# In the matter of Hwashin Industries Private Limited Company Petition No.(IB)239-ALD-2018

> NCLT judgment dated 2019-01-10. Citation: TCN-2019-NCLT-05275. K.B. Tradexim Pvt. Ltd., the operational creditor, filed a petition under Section 9 of the…

- **Court:** NCLT
- **Order date:** 10 Jan 2019
- **Citation:** TCN-2019-NCLT-05275
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/hwashin-industries-private-limited-company-petition-noib239-ald-2018-383c1fa9

## Summary

### Background

K.B. Tradexim Pvt. Ltd., the operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, read with Rule 6 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Hwashin Industries Private Limited, the corporate debtor. The operational creditor claimed that the corporate debtor owed Rs. 21,37,704/- towards the cost of goods and various taxes, which was outstanding from 25.10.2017. The corporate debtor had made a partial payment of One Lakh but failed to discharge the remaining operational debt. The corporate debtor disputed the demand, raising concerns about the quality of goods supplied.

## Facts

K.B. Tradexim Pvt. Ltd. (operational creditor) claimed that Hwashin Industries Private Limited (corporate debtor) owed Rs. 21,37,704/- for goods/industrial chemicals/release agents supplied. The amount was outstanding from 2017-10-25. The corporate debtor made a partial payment of Rs. 1,00,000. The operational creditor issued a notice under Section 8 of the Insolvency and Bankruptcy Code on 2018-05-05. The corporate debtor replied, disputing the demand and raising quality issues for the first time on 2018-06-14. The operational creditor issued a rejoinder on 2018-07-07. The corporate debtor claimed financial hardship and offered to pay Rs. 75,000/- monthly. The operational creditor stated that the corporate debtor used the supplied raw materials without objection. The

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## Issues and analysis

### Issue 1: Whether the corporate debtor raised a valid dispute regarding the quality of goods supplied before …

**Ratio:** The Hon'ble Supreme Court in 'Mobilox Innovations Private Limited v/s Kirusa Software

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**Reasoning:** The adjudicating authority observed that the corporate debtor raised the issue of the

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**Interpretation:** The interpretation of Section 8 and the Supreme Court's ruling in Mobilox

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**Application:** In this case, the corporate debtor's claim regarding the quality of goods was

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## Parties

- **Judges:** BIKKI RAVEENDRA…; Saroj Ra…
- **Appellants:** K.B. TRADEXIM…
- **Respondents:** Hwashin Industries…

## Timeline

- **2017-10-25 — Debt Outst…**: The amount of Rs.…
- **2018-05-05 — Demand Notice…**: Operational creditor issued a demand…

## 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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