# In the matter of Indiranagar Chit Fund and Trading Co. Pvt. Ltd. C.P. (IB) No. 322-BB-2019

> NCLT judgment dated 2020-01-28. Citation: TCN-2020-NCLT-02151. Rajendra P. filed C.P.(IB)No.322/BB/2019 against M/s. Indiranagar Chit Funds & Trading Company…

- **Court:** NCLT
- **Order date:** 28 Jan 2020
- **Citation:** TCN-2020-NCLT-02151
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/indiranagar-chit-fund-and-trading-co-pvt-ltd-cp-ib-no-322-bb-2019-4300d7e9

## Summary

### Background

Rajendra P. filed C.P.(IB)No.322/BB/2019 against M/s. Indiranagar Chit Funds & Trading Company Private Limited under Section 9 of the IBC, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The petitioner, an operational creditor, claimed default on the part of the corporate debtor for a total amount of Rs. 20,02,250/- as of 10.04.2017. The petitioner had subscribed to chit agreements with the corporate debtor, and despite the maturity of the agreements and demand letters, the corporate debtor failed to repay the due amount.

## Facts

Rajendra P., the petitioner and operational creditor, subscribed to chit agreements with M/s. Indiranagar Chit Funds & Trading Company Private Limited, the corporate debtor. Two chit agreements were entered on 06/09/2015 and 02/06/2016 for sums of Rs. 10 Lakhs and Rs. 25 Lakhs, respectively. The corporate debtor defaulted on payments, leading to a total outstanding amount of Rs. 20,02,250/- as of 10/04/2017. The petitioner sent demand letters on 05/10/2018 and 17/12/2018, and a final demand notice on 30/04/2019, which was acknowledged by the corporate debtor on 02/05/2019. The corporate debtor admitted to the debt and default. The corporate debtor's offices and accounts were frozen by the Indiranagar police and GST. The corporate debtor has no movable or immovable

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## Issues and analysis

### Issue 1: Whether the debt and default are established under Section 9 of the IBC, 2016, to initiate the …

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

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**Reasoning:** The NCLT observed that the debt and default were not in dispute, and the respondent

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

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**Application:** In this case, the petitioner provided evidence of the debt and default, and the

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## Parties

- **Judges:** Rajeswara Rao…; Ashutosh C…
- **Appellants:** Rajend…
- **Respondents:** M/s.Indiranagar…

## Timeline

- **1976-01-01 — Company Regis…**: Indiranagar Chit Funds and Trading Company…
- **2015-09-06 — Chit Agree…**: Rajendra P. entered into a chit…

## 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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