# In the matter of Prithvi Plasto India Pvt. Ltd. Company Petition No. IB-1727-ND-2019

> NCLT judgment dated 2020-07-28. Citation: TCN-2020-NCLT-00947. Prayag Polytech Pvt. Ltd. filed an application under Section 9 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 28 Jul 2020
- **Citation:** TCN-2020-NCLT-00947
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/prithvi-plasto-india-pvt-ltd-company-petition-no-ib-1727-nd-2019-ded8fa66

## Summary

### Background

Prayag Polytech Pvt. Ltd. filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Prithvi Plasto India Pvt. Ltd. The applicant, an operational creditor, claimed that the corporate debtor defaulted on payments for master batches supplied. The corporate debtor contested the claim, alleging that the supplied material was of inferior quality and raised a debit note, which the applicant disputed. The NCLT considered the application, the corporate debtor's reply, and the applicant's rejoinder.

## Facts

Prayag Polytech Pvt. Ltd. (the applicant) supplied master batches to M/s Prithvi Plasto India Pvt. Ltd. (the corporate debtor). The applicant claimed that the corporate debtor defaulted on payments amounting to Rs. 3,62,140. The last payment was made on June 20, 2018. The applicant issued a demand notice on March 4, 2019, claiming Rs. 5,03,618, including interest. The corporate debtor contended that the material supplied was of inferior quality and raised a debit note on June 25, 2017, for Rs. 10,90,000. The applicant disputed the debit note, stating it was not acknowledged by an authorized signatory and lacked the company's official stamp. The applicant asserted that there was no prior communication regarding the quality of goods before the reply to the application.

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## Issues and analysis

### Issue 1: Whether the application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 is …

**Ratio:** Section 9(5) of the IBC states that the adjudicating authority shall admit the

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**Reasoning:** The NCLT found that the application was complete and the applicant had established its

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**Interpretation:** Section 9 of the IBC outlines the procedure for initiating CIRP by an

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**Application:** The NCLT applied Section 9(5) of the IBC to the facts and found that the

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## Parties

- **Judges:** DEEPTI M…; Sh. Hemant Kumar…
- **Appellants:** Prayag Polytech…
- **Respondents:** M/s Prithvi…
- **Advocates:** Vipul G…; Aast…; +2 more

## Timeline

- **2017-06-25 — Debit Note…**: The Corporate Debtor raised a Debit Note on…
- **2018-06-20 — Last Pay…**: The last payment was made by the corporate…

## 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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