# In the matter of Rainbow Denim Limited CP (IB) No. 23-Chd-Pb-2019

> NCLT judgment dated 2019-12-09. Citation: TCN-2019-NCLT-00275. M/s Amsons India, an operational creditor, filed a petition under Section 9 of the Insolvency…

- **Court:** NCLT
- **Order date:** 9 Dec 2019
- **Citation:** TCN-2019-NCLT-00275
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/rainbow-denim-limited-cp-ib-no-23-chd-pb-2019-145d48a2

## Summary

### Background

M/s Amsons India, an operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Rainbow Denim Limited, the corporate debtor, due to unpaid operational debt. The operational creditor claimed that the corporate debtor owed Rs. 87,24,423/- based on outstanding invoices for the supply of chemical products. The corporate debtor acknowledged the debt but cited financial difficulties and requested the operational creditor not to take further action, referring to a previous BIFR order for a revival scheme. The operational creditor issued demand notices, including one dated 24.09.2018, which was served via email. The corporate debtor replied, admitting the

…

## Facts

M/s Amsons India (Operational Creditor) filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Rainbow Denim Limited (Corporate Debtor). The Operational Creditor claimed an outstanding debt of Rs. 87,24,423/- for the supply of chemical products. The Corporate Debtor had business relations with the Operational Creditor since 2009. The Corporate Debtor issued a balance confirmation letter on 31.12.2017 showing an outstanding balance of Rs. 91,36,815/-. The Operational Creditor issued a demand notice dated 21.08.2018 under Section 8 of the Code for Rs. 91,36,815/-, relating to sales from financial year 2015-16 to 2018-19. The Corporate Debtor replied, stating reconciliation

…

## Issues and analysis

### Issue 1: Whether the demand notice in Form No. 3 …

**Ratio:** The statutory demand notice must be duly delivered upon the corporate debtor as per the

…

**Reasoning:** The Corporate Debtor did not challenge the receipt of the notice in Form No. 3. The

…

**Interpretation:** The proper service of the demand notice is a prerequisite for initiating CIRP.

…

**Application:** The Corporate Debtor's failure to challenge the receipt of the demand notice,

…

## Parties

- **Judges:** M. M. K…; Pradeep R.…
- **Appellants:** M/s Amsons…
- **Respondents:** M/s Rainbow Denim…

## Timeline

- **2017-12-31 — Balance Confirmation…**: Corporate Debtor issued a balance confirmation letter showing an outstanding balance of…
- **2018-01-01 — Date of D…**: The date of default is…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/rainbow-denim-limited-cp-ib-no-23-chd-pb-2019-145d48a2