# In the matter of Midas Touch Export Private Ltd C.P. 16- I&BP- NCLT- MB- MAH- 2017

> NCLT judgment dated 2017-02-17. Citation: TCN-2017-NCLT-00973. The case involves an application filed by Shyam Indofab Private Limited, an operational…

- **Court:** NCLT
- **Order date:** 17 Feb 2017
- **Citation:** TCN-2017-NCLT-00973
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/midas-touch-export-private-ltd-cp-16-ibp-nclt-mb-mah-2017-9686b7ae

## Summary

### Background

The case involves an application filed by Shyam Indofab Private Limited, an operational creditor, against Midas Touch Export Private Limited, the corporate debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016. The operational creditor claims that the corporate debtor failed to make payments for goods supplied, leading to a default. The operational creditor seeks the initiation of the corporate insolvency resolution process, a moratorium, a public announcement, and the appointment of an interim resolution professional.

## Facts

Shyam Indofab Private Limited (the operational creditor) supplied cloth to Midas Touch Export Private Limited (the corporate debtor) based on purchase orders. The total consideration for the supplies between 2015-10-12 and 2016-02-19 was ₹47,64,035. The corporate debtor made repayments totaling ₹32,23,564 until 2016-03-10. The last payment of ₹2,26,006 was made via cheque number 697963. After 2016-03-10, no further payments were made, despite the operational creditor's demands. The corporate debtor cited business difficulties as the reason for non-payment. The operational creditor issued a notice under Section 434(1)(a) of the Companies Act, 1956, on 2016-10-25, demanding ₹15,40,471. The corporate debtor responded, citing labor problems and internal disruptions. The

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in …

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

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**Reasoning:** The court examined the invoices, bank statements, and communications between the parties

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**Interpretation:** The term 'default' under the IBC is interpreted as non-payment of debt when due

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**Application:** The court applied the ratio to the facts and found that the Corporate Debtor

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## Parties

- **Judges:** B.S.V. Prakash…; V. Nallasen…
- **Appellants:** Shyam Indofab…
- **Respondents:** Midas Touch…

## Timeline

- **2015-10-12 — Commencement of…**: The Operational Creditor commenced…
- **2016-02-19 — Culmination of…**: The supplies culminated, resulting in 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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