly failed to honor. The Corporate Debtor filed IA/1141/IB/2020 seeking time to settle the payment based on a Memorandum of Compromise.

## Facts

Nangalwala Industries Private Limited (Operational Creditor) filed an application under Section 9 of the Insolvency & Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Fomra Sales Private Limited (Corporate Debtor). Nangalwala Industries supplied wires and cables to Fomra Sales, raising invoices for the same. Fomra Sales failed to make payments, leading Nangalwala Industries to file a civil suit in Rajasthan, which resulted in a judgment and decree in their favor for Rs.76,30,716/- on 23.09.2015. A demand notice was issued on 05.02.2018 under IBC. An earlier CIRP application (IBA/1095/IB/2018) was withdrawn on 13.11.2018 after both parties entered into Consent Terms on 10.11.2018, where Fomra Sales agreed to pay

…

## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor under Section 9 of the Insolvency & …

**Ratio:** The Insolvency and Bankruptcy Code, 2016, allows an operational creditor to initiate CIRP

…

**Reasoning:** The Adjudicating Authority considered the invoices, prior civil suit decree, and the

…

**Interpretation:** Section 9 of the IBC is interpreted to provide a mechanism for operational

…

**Application:** In this case, the Corporate Debtor failed to pay for the wires and cables

…

## Parties

- **Judges:** R. Sucha…; B. Anil…
- **Respondents:** Fomra Sales…; Nangalwala…

## Timeline

- **1996-09-24 — Company Incor…**: Fomra Sales Private…
- **2014-01-01 — Civil Suit…**: Applicant/Operational Creditor filed a civil suit before the Hon'ble Additional District…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/fomra-sales-private-limited-iba-1115-2019-9bebb7f0