# In the matter of Mystic Monk Designs Private Limited IB-3107-ND-2019

> NCLT judgment dated 2021-08-24. Citation: TCN-2021-NCLT-01294. The case involves an application filed by Kamiya & Co, an Operational Creditor (OC), under…

- **Court:** NCLT
- **Order date:** 24 Aug 2021
- **Citation:** TCN-2021-NCLT-01294
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mystic-monk-designs-private-limited-ib-3107-nd-2019-98c763a3

## Summary

### Background

The case involves an application filed by Kamiya & Co, an Operational Creditor (OC), under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC), seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Mystic Monk Designs Private Limited, the Corporate Debtor (CD). The OC claims that the CD defaulted on settling an amount of Rs 4,00,000, including interest, for professional services related to an online test project. The OC issued a demand notice under Section 8 of the IBC, to which the CD initially acknowledged a commercial agreement but denied any outstanding dues. Later, the CD stated there was no outstanding amount, claiming to have already paid Rs 1,00,000 against an initial invoice of Rs 5,00,000 and requested time to pay the balance.

## Facts

Kamiya & Co, an Operational Creditor (OC), provided professional services to Mystic Monk Designs Private Limited (CD) related to online test exams and project report preparation. The OC raised an invoice for Rs 5,00,000 on 2018-05-01. The CD paid Rs 1,00,000 after receiving the invoice but failed to pay the remaining Rs 4,00,000. The OC issued a demand notice under Section 8 of the IBC on 2019-06-29. The CD replied on 2019-07-11, acknowledging a commercial agreement but denying any outstanding dues. On 2020-02-06, the CD stated there was no outstanding amount and claimed to have paid Rs 1,00,000 on 2019-03-30, requesting time to pay the balance. The OC filed an application under Section 9 of the IBC seeking initiation of CIRP. The CD did not raise any dispute

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## Issues and analysis

### Issue 1: Whether the Operational Creditor (OC) has established the existence of debt and default on the part …

**Ratio:** Section 9 of the IBC allows an operational creditor to initiate CIRP against a corporate

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**Reasoning:** The court reasoned that the CD had acknowledged the existence of a commercial arrangement

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**Interpretation:** Section 9 of the IBC is interpreted to mean that if an operational creditor can

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**Application:** The court applied the ratio to the facts of the case, noting that the CD had

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## Parties

- **Judges:** ABNI RANJAN KUMAR…; K.K. V…
- **Appellants:** Kamiya…
- **Respondents:** Mystic Monk…

## Timeline

- **2018-05-01 — Invoice R…**: Operational Creditor raised an invoice for…
- **2019-03-30 — Partial P…**: Corporate Debtor paid Rs…

## 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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