# In the matter of Grey Trunk Packaging Private Limited Company Petition No. (IB)-43(PB)-2021

> NCLT judgment dated 2021-05-03. Citation: TCN-2021-NCLT-02220. The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by M/s Nath…

- **Court:** NCLT
- **Order date:** 3 May 2021
- **Citation:** TCN-2021-NCLT-02220
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/grey-trunk-packaging-private-limited-company-petition-no-ib-43pb-2021-fad64aa8

## Summary

### Background

The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by M/s Nath Paper Private Limited (Operational Creditor) against M/s Grey Trunk Packaging Private Limited (Corporate Debtor) for initiation of Corporate Insolvency Resolution Process (CIRP) due to the Corporate Debtor's inability to liquidate its outstanding dues. The Corporate Debtor had placed purchase orders for Kraft Paper Reels, which the Petitioner supplied, but the Corporate Debtor defaulted on payments. The Petitioner had previously filed a recovery suit that was settled through mediation, where the Corporate Debtor agreed to pay Rs. 6,25,000 in five installments. The Corporate Debtor defaulted after making only three installments, leading the Petitioner to serve a demand notice

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## Facts

M/s Nath Paper Private Limited (Operational Creditor) filed a petition against M/s Grey Trunk Packaging Private Limited (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor had placed purchase orders for Kraft Paper Reels, which the Petitioner supplied. The Corporate Debtor defaulted on a payment of Rs. 6,38,320/-. The Petitioner had previously filed a recovery suit, which was settled through mediation, with the Corporate Debtor agreeing to pay Rs. 6,25,000/- in five installments. The Corporate Debtor defaulted after making only three installments. The Petitioner served a demand notice under Section 8 of the IBC, claiming Rs. 3,10,000/- including delayed

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## Issues and analysis

### Issue 1: Whether the insolvency petition is maintainable given that the default amount is less than the …

**Ratio:** The threshold limit for initiating insolvency proceedings is determined by the

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**Reasoning:** The court reasoned that the notification dated 24.03.2020 increased the minimum default

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**Interpretation:** The notification under Section 4 of the I&B Code sets the minimum threshold

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**Application:** The court applied the ratio to the facts by noting that the default amount was

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## Parties

- **Judges:** SH. B.S.V.…; Sh. Hemant Kumar…
- **Appellants:** M/s Nath Paper…
- **Respondents:** M/s. Grey Trunk…

## Timeline

- **2016-01-01 — Recovery Sui…**: The Petitioner filed a recovery suit before the Ld. ADJ, Saket Court, New Delhi, which…
- **2020-03-24 — Notification…**: The Central Government issued a notification enhancing the minimum default amount for…

## 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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