# In the matter of Kumararaja Paper Private Limited IBA-189-2020

> NCLT judgment dated 2021-03-04. Citation: TCN-2021-NCLT-02821. This case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 4 Mar 2021
- **Citation:** TCN-2021-NCLT-02821
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kumararaja-paper-private-limited-iba-189-2020-617298c1

## Summary

### Background

This case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by M/s. Arjun Chemicals Private Limited (Operational Creditor) to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Kumararaja Paper Mill Private Limited (Corporate Debtor). The Operational Creditor claimed a sum of Rs.2,48,792/- and interest of Rs.1,08,261/- due from the Corporate Debtor. The Corporate Debtor failed to make payments for the supplied chemicals and also failed to return two dozing pumps owned by the Operational Creditor. A demand notice under Section 8 of IBC, 2016 was sent to the Corporate Debtor, but no reply was received.

## Facts

M/s. Arjun Chemicals Private Limited (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Kumararaja Paper Mill Private Limited (Corporate Debtor). The Operational Creditor claimed that the Corporate Debtor defaulted in making payments for the supply of composize – cationic rosin dispersion in plastic barrels. The Operational Creditor supplied the chemicals based on a Purchase Order dated 22.03.2017 and raised an invoice for Rs.1,08,261/- on 25.03.2017. The total amount claimed was Rs.2,48,792/- along with interest of Rs.1,08,261/-. The Corporate Debtor issued cheques that were returned due to insufficient funds. The Corporate Debtor also failed

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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(5) of the IBC, 2016, provides the conditions under which an application by an

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**Reasoning:** The Tribunal considered the documents filed by the Operational Creditor, including

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**Interpretation:** Section 9 of the IBC, 2016, allows an operational creditor to initiate CIRP

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**Application:** The Tribunal found that the Operational Creditor had established the existence

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## Parties

- **Judges:** R. VARADH…; Anil Ku…
- **Appellants:** M/s. Arjun…
- **Respondents:** M/s. Kumararaja…

## Timeline

- **2017-03-22 — Purchase Ord…**: Purchase Order issued by Corporate…
- **2017-03-25 — Invoice…**: Invoice raised by Operational…

## 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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