# Knitscraft Textile LLP vs. Ervika Global Private Limited

> NCLT judgment dated 2026-08-19. Citation: TCN-2026-NCLT-00846. Knitscraft Textile LLP (Operational Creditor) filed a petition under Section 9 of the…

- **Court:** NCLT
- **Order date:** 19 Aug 2026
- **Citation:** TCN-2026-NCLT-00846
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/knitscraft-textile-llp-vs-ervika-global-private-limited-6dccj

## Summary

### Background

Knitscraft Textile LLP (Operational Creditor) filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Ervika Global Private Limited (Corporate Debtor). The Operational Creditor claimed an outstanding operational debt of Rs. 1,65,47,709/- for the supply of garments, with no payment received after June 13, 2024. The Corporate Debtor disputed the claim, alleging the petition was a recovery proceeding, that the Operational Creditor failed to make agreed adjustments (2.5% of purchase order value and Rs.10 per piece for Myntra supplies), and that pre-existing disputes, including a criminal complaint, rendered the petition non-maintainable and the debt below the statutory threshold.

## Facts

Knitscraft Textile LLP (Operational Creditor) is engaged in the business of manufacturing and trading garments.

Ervika Global Private Limited (Corporate Debtor) approached the Operational Creditor in 2023 for the supply of garments/clothes for Myntra Jabong Private Limited/Flipkart.

The Operational Creditor supplied goods and raised tax invoices.

The Corporate Debtor made part payments but no payment was received after June 13, 2024.

An outstanding principal amount of Rs. 1,65,47,709/- plus contractual interest remained unpaid.

The Corporate Debtor issued cheques and executed a Memorandum of Understanding (MoU) dated September 24, 2024, acknowledging an outstanding amount of Rs. 1,07,15,312/-, subject to reconciliation.

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## Issues and analysis

### Issue 1: Whether there is an operational debt …

**Ratio:** The NCLT found undisputed facts regarding the existence of business transactions, supply

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**Reasoning:** The Corporate Debtor made part payments but failed to clear the outstanding operational

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**Interpretation:** The NCLT concluded that the existence of an operational debt and a default in

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**Application:** The facts presented, including purchase orders, invoices, ledger accounts, and

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## Parties

- **Judges:** Vinay…; Sh. Shishir…
- **Appellants:** KNITSCRAFT…
- **Respondents:** ERVIKA GLOBAL…
- **Other parties:** Sarvesh…; Mohammad…
- **Advocates:** Prateek…; Rachit R…

## Timeline

- **2023-2024 — Business Transactions…**: Corporate Debtor approached…
- **2024-06-13 — Last Payment…**: The Corporate Debtor made its last…

## 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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