# In the matter of Om Besco Rail Products Limited CP(IB)No.1735-KB-2019

> NCLT judgment dated 2020-05-20. Citation: TCN-2020-NCLT-01346. Foseco India Limited, the operational creditor, filed an application under Section 9 of the…

- **Court:** NCLT
- **Order date:** 20 May 2020
- **Citation:** TCN-2020-NCLT-01346
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/om-besco-rail-products-limited-cpibno1735-kb-2019-dbdd6820

## Summary

### Background

Foseco India Limited, the operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Om Boseco Rail Products Limited, the corporate debtor, due to an alleged default in payment of operational debt amounting to Rs. 90,00,919.10. The corporate debtor was called absent and declared ex-parte, but the order was set aside, and the corporate debtor was given time to reply. Despite this, the corporate debtor did not contest the application effectively.

## Facts

Foseco India Limited (Operational Creditor) supplied chemicals and allied products to Om Boseco Rail Products Limited (Corporate Debtor). The Corporate Debtor regularly purchased these items on credit, with a 30-day credit period, extended by another 15 days. The Corporate Debtor failed to make payments against outstanding invoices. The total outstanding debt as of 2019-07-31 was Rs. 90,00,919.10, including principal and interest. The Corporate Debtor never raised grievances about the quality of the supplied materials. The Operational Creditor served a demand notice on 2019-08-01, but received no reply. The Corporate Debtor was initially declared ex-parte but was later given an opportunity to respond. The Corporate Debtor's counsel argued that due to an amendment to

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## Issues and analysis

### Issue 1: Whether Notification u/s 4 of the Code raising the minimum default limit be applicable to the …

**Ratio:** A statute is presumed to be prospective unless it is held to be retrospective, either

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**Reasoning:** The notification amending Section 4 of the IBC did not explicitly state that it would

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**Interpretation:** The court interpreted the amendment to Section 4 of the IBC as not having

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**Application:** The court applied the principle of prospective application to the amendment,

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## Parties

- **Judges:** Jinan…
- **Appellants:** Foseco India…
- **Respondents:** Om Boseco Rail…

## Timeline

- **2019-08-01 — Demand Notice…**: The operational creditor served a…
- **2020-01-17 — Ex-parte…**: The corporate debtor was declared…

## 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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