# In the matter of Paradise Consumer Products Limited CP (IB) No.4767/MB.IV/2018

> NCLT judgment dated 2020-09-23. Citation: TCN-2020-NCLT-00541. J.Maheshkumar Petrochemicals Pvt Ltd, the Operational Creditor, filed a Company Petition under…

- **Court:** NCLT
- **Order date:** 23 Sept 2020
- **Citation:** TCN-2020-NCLT-00541
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/paradise-consumer-products-limited-cp-ib-no4767mbiv2018-45fd1bff

## Summary

### Background

J.Maheshkumar Petrochemicals Pvt Ltd, the Operational Creditor, filed a Company Petition under Section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) against Paradise Consumer Products Limited, the Corporate Debtor, for failing to make payment of a sum of ₹52,94,356.00 as principal and ₹28,43,287.77 as interest. The Operational Creditor supplied PVC materials to the Corporate Debtor through Reliance Industries Limited between February 2014 and July 2014 and is acting as a del credere agent. A demand notice was served to the Corporate Debtor, who questioned the competence of the Counsel to issue the Demand Notice. The Operational Creditor clarified an inadvertent error in the demand notice regarding TDS deduction and reiterated the demand for payment.

## Facts

J.Maheshkumar Petrochemicals Pvt Ltd (Operational Creditor) filed a petition against Paradise Consumer Products Limited (Corporate Debtor) under Section 9 of the IBC for unpaid dues. The Operational Creditor supplied PVC materials to the Corporate Debtor through Reliance Industries Limited between February 2014 and July 2014, acting as a del credere agent. Ten invoices were raised during this period. The total amount payable against the invoices was ₹52,94,356.00. Reliance Industries Limited issued a certificate confirming receipt of ₹83,79,552/- from the Operational Creditor on behalf of Paradise Polymers Limited (previous name of the Corporate Debtor). The Corporate Debtor issued a cheque for ₹65,54,884.87, which was dishonored. The Operational Creditor served a

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor has defaulted in …

**Ratio:** Section 4(1) of the IBC stipulates a minimum default amount of one lakh rupees for

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**Reasoning:** The NCLT found that the Corporate Debtor was in default of a debt due and payable, and

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**Interpretation:** Section 4(1) sets the threshold for initiating CIRP based on the amount of

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**Application:** The outstanding amount was ₹52,94,356.00 (principal) and ₹28,43,287.77

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## Parties

- **Judges:** Rajasekha…; RavikumarDu…
- **Appellants:** J.Maheshkumar…
- **Respondents:** Paradise Consumer…

## Timeline

- **2014-02-01 — Supply of PVC…**: Between February 2014 and July 2014, the Operational Creditor supplied PVC materials to…
- **2014-07-01 — Supply of PVC…**: Between February 2014 and July 2014, the Operational Creditor supplied PVC materials to…

## 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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