# In the matter of Khati Design Private Limited Company Petition No. (IB)-166-9-JPR-2019

> NCLT judgment dated 2019-09-27. Citation: TCN-2019-NCLT-01198. Sahil Agarwal, an operational creditor, filed an application under Section 9 of the Insolvency…

- **Court:** NCLT
- **Order date:** 27 Sept 2019
- **Citation:** TCN-2019-NCLT-01198
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/khati-design-private-limited-company-petition-no-ib-166-9-jpr-2019-65f571c0

## Summary

### Background

Sahil Agarwal, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Khati Design Private Limited, the corporate debtor, for initiation of the Corporate Insolvency Resolution Process (CIRP). The applicant claimed that the corporate debtor defaulted on a payment of Rs. 4,50,000/- excluding interest for services rendered related to website and social media development. The applicant issued a notice under Section 8 of the IBC, 2016, which the corporate debtor received but did not reply to or dispute. The corporate debtor acknowledged its inability to repay the debt due to a lack of liquid funds.

## Facts

Sahil Agarwal, an individual and expert in software and product development, provided consultancy services to Khati Design Private Limited, a private limited company, for website and social media development. On 24.10.2018, a representative of Khati Design, Mr. Banwari Lal Kumawat, sought advice from Sahil Agarwal. Sahil Agarwal provided consultancy and raised an invoice dated 25.09.2018 for Rs. 4,50,000/- to be cleared within 15 days. The invoice was not paid. Sahil Agarwal issued a notice under Section 8 of the Insolvency and Bankruptcy Code, 2016, on 04.04.2019, demanding payment of Rs. 4,50,000/- excluding interest @ 12% p.a. The notice was received by Khati Design on 10.04.2019 and also sent via email on 21.04.2019 and 22.04.2019. Khati Design did not reply to the

…

## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in making …

**Ratio:** The Insolvency and Bankruptcy Code, 2016, defines 'default' as non-payment of debt when

…

**Reasoning:** The Corporate Debtor admitted its inability to pay the debt due to a lack of liquid

…

**Interpretation:** The admission by the Corporate Debtor, coupled with the evidence provided by

…

**Application:** The Corporate Debtor's admission of its inability to pay the debt, along with

…

## Parties

- **Judges:** POONDLA BHASKARA…; RaghuNa…
- **Appellants:** Sahil Ag…
- **Respondents:** KHATI DESIGNS…
- **Advocates:** Sandeep T…; Puneet Mahe…; +1 more

## Timeline

- **2018-10-10 — Date of D…**: The Corporate Debtor…
- **2018-09-25 — Invoice…**: Applicant raised an…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/khati-design-private-limited-company-petition-no-ib-166-9-jpr-2019-65f571c0