# In the matter of Pal Developer Private Ltd. (IB)-894(ND)2019

> NCLT judgment dated 2020-01-27. Citation: TCN-2020-NCLT-02170. The case involves a petition filed by Mr. Ram Niwas Gupta, an Operational Creditor, against M/s…

- **Court:** NCLT
- **Order date:** 27 Jan 2020
- **Citation:** TCN-2020-NCLT-02170
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/pal-developer-private-ltd-ib-894nd2019-8af8485c

## Summary

### Background

The case involves a petition filed by Mr. Ram Niwas Gupta, an Operational Creditor, against M/s Palm Developers Private Ltd, the Corporate Debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Operational Creditor sought to initiate the Corporate Insolvency Resolution Process (CIRP) due to unpaid dues for the supply of steel TMT bars. Initially, a settlement was reached, and the petition was withdrawn, but it was later restored due to dishonored post-dated cheques issued by the Corporate Debtor. The Corporate Debtor acknowledged its liability by entering into a settlement agreement and expressing its intention to clear the outstanding dues.

## Facts

Mr. Ram Niwas Gupta, the Operational Creditor, filed a petition under Section 9 of the IBC against M/s Palm Developers Private Ltd, the Corporate Debtor, for unpaid dues related to the supply of steel TMT bars. The Corporate Debtor was incorporated on 23.08.2013. The Operational Creditor claimed that since August 2017, the Corporate Debtor had not paid outstanding payments, with a total liability of Rs. 1,20,27,624.71, including a principal amount of Rs. 93,64,284.20. A demand notice was sent on 27.12.2018. Initially, a settlement was reached, and the petition was withdrawn on 04.06.2019, based on post-dated cheques amounting to Rs. 1,18,00,554. However, the cheques were dishonored, leading to the restoration of the petition on 07.01.2020. The Corporate Debtor admitted

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## Issues and analysis

### Issue 1: Whether the present Petition is maintainable under Section 9 of the Insolvency and Bankruptcy Code, …

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

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**Reasoning:** The court considered the Corporate Debtor's objection regarding the maintainability of

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**Interpretation:** Section 9 of the IBC provides the framework for operational creditors to

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**Application:** The court found that the petition was complete and established the default in

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## Parties

- **Judges:** DEEPTI M…; SHRI. L. N.…
- **Appellants:** Ram Niwas…
- **Respondents:** Palm Developers…

## Timeline

- **2013-08-23 — Incorporation of…**: M/s. Palm Developers Pvt. Ltd. was…
- **2017-08-01 — Default in P…**: The Corporate Debtor had not paid the…

## 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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