# In the matter of H G S Diaries and Agro Limited IBA-898-2019

> NCLT judgment dated 2020-01-20. Citation: TCN-2020-NCLT-02269. The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 20 Jan 2020
- **Citation:** TCN-2020-NCLT-02269
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/h-g-s-diaries-and-agro-limited-iba-898-2019-96cd6e58

## Summary

### Background

The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by Jayapriya Fruits and Vegetables Commission Agent (Operational Creditor) against H G S Dairies and Agro Limited (Corporate Debtor) for initiation of Corporate Insolvency Resolution Process (CIRP). The application was filed due to the Corporate Debtor's default in paying an amount of ₹11,93,758/- with 18% interest as on 19.05.2019.

## Facts

Jayapriya Fruits and Vegetables Commission Agent (Operational Creditor) supplied fruits to H G S Dairies and Agro Limited (Corporate Debtor) between 05.04.2017 and 31.05.2018 for a total value of ₹29,31,660. The Corporate Debtor made a partial payment of ₹19,20,000, leaving a balance of ₹10,11,660 due from 01.06.2018. The Operational Creditor sent reminders and a demand notice on 20.05.2019, but the Corporate Debtor failed to make the payment. The Corporate Debtor's counsel filed a memo citing financial crisis as the reason for non-payment. The Corporate Debtor did not dispute the debt before the receipt of the demand notice. The outstanding debt as of 19.05.2019, including interest at 18%, amounted to ₹11,93,758.

## Issues and analysis

### Issue 1: Whether the Operational Creditor has proved the existence of debt and default on the part of the …

**Ratio:** The Insolvency and Bankruptcy Code, 2016 allows for the initiation of CIRP upon the

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**Reasoning:** The Tribunal observed that the Corporate Debtor did not deny the operational debt and had

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**Interpretation:** The legal principle requires the Operational Creditor to provide sufficient

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**Application:** In this case, the Operational Creditor provided invoices, payment records, and

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## Parties

- **Judges:** B.S.V. Prakash…; S. VIJAYARA…
- **Appellants:** Jayapriya Fruits…
- **Respondents:** H G S Dairies and…
- **Advocates:** M. Nandha…; Mukund…; +1 more

## Timeline

- **2017-04-05 — Start of Frui…**: Operational Creditor started…
- **2018-05-31 — End of Fruit…**: Operational Creditor completed…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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