# In the matter of Gehna Precious Metals Ltd. IB-32(ND)-2018

> NCLT judgment dated 2018-05-28. Citation: TCN-2018-NCLT-01365. This case involves a petition filed under Section 9 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 28 May 2018
- **Citation:** TCN-2018-NCLT-01365
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/gehna-precious-metals-ltd-ib-32nd-2018-e3ce01da

## Summary

### Background

This case involves a petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking the initiation of the Corporate Insolvency Resolution Process (CIRP) against Gehna Precious Metals Ltd. The Operational Creditor, SRS Limited, claims that the Corporate Debtor is unable to liquidate its debt. SRS Limited is in the business of wholesale and retail of gold and diamond jewellery. They supplied goods to Gehna Precious Metals Ltd. based on a memorandum of understanding dated 2009-10-28. Initially, the Corporate Debtor made timely payments but later defaulted, citing a Pan-India jewellers strike in March-April 2016 as a reason for not making remittances.

## Facts

SRS Limited, the Operational Creditor, is engaged in the wholesale and retail business of gold and diamond jewellery. Gehna Precious Metals Ltd., the Corporate Debtor, approached SRS Limited for the wholesale supply of manufactured goods. A memorandum of understanding was established on 2009-10-28. Initially, Gehna Precious Metals Ltd. made timely payments, but later defaulted. They cited a Pan-India jewellers strike during March-April 2016 as a reason for not making remittances. SRS Limited maintained a running account, and the last payment made by Gehna Precious Metals Ltd. was on 2017-05-11, amounting to Rs. 8,00,000/-. As per SRS Limited's accounts, Rs. 73,20,20,887/- is outstanding. SRS Limited sent letters dated 2017-06-12 and 2017-08-18 demanding the outstanding

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## Issues and analysis

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

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016 allows an operational creditor to

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**Reasoning:** The court considered the petition filed by the Operational Creditor and found that it was

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**Interpretation:** Section 9 provides the framework for operational creditors to initiate CIRP,

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**Application:** The court determined that the petition was maintainable as it met the

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## Parties

- **Judges:** Ina Mal…; DeepaKr…
- **Appellants:** SRS Lim…
- **Respondents:** Gehna Precious…

## Timeline

- **2009-10-28 — Memorandum of…**: A memorandum of understanding was established between SRS Limited and Gehna Precious…
- **2016-03-01 — Pan-India Jewellers…**: A Pan-India jewellers strike occurred during March-April 2016, which Gehna Precious…

## 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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