# In the matter of Harshavardhan Cotton & Synthetics Pvt. Ltd. CP-104-(IB)-CB-2018

> NCLT judgment dated 2018-03-12. Citation: TCN-2018-NCLT-01726. The case involves an application filed by Bhadresh Trading Corporation Ltd. (Operational…

- **Court:** NCLT
- **Order date:** 12 Mar 2018
- **Citation:** TCN-2018-NCLT-01726
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/harshavardhan-cotton-synthetics-pvt-ltd-cp-104-ib-cb-2018-6ae1f22d

## Summary

### Background

The case involves an application filed by Bhadresh Trading Corporation Ltd. (Operational Creditor) against Harshavardhan Cotton & Synthetics Pvt. Ltd. (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The Operational Creditor claimed an outstanding debt of Rs. 1,31,68,654/- arising from sale and purchase transactions of cotton bales. The Corporate Debtor allegedly failed to pay the due amount. The Operational Creditor issued a demand notice dated 17.11.2017 under Section 8(1) of the I&B Code, 2016. The Corporate Debtor denied the correctness of the entries in the statement of account but expressed willingness to reconcile the accounts.

## Facts

Bhadresh Trading Corporation Ltd. (Operational Creditor) filed an application against Harshavardhan Cotton & Synthetics Pvt. Ltd. (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016. The claim arose from unpaid dues of Rs. 1,31,68,654/- related to sale and purchase transactions of cotton bales. A running account was maintained by the Operational Creditor. The Operational Creditor issued a demand notice dated 17.11.2017 under Section 8(1) of the I&B Code, 2016. The Corporate Debtor denied the correctness of the entries in the statement of account but expressed willingness to reconcile the accounts. The Corporate Debtor's counsel sought time for instructions but later stated the client was unresponsive. The Operational Creditor complied

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## Issues and analysis

### Issue 1: Whether the Operational Creditor has met the requirements for the admission of the application …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016, read with Rule 6 of the Insolvency

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**Reasoning:** The court observed that the Operational Creditor had issued a demand notice under Section

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**Interpretation:** Section 9 of the IBC is interpreted to mean that an application can be admitted

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**Application:** The court applied the ratio to the facts of the case, finding that the

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## Parties

- **Judges:** Ch. Mohd Sharief…
- **Appellants:** Bhadresh Trading…
- **Respondents:** Harshavardhan…

## Timeline

- **2017-11-17 — Demand Notice…**: The Operational Creditor issued a Demand Notice to the Corporate Debtor under Section…
- **2017-12-27 — Chartered Accountant…**: A certificate issued by a Chartered Accountant stated that no payment had been received…

## 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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