# In the matter of Inmark Retail Private Limited C.P. (IB) No. 415-BB-2019

> NCLT judgment dated 2020-06-02. Citation: TCN-2020-NCLT-01265. Trend Arrest Clothing Private Limited filed a petition under Section 9 of the IBC, 2016,…

- **Court:** NCLT
- **Order date:** 2 Jun 2020
- **Citation:** TCN-2020-NCLT-01265
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/inmark-retail-private-limited-cp-ib-no-415-bb-2019-40cea774

## Summary

### Background

Trend Arrest Clothing Private Limited filed a petition under Section 9 of the IBC, 2016, against Inmark Retail Private Limited, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The operational creditor claimed that the corporate debtor defaulted on a total outstanding amount of Rs. 35,91,740/-. The operational creditor supplied readymade garments and accessories to the corporate debtor between 18.08.2017 and 24.12.2018. The corporate debtor made some payments but failed to pay the balance amount of Rs. 30,62,075/- and interest of Rs. 5,29,664/-. The operational creditor issued a demand notice under Section 8 of the I&B Code, 2016, on 11.07.2019, but received no reply or payment. The corporate debtor claimed that the dues were under dispute and

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## Facts

Trend Arrest Clothing Private Limited (Operational Creditor) supplied readymade garments and accessories to Inmark Retail Private Limited (Corporate Debtor) between 18.08.2017 and 24.12.2018. The Corporate Debtor failed to pay Rs. 30,62,075/- of the principal amount and Rs. 5,29,664/- as interest, totaling Rs. 35,91,740/-. The Operational Creditor issued a demand notice on 11.07.2019 under Section 8 of the I&B Code, 2016. The Corporate Debtor admitted liability in email communications dated 26.03.2019 and 04.04.2019, proposing a payment plan. The Corporate Debtor claimed that goods worth Rs. 14,97,085/- were ready for return, reducing the actual dues to Rs. 15,64,990/-. The Corporate Debtor cited a liquidity crisis and restructuring efforts with banks, including a

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted on the payment of operational debt to the Operational …

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

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**Reasoning:** The NCLT found that the Corporate Debtor failed to make full payment for the goods

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**Interpretation:** The failure to pay the outstanding amount constitutes a default under the IBC,

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**Application:** The Corporate Debtor's failure to pay the outstanding amount of Rs.

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## Parties

- **Judges:** Rajeswara Rao…; Ashutosh C…
- **Appellants:** Trend Arrest…
- **Respondents:** Inmark Retail…
- **Advocates:** Ashwi…; Vinayak…

## Timeline

- **2017-08-18 — Supply of…**: Operational Creditor supplied readymade…
- **2018-12-24 — End of Supply…**: Last date of supply of goods by the…

## 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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