# In the matter of J J Solvex Private Limited CP (IB) No.223-Chd-Pb-2019

> NCLT judgment dated 2020-02-10. Citation: TCN-2020-NCLT-02014. Shri Vardhman Rice Mills Private Limited, the operational creditor, filed a petition under…

- **Court:** NCLT
- **Order date:** 10 Feb 2020
- **Citation:** TCN-2020-NCLT-02014
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/j-j-solvex-private-limited-cp-ib-no223-chd-pb-2019-d611d2a1

## Summary

### Background

Shri Vardhman Rice Mills Private Limited, the operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against J J Solvex Private Limited, the corporate debtor, due to unpaid operational debt related to the supply of paddy. The operational creditor claimed a total default of ₹6,96,985/-, including principal and interest. The corporate debtor acknowledged the transactions but cited liquidity issues as the reason for non-payment. The Adjudicating Authority considered whether the demand notice was properly served and whether there was any pre-existing dispute.

## Facts

Shri Vardhman Rice Mills Private Limited (Operational Creditor) supplied Paddy to J J Solvex Private Limited (Corporate Debtor) between 2017-06-24 and 2017-06-27, raising invoices accordingly. The principal amount outstanding was ₹5,72,532/-. The debt fell due 14 days from the invoice date. A demand notice in Form No.3 dated 2018-10-01 was served upon the Corporate Debtor. The total amount claimed to be in default was ₹6,96,985/-, inclusive of ₹1,24,453/- as interest at 18%. The Corporate Debtor replied to the demand notice on 2018-10-26, admitting the transactions but stating its inability to clear the debt due to a liquidity crunch. The Corporate Debtor did not dispute the liability towards the operational creditor. The operational creditor proposed Mr. Vishawjeet

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## Issues and analysis

### Issue 1: Whether the demand notice in Form No.3 …

**Ratio:** The demand notice must be served at the correct address as per the master data of the

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**Reasoning:** The demand notice dated 2018-10-01 was sent to the address as per the master data of the

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**Interpretation:** Proper service of the demand notice is a prerequisite for initiating CIRP under

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**Application:** The demand notice was sent to the correct address, and the Corporate Debtor

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## Parties

- **Judges:** Ajay Kumar…; Pradeep R.…
- **Appellants:** Vardhman Rice…
- **Respondents:** J J Solvex…

## Timeline

- **2017-06-24 — Supply of…**: Shri Vardhman Rice Mills Private Limited supplied Paddy to J J Solvex Private Limited…
- **2018-10-01 — Demand Notice…**: A demand notice in Form No.3 was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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