# In the matter of Khator Fibre and Fabrics Limited CP No. (IB)-239-9-JPR-2019

> NCLT judgment dated 2021-03-23. Citation: TCN-2021-NCLT-02595. Leomine Organics Private Limited, claiming to be an Operational Creditor, filed an application…

- **Court:** NCLT
- **Order date:** 23 Mar 2021
- **Citation:** TCN-2021-NCLT-02595
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/khator-fibre-and-fabrics-limited-cp-no-ib-239-9-jpr-2019-0fcf46d2

## Summary

### Background

Leomine Organics Private Limited, claiming to be an Operational Creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Khator Fibre and Fabrics Ltd., the Corporate Debtor. The applicant claimed that the corporate debtor failed to make payments for goods supplied from July 2016 to June 2019, resulting in a default. The application was filed through an authorized representative, Mr. Vishal Narandas Sejpal, authorized by a board resolution dated 03.09.2019.

## Facts

Leomine Organics Private Limited (Operational Creditor) supplied goods to Khator Fibre and Fabrics Ltd. (Corporate Debtor) from July 2016 to June 2019. The Corporate Debtor failed to make payment for invoices raised by the Applicant, amounting to Rs. 69,39,639.20. The first default occurred on 14.09.2016 and continued. The Applicant issued a demand notice dated 28.08.2019 demanding the outstanding amount, including interest. The Respondent did not reply to the demand notice or raise any dispute regarding the unpaid operational debt. The last payment was made on 17.08.2019. The Applicant filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of CIRP. The Respondent claimed to have made regular payments and that the

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## Issues and analysis

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

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

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**Reasoning:** The Adjudicating Authority found that the application in Form 5 was complete, no payment

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**Interpretation:** Section 9 requires the operational creditor to demonstrate that a debt is owed

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**Application:** In this case, the Adjudicating Authority determined that the application was

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## Parties

- **Judges:** Ajay Kumar…; RaghuNa…
- **Appellants:** Leomine Organics…
- **Respondents:** Khator Fibre and…

## Timeline

- **2016-07-01 — Supply of…**: Applicant supplied goods to the…
- **2016-09-14 — First De…**: The first default…

## 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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