# In the matter of Om Boseco Rail Products Ltd. CP(IB)No.1735/KB/2019

> NCLT judgment dated 2020-05-20. Citation: TCN-2020-NCLT-01343. 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-01343
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/om-boseco-rail-products-ltd-cpibno1735kb2019-da498666

## 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 operational creditor is engaged in manufacturing and supplying chemicals and allied products to foundry and steel industries. The corporate debtor regularly purchased these products on credit, with a credit period of 30 days, extended by another 15 days, and a 7-day transit period for payment by post-dated cheques. However, the corporate debtor failed to make payments against outstanding debt.

## Facts

Foseco India Limited (Operational Creditor) supplied chemicals and allied products to Om Boseco Rail Products Limited (Corporate Debtor) for its foundry and steel industries. The Corporate Debtor regularly purchased these products on credit with a 30-day credit period, extended by 15 days, and a 7-day transit period for post-dated cheques. The Corporate Debtor failed to pay outstanding debts. The total outstanding debt as of July 31, 2019, was Rs. 90,00,919.10 (Principal: Rs. 78,52,663.00 + Interest: Rs. 11,48,256.10). The Operational Creditor issued a demand notice on August 1, 2019, which the Corporate Debtor did not respond to. The Corporate Debtor never raised any grievances regarding the quality or specification of the supplied materials. The Corporate Debtor was

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## Issues and analysis

### Issue 1: Whether the 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 court reasoned that the amendment to Section 4 of the IBC, which inserted a proviso

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**Interpretation:** The interpretation of the amendment to Section 4 of the IBC hinges on whether

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

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## Parties

- **Judges:** Jinan…
- **Appellants:** Foseco India…
- **Respondents:** Om Boseco Rail…
- **Advocates:** Anjan Kum…; Dhirendra Nath…; +2 more

## Timeline

- **2018-12-03 — Invoice…**: Invoice issued for…
- **2019-08-01 — Demand Notice…**: Operational creditor served a demand…

## 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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