# In the matter of Hindustan Paper Corporate Ltd. IB-273-(ND)-2018

> NCLT judgment dated 2018-06-13. Citation: TCN-2018-NCLT-01283. The petitioner, Universal Bamboo, an operational creditor, initiated insolvency proceedings…

- **Court:** NCLT
- **Order date:** 13 Jun 2018
- **Citation:** TCN-2018-NCLT-01283
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/hindustan-paper-corporate-ltd-ib-273-nd-2018-a112d50a

## Summary

### Background

The petitioner, Universal Bamboo, an operational creditor, initiated insolvency proceedings against Hindustan Paper Corporate Ltd., the corporate debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, due to the corporate debtor's inability to liquidate outstanding dues. The corporate debtor had issued a letter of intent in September 2016, followed by a purchase order for the supply of bamboo. The operational creditor supplied the bamboo and raised invoices. Despite acknowledging its liability, the corporate debtor failed to remit the amounts due. The operational creditor issued a demand notice, to which the corporate debtor responded by requesting the creditor not to initiate steps as they were in the process of revival.

## Facts

Universal Bamboo, an operational creditor, supplied bamboo to Hindustan Paper Corporate Ltd., the corporate debtor, based on a purchase order issued in September 2016. Two invoices were raised on 2016-11-02, totaling Rs. 53,72,133. A penalty of Rs. 99,121 was levied due to a shortfall in weight. The operational creditor requested payment of Rs. 52,73,012 along with a refund of a Rs. 2 lakh security deposit, totaling Rs. 54,73,012. The corporate debtor acknowledged its liability in a letter dated 2017-06-09 but failed to remit the amount. A demand notice was issued on 2017-10-31. The corporate debtor requested the operational creditor not to initiate steps, citing ongoing revival efforts. The petition was filed by M/s. Universal Bamboo, a sole proprietorship, not in the

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## Issues and analysis

### Issue 1: Whether the petition filed by M/s. Universal Bamboo, a sole proprietorship, instead of its …

**Ratio:** A petition under the IBC must be filed by a legally recognized entity. A sole

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**Reasoning:** The court reasoned that the petition was filed in the name of the firm, M/s. Universal

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**Interpretation:** The IBC requires that legal proceedings be initiated by or against entities

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**Application:** In this case, the petition was filed by the firm, M/s. Universal Bamboo,

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## Parties

- **Judges:** Ina Mal…; Deepa Kr…; +1 more
- **Appellants:** Universal…
- **Respondents:** Hindustan Paper…

## Timeline

- **2016-09-01 — Letter of…**: Corporate Debtor issued…
- **2016-09-10 — Purchase…**: Purchase order placed…

## 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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