# In the matter of Hema Engineering Industries Limited IB-900(ND)-2020

> NCLT judgment dated 2021-04-05. Citation: TCN-2021-NCLT-02480. The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code…

- **Court:** NCLT
- **Order date:** 5 Apr 2021
- **Citation:** TCN-2021-NCLT-02480
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/hema-engineering-industries-limited-ib-900nd-2020-0b15b039

## Summary

### Background

The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, by P.R Rolling Mills Private Limited (Operational Creditor) against Hema Engineering Industries Limited (Corporate Debtor) to initiate the Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed a total debt of Rs. 4,73,33,795/- due as of 28.11.2019 for goods supplied. The Corporate Debtor initially made regular payments but later defaulted, leading to bounced cheques and unpaid invoices. The Operational Creditor issued a demand notice on 12.02.2020, which was not replied to by the Corporate Debtor.

## Facts

P.R Rolling Mills Private Limited (Operational Creditor) supplied goods ('Flat C-45') to Hema Engineering Industries Limited (Corporate Debtor) starting in June 2019. The initial payment term was 45 days from the invoice date, later extended to 60 days at the Corporate Debtor's request. The Corporate Debtor initially made regular payments via cheques and RTGS, adjusted using the FIFO method. However, payments were delayed and eventually stopped for invoices from 28.09.2019 to 28.11.2019, totaling Rs. 4,73,33,795/-. Some issued cheques bounced. The Operational Creditor issued a demand notice on 12.02.2020, claiming the amount, but received no reply. The Corporate Debtor claimed a genuine dispute and solvency, arguing that insolvency proceedings would harm its business.

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor under Section 9 of the IBC, 2016 is …

**Ratio:** Section 9 of the IBC, 2016 allows an operational creditor to initiate CIRP against a

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**Reasoning:** The court found that the Operational Creditor had provided sufficient evidence, including

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**Interpretation:** Section 9 provides a mechanism for operational creditors to recover their dues

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**Application:** The court applied Section 9 to the facts of the case, finding that the

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## Parties

- **Judges:** CH. MOHD SHARIEF…; Narender Kumar…
- **Appellants:** M/s. P.R Rolling…
- **Respondents:** M/s. Hema…
- **Advocates:** Nivedita R.…; Rachat S…; +1 more

## Timeline

- **2019-06-01 — Corporate Debtor…**: The Corporate Debtor approached the Operational Creditor for purchasing the product 'Flat…
- **2019-09-28 — Period of unpaid…**: The period from 28.09.2019 to 28.11.2019 during which the Corporate Debtor failed to pay…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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