# In the matter of Nitesh Residency Hotels Pvt. Ltd. C.P. (IB) No. 108-BB-2017

> NCLT judgment dated 2019-05-10. Citation: TCN-2019-NCLT-03336. The case involves an application filed by M/s. Posterscope Outdoor Advertising Pvt. Ltd.…

- **Court:** NCLT
- **Order date:** 10 May 2019
- **Citation:** TCN-2019-NCLT-03336
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/nitesh-residency-hotels-pvt-ltd-cp-ib-no-108-bb-2017-a631b9a4

## Summary

### Background

The case involves an application filed by M/s. Posterscope Outdoor Advertising Pvt. Ltd. ('Applicant/Operational Creditor') under Section 9 of the IBC, 2016, against M/s. Nitesh Residency Hotels Private Limited ('Respondent/Corporate Debtor') seeking to initiate Corporate Insolvency Resolution Process (CIRP). The application is based on the ground that the Corporate Debtor committed a default for a total outstanding amount of Rs.6,57,500/-. The Corporate Debtor and its Sister Concerns had entered into agreements with the Applicant for provision of advertising services. In 2015, the Corporate Debtor and its Sister Concerns collectively owed the Applicant Rs.1,87,32,290/-. Despite demands, the Corporate Debtor and its Sister Concerns failed to remit the dues and

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## Facts

M/s. Posterscope Outdoor Advertising Pvt. Ltd. (Applicant) filed an application under Section 9 of the IBC, 2016, against M/s. Nitesh Residency Hotels Private Limited (Corporate Debtor) to initiate CIRP due to a default of Rs.6,57,500/-. The Applicant provided advertising services to the Corporate Debtor and its Sister Concerns. In 2015, the Corporate Debtor and its Sister Concerns owed the Applicant Rs.1,87,32,290/-. A settlement agreement was executed on 05.12.2016, where the Corporate Debtor agreed to pay Rs.65,00,000/-. The Corporate Debtor paid only Rs.35,00,000/-. The Applicant issued a statutory notice on 17.07.2017. The Corporate Debtor paid Rs.5,00,000/- on 09.08.2017. The Respondent claimed the application was not maintainable under IBC, the amount claimed

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## Issues and analysis

### Issue 1: Whether the claim made by the Petitioner …

**Ratio:** The IBC, 2016 is not meant for recovery of outstanding amounts but to initiate CIRP for

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**Reasoning:** The NCLT considered the objections raised by the Respondent and the facts of the case,

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**Interpretation:** The IBC is intended to resolve

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**Application:** The NCLT found that the application was instituted with an intention to recover

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## Parties

- **Judges:** Rajeswara Rao…
- **Appellants:** M/s. Posterscope…
- **Respondents:** M/s. NiteshResiden…

## Timeline

- **2016-12-05 — Settlement Ag…**: Applicant and Corporate Debtor executed a Settlement Agreement where the Corporate Debtor…
- **2016-12-15 — Winding-up Petition…**: C.P No.266 of 2016 is dismissed as withdrawn by an order dated 15.12.2016 by the Hon'ble…

## 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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