# In the matter of Madras Fertilizers Ltd. CP-335-(IB)-CB-2018

> NCLT judgment dated 2018-09-12. Citation: TCN-2018-NCLT-00772. The case involves an application filed by M/s.Tarapore Constructions Private Limited…

- **Court:** NCLT
- **Order date:** 12 Sept 2018
- **Citation:** TCN-2018-NCLT-00772
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/madras-fertilizers-ltd-cp-335-ib-cb-2018-de01485a

## Summary

### Background

The case involves an application filed by M/s.Tarapore Constructions Private Limited (Operational Creditor) against M/s. Madras Fertilizers Limited (Corporate Debtor) under Section 9 of the I&B Code, 2016, read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The operational creditor claimed an amount of Rs.1,02,32,733/- based on an arbitration award dated 31.03.2004, amended on 25.05.2004, with interest. The corporate debtor disputed the claim, citing that it was a sick company referred to the Board for Industrial & Financial Reconstruction (BIFR) and protected under the Sick Industrial Companies Act (SICA), 1985. The operational creditor issued a demand notice on 17.02.2018, but the corporate debtor failed to

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## Facts

M/s.Tarapore Constructions Private Limited (Operational Creditor) filed an application under Section 9 of the I&B Code against M/s. Madras Fertilizers Limited (Corporate Debtor) for a debt of Rs.1,02,32,733/- based on an arbitration award. The award was dated 31.03.2004 and amended on 25.05.2004, with interest at 12% per annum, amounting to Rs.1,70,46,330/- as of 15.02.2018. The Operational Creditor executed civil and structural works for the Corporate Debtor's factory. The Corporate Debtor owed Rs.1,89,39,181/-, but disputed the amount, claiming only Rs.16,34,671/- was due. Arbitration proceedings were initiated, and a final award was pronounced on 31.03.2004, amended on 25.05.2004. The Corporate Debtor disputed the award and filed O.P. 659 of 2004 before the

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor under Section 9 of the I&B Code is …

**Ratio:** Section 9 of the I&B Code allows an operational creditor to initiate CIRP against a

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**Reasoning:** The Tribunal observed that the Operational Creditor had served a demand notice as

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**Interpretation:** Section 9 provides a mechanism for operational creditors to recover debts owed

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**Application:** The Operational Creditor met the requirements of Section 9 by demonstrating a

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## Parties

- **Judges:** K. ANANTHA…; S. VIJAYARA…
- **Appellants:** M/s.Tarapore…
- **Respondents:** M/s. Madras…

## Timeline

- **1995-02-24 — Letter of…**: The Respondent accepted the tender of the…
- **1995-06-12 — Work Order…**: The work order was…

## 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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