# In the matter of Krishna Ferro Products Ltd. CP (IB) No. 23-CTB-2019

> NCLT judgment dated 2019-10-04. Citation: TCN-2019-NCLT-01089. The case involves an application filed by M/s Suraj Products Limited, an operational creditor,…

- **Court:** NCLT
- **Order date:** 4 Oct 2019
- **Citation:** TCN-2019-NCLT-01089
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/krishna-ferro-products-ltd-cp-ib-no-23-ctb-2019-04a0b8e0

## Summary

### Background

The case involves an application filed by M/s Suraj Products Limited, an operational creditor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Krishna Ferro Products Ltd., the corporate debtor. The operational creditor claimed that the corporate debtor failed to honor purchase orders for 'casting items' and a cheque issued for refund bounced. The application was initially dismissed for non-prosecution but was later restored upon a Misc. Application.

## Facts

M/s Suraj Products Limited, the operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against M/s Krishna Ferro Products Ltd., the corporate debtor. The operational creditor is in the business of distribution and supplying cements. The corporate debtor was to supply 'casting items' for parquetting, MBF & DRI Plant. By Purchase Order dated 2018-05-21, the operational creditor placed orders worth Rs. 1,53,08,000, out of which materials worth Rs. 80,12,296 were not supplied. The corporate debtor issued a cheque for refund, which bounced. A notice under Section 8 of the IBC was issued on 2019-02-11, but the corporate debtor did not repay. The corporate debtor issued Cheque No. 263369, dated 2012-10-20,

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## Issues and analysis

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

**Ratio:** The Insolvency and Bankruptcy Code, 2016, allows an operational creditor to initiate CIRP

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**Reasoning:** The Adjudicating Authority considered the documents and submissions, including the

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**Interpretation:** Section 9 of the IBC, read with Section 8, provides a mechanism for operational

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**Application:** The ratio and reasoning were applied to the facts, where the corporate debtor

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## Parties

- **Judges:** Sucharit…; Satya Ranjan…
- **Appellants:** Suraj Products…
- **Respondents:** Krishna Ferro…
- **Advocates:** Arani…; Minu Ro…

## Timeline

- **2012-10-20 — Cheque I…**: Corporate Debtor issued Cheque…
- **2016-10-14 — Applicant Asks for…**: Applicant asked 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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