# In the matter of Kaarau Collection Pvt. Ltd. (IB) 1414(ND)-2018

> NCLT judgment dated 2019-01-24. Citation: TCN-2019-NCLT-05175. The case involves a petition filed under Section 9 of the Insolvency & Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 24 Jan 2019
- **Citation:** TCN-2019-NCLT-05175
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kaarau-collection-pvt-ltd-ib-1414nd-2018-640db561

## Summary

### Background

The case involves a petition filed under Section 9 of the Insolvency & Bankruptcy Code, 2016, by M/s. Ivory Hospitality Solutions (P) Ltd. (Operational Creditor) against M/s. Kaarau Collections Pvt. Ltd. (Corporate Debtor) for its inability to liquidate a debt of Rs. 2,73,523.67. The Operational Creditor claimed to have supplied fabric to the Corporate Debtor and maintained a running account. Despite repeated requests and reminders, the Corporate Debtor failed to liquidate the outstanding liability, leading to the issuance of a demand notice dated 2018-09-12 under Section 8 of the Code. The Corporate Debtor disputed the liability, claiming no outstanding dues and seeking to recover amounts from the Operational Creditor based on two debit notes.

## Facts

M/s. Ivory Hospitality Solutions (P) Ltd. (Operational Creditor) filed a petition against M/s. Kaarau Collections Pvt. Ltd. (Corporate Debtor) under Section 9 of the Insolvency & Bankruptcy Code, 2016, claiming a debt of Rs. 2,73,523.67. The Operational Creditor stated that they supplied fabric to the Corporate Debtor and maintained a running account. The Corporate Debtor allegedly failed to liquidate the outstanding liability despite repeated requests, leading to a demand notice issued on 2018-09-12. The Corporate Debtor disputed the liability, claiming no outstanding dues and presenting two debit notes. The Operational Creditor argued that one debit note was acknowledged for the return of 467 meters of fabric, and the second debit note, dated 2017-06-30, for 1742

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## Issues and analysis

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

**Ratio:** A petition under Section 9 of the IBC is maintainable if there is a debt and default, and

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**Reasoning:** The court found that the Operational Creditor had demonstrated a debt and default by the

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

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**Application:** The court applied the ratio to the facts, noting that the Corporate Debtor's

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## Parties

- **Judges:** Ina Mal…; V.K. SUB…
- **Appellants:** M/s. Ivory…
- **Respondents:** M/s. Kaarau…

## Timeline

- **2018-09-12 — Demand Notice…**: Operational Creditor issued a demand notice to the Corporate Debtor under Section 8 of…
- **2019-01-24 — Order Del…**: The NCLT admitted the petition and initiated the Corporate Insolvency Resolution Process…

## 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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