# In the matter of Raj Rayon Industries Limited C.P. No. (IB) 26-9-NCLT-AHM-2019

> NCLT judgment dated 2019-05-29. Citation: TCN-2019-NCLT-03155. The case involves an application filed by M/s. Khanna & Khanna Limited, an operational…

- **Court:** NCLT
- **Order date:** 29 May 2019
- **Citation:** TCN-2019-NCLT-03155
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/raj-rayon-industries-limited-cp-no-ib-26-9-nclt-ahm-2019-ef44bda7

## Summary

### Background

The case involves an application filed by M/s. Khanna & Khanna Limited, an operational creditor, against M/s. Raj Rayon Industries Limited, the corporate debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016. Khanna & Khanna Limited claimed an amount of Rs. 36,06,136/- as due from Raj Rayon Industries Limited for the supply of Spin Finish Oil and other lubricating materials. The application was filed due to the corporate debtor's failure to pay the outstanding amount.

## Facts

M/s. Khanna & Khanna Limited, the operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against M/s. Raj Rayon Industries Limited, the corporate debtor. Khanna & Khanna Limited claimed that Raj Rayon Industries Limited owed them Rs. 36,06,136/-, which included a principal amount of Rs. 33,91,911/- for the supply of goods and Rs. 2,14,225/- towards interest calculated at 18% per annum. The invoices and related delivery documents were submitted as evidence. Raj Rayon Industries Limited admitted to its inability to clear the overdue payment due to economic and financial difficulties. The application was deemed complete by the Adjudicating Authority.

## Issues and analysis

### Issue 1: Whether the application filed by the operational creditor is complete and meets the requirements of …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016, outlines the requirements for an

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**Reasoning:** The Adjudicating Authority determined that the application filed by M/s. Khanna &

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**Interpretation:** The interpretation of Section 9 requires the Adjudicating Authority to assess

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**Application:** In this case, the application was deemed complete because it included invoices,

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## Parties

- **Judges:** Manorama…
- **Appellants:** Khanna & Khanna…
- **Respondents:** Raj Rayon…
- **Advocates:** Aditya C.…; Jayani B…; +2 more

## Timeline

- **2018-08-25 — Demand Notice…**: Khanna & Khanna Limited issued a demand notice to Raj Rayon Industries Limited for the…
- **2019-05-29 — Order Del…**: The NCLT Ahmedabad Bench delivered the order, admitting the application and initiating…

## 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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