# In the matter of Karthik Roofings & Structurals Private Limited CP(IB) No. 345-BB-2019

> NCLT judgment dated 2019-11-22. Citation: TCN-2019-NCLT-00483. The case involves a petition filed by M/s. Cotmac Industrial Trading Private Limited…

- **Court:** NCLT
- **Order date:** 22 Nov 2019
- **Citation:** TCN-2019-NCLT-00483
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/karthik-roofings-structurals-private-limited-cpib-no-345-bb-2019-2a7c4f97

## Summary

### Background

The case involves a petition filed by M/s. Cotmac Industrial Trading Private Limited (Operational Creditor) under Section 9 of the IBC, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Karthik Roofings & Structurals Private Limited (Corporate Debtor). The Operational Creditor claimed that the Corporate Debtor defaulted on payments for supplied goods, amounting to Rs. 3,09,068, including interest. The Corporate Debtor had partially paid Rs. 4,08,068 out of the total claim of Rs. 6,33,654. The Operational Creditor issued a demand notice on April 26, 2019, which was received by the Corporate Debtor on May 3, 2019, but no communication disputing the demand was received.

## Facts

M/s. Cotmac Industrial Trading Private Limited (Operational Creditor) filed a petition under Section 9 of the IBC, 2016, to initiate CIRP against M/s. Karthik Roofings & Structurals Private Limited (Corporate Debtor) due to a default in payment. The Operational Creditor supplied wielding wire, Lincoln EM wire, and Lincoln Electric Saw to the Corporate Debtor between August 9, 2017, and September 7, 2017, under various invoices. The total amount payable was Rs. 6,33,654, but the Corporate Debtor paid only Rs. 4,08,068, leaving an outstanding amount of Rs. 2,25,000, excluding interest. A demand notice was issued on April 26, 2019, and received by the Corporate Debtor on May 3, 2019. The Corporate Debtor did not dispute the demand. The invoices, dating back to August

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## Issues and analysis

### Issue 1: Whether the petition filed by the Operational Creditor is for the purpose of recovering outstanding …

**Ratio:** The provisions of the Code cannot be invoked for mere money recovery. The primary

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**Reasoning:** The court observed that the petition appeared to be aimed at recovering the alleged

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**Interpretation:** The interpretation of the Code is that it is designed to address insolvency

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**Application:** The court applied this principle to the facts, concluding that the petition was

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## Parties

- **Judges:** Rajeswara Rao…; Ashutosh C…
- **Appellants:** M/s. Cotmac…
- **Respondents:** M/s. Karthik…; M/s. Karthik…

## Timeline

- **2017-08-09 — Supply of P…**: Operational Creditor supplied products to Corporate Debtor from August 9, 2017, to…
- **2017-09-07 — Supply of P…**: Operational Creditor supplied products to Corporate Debtor from August 9, 2017, to…

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