# In the matter of Nife Fire Systems Private Limited CP-660-(IB)-CB-2017

> NCLT judgment dated 2018-03-13. Citation: TCN-2018-NCLT-01708. The case involves an application filed by an Operational Creditor, Autocop (India) Pvt Ltd,…

- **Court:** NCLT
- **Order date:** 13 Mar 2018
- **Citation:** TCN-2018-NCLT-01708
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/nife-fire-systems-private-limited-cp-660-ib-cb-2017-d6cec81e

## Summary

### Background

The case involves an application filed by an Operational Creditor, Autocop (India) Pvt Ltd, against the Corporate Debtor, Nife Fire Systems Pvt Ltd, under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed an outstanding debt of Rs. 1,35,110/- as principal, with interest accruing to Rs. 1,75,177/- as of 20.07.2017. The Corporate Debtor had approached the Operational Creditor to supply Facility Security Products, placed a purchase order, and the Operational Creditor supplied the goods. An invoice was raised, and a cheque issued by the Corporate Debtor was returned due to insufficient funds.

## Facts

Autocop (India) Pvt Ltd, the Operational Creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code (I&B Code), 2016, against Nife Fire Systems Pvt Ltd, the Corporate Debtor. The Operational Creditor claimed Rs. 1,35,110/- as the principal amount due, with interest accumulating to Rs. 1,75,177/- as of July 20, 2017. The Corporate Debtor had approached the Operational Creditor to supply Facility Security Products, and a purchase order was placed. The Operational Creditor supplied the products and raised an invoice. The Corporate Debtor issued a cheque for Rs. 1,35,110/-, which was returned due to 'insufficient funds'. The Operational Creditor sent a demand notice dated September 19, 2017, to the Corporate Debtor under Section 8 of the

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## Issues and analysis

### Issue 1: Whether the Operational Creditor's application under Section 9 of the Insolvency and Bankruptcy …

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

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**Reasoning:** The court reasoned that the Corporate Debtor had defaulted in making payment of the

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

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**Application:** The court applied Section 9 to the facts, noting that the Operational Creditor

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## Parties

- **Judges:** CH. MOHD SHARIEF…
- **Appellants:** Autocop India Pvt…
- **Respondents:** Nife Fire Systems…
- **Advocates:** MONISH…; A-DHAMOD…

## Timeline

- **2017-07-20 — Debt Calcu…**: The outstanding debt, including…
- **2017-09-19 — Demand N…**: The Operational Creditor sent a demand notice to the Corporate Debtor under Section 8 of…

## 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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