# In the matter of Lemon Electronics Limited Company Petition No. IB-394-ND-2019

> NCLT judgment dated 2020-02-27. Citation: TCN-2020-NCLT-01774. Fine Group Corporation Limited filed an application under Section 9 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 27 Feb 2020
- **Citation:** TCN-2020-NCLT-01774
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/lemon-electronics-limited-company-petition-no-ib-394-nd-2019-0e1cef99

## Summary

### Background

Fine Group Corporation Limited filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Lemon Electronics Limited, alleging default in payment for goods supplied. Fine Group claimed that Lemon Electronics failed to pay an outstanding amount of $505506.48 USD (INR Rs.3,53,85,453.60). Lemon Electronics contested the application, claiming a pre-existing dispute regarding the quality and timely delivery of the goods and denying the receipt of invoices.

## Facts

Fine Group Corporation Limited, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Lemon Electronics Limited, the corporate debtor, for an outstanding debt of $505506.48 USD (INR Rs.3,53,85,453.60). Fine Group claimed that Lemon Electronics had placed six purchase orders between 06.08.2018 and 27.09.2018 for specific products, which were duly supplied. Lemon Electronics allegedly confirmed the receipt of goods and assured payment. However, Lemon Electronics failed to make the payment despite reminders. Fine Group issued a demand notice dated 10.12.2018. Lemon Electronics replied on 26.12.2018, denying liability and claiming a pre-existing dispute regarding the quality and timely delivery of the goods.

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## Issues and analysis

### Issue 1: Whether the application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, is …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016, allows an operational creditor to

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**Reasoning:** The NCLT found that the application was complete and met the requirements of Section 9 of

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**Interpretation:** Section 9 provides the mechanism for operational creditors to initiate

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**Application:** The NCLT determined that the application was filed in the prescribed format

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## Parties

- **Judges:** DEEΡΤΙ M…; HEMANT KUMAR…
- **Appellants:** Fine Group…
- **Respondents:** Lemon Electronics…

## Timeline

- **2018-08-06 — Purchase Order…**: The corporate debtor placed 6 Purchase orders between 06.08.2018 to 27.09.2018 for…
- **2018-09-12 — Date of D…**: The date of default is…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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