# In the matter of KAC Yarn Private Limited CP-599-(IB)-CB-2017

> NCLT judgment dated 2017-11-21. Citation: TCN-2017-NCLT-00160. The case originates from an application filed under Section 9 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 21 Nov 2017
- **Citation:** TCN-2017-NCLT-00160
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kac-yarn-private-limited-cp-599-ib-cb-2017-1b890e8c

## Summary

### Background

The case originates from an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by an Operational Creditor against a Corporate Debtor. The Operational Creditor sought to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, declare a moratorium, and appoint an Interim Resolution Professional (IRP). The Operational Creditor claimed that the Corporate Debtor defaulted on payments for goods supplied.

## Facts

M/s. Vishnu Sudha Textiles (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against M/s. KAC Yarn Private Limited (Corporate Debtor). The Operational Creditor claimed that they supplied Polyester Staples Fibre to the Corporate Debtor between 2015-07-10 and 2015-09-04, as evidenced by invoices. The payments for these supplies were due within 10 days of sale, but the Corporate Debtor defaulted. The Operational Creditor claimed Rs. 50,29,864/- along with interest. The Operational Creditor issued a notice under Section 8 of the I&B Code, 2016, which was delivered to the Corporate Debtor. In response, the Corporate Debtor claimed the supplied products were defective and did not match specifications, and that there

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## Issues and analysis

### Issue 1: Whether the Operational Creditor has met the requirements for the admission of an application under …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016, outlines the requirements for an

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**Reasoning:** The court reasoned that the Operational Creditor had provided sufficient evidence,

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**Interpretation:** Section 9 is interpreted to mean that if an operational creditor can provide

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**Application:** In this case, the Operational Creditor provided invoices, delivery reports, and

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## Parties

- **Judges:** Ch. Mohd Sharief…; S. VIJAYARA…
- **Appellants:** M/s. Vishnu Sudha…
- **Respondents:** M/s. KAC Yarn…

## Timeline

- **2015-07-10 — Supply of…**: Operational Creditor started supplying…
- **2015-09-04 — End of S…**: Operational Creditor completed the supply of Polyester Staples Fibre to the Corporate…

## 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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