# In the matter of Lifeline Services Pvt. Ltd. & Ors. (IB)-578(ND)-2017

> NCLT judgment dated 2018-01-19. Citation: TCN-2018-NCLT-01917. Jhunsons Chemicals filed an application under Section 9 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 19 Jan 2018
- **Citation:** TCN-2018-NCLT-01917
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/lifeline-services-pvt-ltd-ors-ib-578nd-2017-e394400d

## Summary

### Background

Jhunsons Chemicals filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against Lifeline Services Pvt. Ltd. & Ors, the Corporate Debtor, due to their inability to liquidate an operational debt. Jhunsons Chemicals, the Operational Creditor, claimed that Lifeline Services had outstanding payments of Rs. 5,72,894/- despite repeated requests. An earlier CIRP petition (No. 198(ND)/2017) was withdrawn after the Corporate Debtor acknowledged its liability and issued two post-dated cheques for Rs. 5,73,894/- and Rs. 87,000/-. However, one of the cheques for Rs. 5,73,894/- was dishonored on 03.10.2017.

## Facts

Jhunsons Chemicals, the Operational Creditor, is a company engaged in manufacturing PVC compounds, granules, mouldings, and lacquers. They supplied goods to Lifeline Services Pvt. Ltd., the Corporate Debtor. Payments amounting to Rs. 5,72,894/- remained unpaid despite requests. Jhunsons Chemicals initially filed a CIRP petition, which was withdrawn after Lifeline Services acknowledged the debt and issued two post-dated cheques. One cheque for Rs. 5,73,894/- was dishonored on 03.10.2017. Jhunsons Chemicals issued a notice under Section 8 of the Code on 16.11.2017, which remained unreplied. The Corporate Debtor did not raise any dispute regarding the quality of goods or services. The tender of the cheque was considered an acknowledgement of debt. The Corporate Debtor did

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## Issues and analysis

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

**Ratio:** The petition under Section 9 of the IBC can be admitted if the operational debt exists, a

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**Reasoning:** The court reasoned that the Operational Creditor had complied with the requirements of

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**Interpretation:** Section 9 of the IBC allows an Operational Creditor to initiate CIRP against a

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**Application:** The ratio and reasoning were applied to the facts of the case, where the

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## Parties

- **Judges:** Ina Mal…; DeepaKr…
- **Appellants:** Jhunsons Ch…
- **Respondents:** Lifeline Services…

## Timeline

- **2017-10-03 — Cheque Dish…**: Cheque for Rs. 5,73,894/- issued by…
- **2017-11-16 — Section 8 Noti…**: Operational Creditor issued a…

## 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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