# In the matter of J.R. Furnace and Ovens Private Limited IBA-789-2019

> NCLT judgment dated 2019-11-26. Citation: TCN-2019-NCLT-00437. The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 26 Nov 2019
- **Citation:** TCN-2019-NCLT-00437
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jr-furnace-and-ovens-private-limited-iba-789-2019-1394ac42

## Summary

### Background

The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by Motovario Gear Solutions Pvt. Ltd. (Operational Creditor) against J.R. Furnace and Ovens Private Limited (Corporate Debtor) for default in payment of operational debt. The Operational Creditor supplied Geared Motors to the Corporate Debtor, who placed three purchase orders. A credit limit facility of 45 days was extended with an agreed interest of 18% p.a. for delayed payments. The Operational Creditor raised four tax invoices, but the Corporate Debtor failed to make the payments.

## Facts

Motovario Gear Solutions Pvt. Ltd. (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against J.R. Furnace and Ovens Private Limited (Corporate Debtor) due to unpaid operational debt. The Corporate Debtor engaged the Operational Creditor for the supply of Geared Motors and placed three purchase orders. The Operational Creditor extended a 45-day credit limit with an 18% p.a. interest clause for delayed payments. Four tax invoices were raised, totaling ₹6,59,162/-, including principal and interest. A cheque issued by the Corporate Debtor for ₹2,72,777/- was returned with the endorsement "Exceeds Arrangement". A legal notice was issued on 06.04.2019, but the Corporate Debtor did not respond. A demand notice

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor under Section 9 of the Insolvency and …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016 allows an operational creditor to

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**Reasoning:** The Tribunal considered the facts presented, including the invoices, demand notice, and

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

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**Application:** The Tribunal found that the Operational Creditor had met all the requirements

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## Parties

- **Judges:** R. VARADH…; Anil Ku…
- **Appellants:** MOTOVARIO GEAR…
- **Respondents:** J.R. Furnace and…
- **Advocates:** G. Sai…

## Timeline

- **2019-01-01 — Invoice…**: Invoices were raised by the Operational Creditor…
- **2019-02-15 — Cheque Issu…**: Corporate Debtor issued a cheque for…

## 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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