# In the matter of Lifestyle Fitness Private Limited IB-310-ND-2019

> NCLT judgment dated 2019-06-14. Citation: TCN-2019-NCLT-02885. The Operational Creditor, Suman Chadha, filed a petition under Section 9 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 14 Jun 2019
- **Citation:** TCN-2019-NCLT-02885
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/lifestyle-fitness-private-limited-ib-310-nd-2019-561cd523

## Summary

### Background

The Operational Creditor, Suman Chadha, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Lifestyle Fitness Private Limited, the Corporate Debtor, for unpaid dues related to consultancy and professional services provided in 2016-2017. The Corporate Debtor allegedly issued cheques that were later dishonored and returned by the bank. A statutory demand notice was issued on 2018-12-03, but the Corporate Debtor failed to make the payment or provide a valid dispute notice.

## Facts

Suman Chadha, the Operational Creditor, provided consultancy and professional services to Lifestyle Fitness Private Limited, the Corporate Debtor, during 2016-2017. The agreed amount for these services was Rs. 35,00,000. The Corporate Debtor issued cheques dated 2017-04-20 and 2017-10-20, but later requested the Operational Creditor not to present them. The Corporate Debtor continued this practice until 2018-08-12. Payments of Rs. 7,00,000 and Rs. 2,00,000 were made. The last cheques issued were dishonored and returned by Canara Bank on 2018-09-27. A notice under Section 138 of the Negotiable Instruments Act was issued. A statutory demand notice was issued on 2018-12-03 for a default amount of Rs. 26,85,907. The Corporate Debtor claimed to have paid Rs. 25,00,000 to

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted on its …

**Ratio:** Section 9(5) of the IBC, 2016 allows for the admission of an application if a default has

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**Reasoning:** The Tribunal found that the Corporate Debtor had issued cheques that were dishonored and

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**Interpretation:** The IBC defines 'default' as non-payment of debt when whole or any part or

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**Application:** The Corporate Debtor's failure to honor the cheques and the subsequent lack of

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## Parties

- **Judges:** R. VARADH…; DeepaKr…
- **Appellants:** Suman C…
- **Respondents:** Lifestyle Fitness…

## Timeline

- **2016-01-01 — Consultancy S…**: Operational Creditor provided consultancy and professional services to Corporate Debtor…
- **2017-04-20 — Cheque I…**: Corporate Debtor issued cheques…

## 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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