# In the matter of Mohan Motor Distributors Pvt. Ltd. C.P. (IB) No. 1694-KB-2019

> NCLT judgment dated 2020-02-24. Citation: TCN-2020-NCLT-01835. The case involves an application under Section 9 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 24 Feb 2020
- **Citation:** TCN-2020-NCLT-01835
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mohan-motor-distributors-pvt-ltd-cp-ib-no-1694-kb-2019-fc1e2561

## Summary

### Background

The case involves an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, read with Rule 6 of the Insolvency and Bankruptcy Code 2016 (Application to Adjudicating Authority) Rules, 2016, for the initiation of the Corporate Insolvency Resolution Process (CIRP). The operational creditor, Aircom Travels Private Limited, provided travel services to the corporate debtor, Mohan Motor Distributors Private Limited, between 25.10.2018 and 11.12.2018. An outstanding amount of Rs. 2,67,705/- remained unpaid. The operational creditor served a notice under Section 8 of the IBC, 2016, on 02.08.2019, for payment of the amount along with interest. The corporate debtor contended that the debt was not due and payable because there were no terms for its payment.

## Facts

Aircom Travels Private Limited (operational creditor) provided travel services to Mohan Motor Distributors Private Limited (corporate debtor) from 2018-10-25 to 2018-12-11. An amount of Rs. 2,67,705/- remained unpaid. Aircom Travels issued a notice under Section 8 of the IBC on 2019-08-02. Mohan Motor Distributors contended the debt was not due. The invoices included interest clauses and due dates. The application was filed under Section 9 of the IBC. The Adjudicating Authority approved the application and initiated CIRP.

## Issues and analysis

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

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

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**Reasoning:** The court found that the operational creditor had provided travel services to the

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

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**Application:** The court applied Section 9 to the facts and found that the operational

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** Aircom Travels…
- **Respondents:** Mohan Motor…

## Timeline

- **2018-10-25 — Service Sta…**: Operational creditor started providing…
- **2018-12-11 — Service En…**: Operational creditor stopped providing…

## 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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