# In the matter of JV Strips Ltd. & Ors. (IB) 452 (ND)-2017

> NCLT judgment dated 2018-04-13. Citation: TCN-2018-NCLT-01551. Power2sme Pvt. Ltd. filed a petition against JV Strips Ltd. under Section 9 of the Insolvency…

- **Court:** NCLT
- **Order date:** 13 Apr 2018
- **Citation:** TCN-2018-NCLT-01551
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jv-strips-ltd-ors-ib-452-nd-2017-ba1df6cb

## Summary

### Background

Power2sme Pvt. Ltd. filed a petition against JV Strips Ltd. under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against the Respondent, JV Strips Ltd. The Operational Creditor, Power2sme Pvt. Ltd., claimed that it had supplied goods to the Corporate Debtor between September 2015 and August 2017, leading to a significant overdue amount. To address this, both parties entered into a Memorandum of Understanding (MOU) on 2017-05-11, where the Corporate Debtor acknowledged the outstanding liability. A repayment schedule was agreed upon, and the Operational Creditor agreed to supply material on 90% credit, adjusting 10% towards previous dues. The MOU was later amended on 2017-08-04, extending

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## Facts

Power2sme Pvt. Ltd. (Operational Creditor) supplied goods to JV Strips Ltd. (Corporate Debtor) from September 2015 to August 2017, resulting in a significant overdue amount. On 2017-05-11, both parties entered into a Memorandum of Understanding (MOU), where JV Strips Ltd. acknowledged an outstanding liability of Rs. 10,23,67,915. The MOU included a repayment schedule and an agreement for Power2sme Pvt. Ltd. to supply material on 90% credit, adjusting 10% towards previous dues. The MOU was amended on 2017-08-04, extending the compliance period. JV Strips Ltd. issued two cheques totaling Rs. 9.15 crores, which were later dishonored. Power2sme Pvt. Ltd. terminated the arrangement on 2017-09-13. JV Strips Ltd. argued that the interest levied was exorbitant and violated the

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## Issues and analysis

### Issue 1: Whether the disputes raised by the Corporate Debtor are sufficient to reject the prayer made by the …

**Ratio:** The Adjudicating Authority should not reject the Operational Creditor's prayer if the

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**Reasoning:** The NCLT found that the Corporate Debtor had acknowledged the outstanding liability in

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**Interpretation:** The IBC aims to resolve insolvency in a timely manner. Disputes must be genuine

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**Application:** The NCLT applied the principle that a mere dispute is insufficient to reject

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## Parties

- **Judges:** Ina Mal…; Deepa Kr…; +1 more
- **Appellants:** Power2SME Pvt.…
- **Respondents:** JV Strips…
- **Advocates:** Hashmat…; Kusum P…; +2 more

## Timeline

- **2015-09-01 — Supply of Good…**: Power2sme Pvt. Ltd. started…
- **2017-05-11 — MOU Sign…**: Power2sme Pvt. Ltd. and JV Strips Ltd. entered…

## 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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