# In the matter of Rajvir Industries Ltd. CP (IB) No. 102-9-HDB-2018

> NCLT judgment dated 2018-09-06. Citation: TCN-2018-NCLT-00812. M/s. Krishna Bio Tech, claiming to be an operational creditor, filed a petition under Section 9…

- **Court:** NCLT
- **Order date:** 6 Sept 2018
- **Citation:** TCN-2018-NCLT-00812
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/rajvir-industries-ltd-cp-ib-no-102-9-hdb-2018-ca11b727

## Summary

### Background

M/s. Krishna Bio Tech, claiming to be an operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against M/s. Rajvir Industries Limited, styled as the Corporate Debtor. The operational creditor claimed to have sold cotton bales to the corporate debtor, but the corporate debtor rejected the consignment due to quality issues. The respondent stated that the books of accounts of the petitioner and the respondent have been reconciled vide debit notes raised by the respondent on the petitioner as well as bank payments.

## Facts

M/s. Krishna Bio Tech, claiming to be an operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against M/s. Rajvir Industries Limited. Krishna Bio Tech claimed to have sold cotton bales to Rajvir Industries Limited vide invoices dated 23.05.2017, 13.06.2017 and 09.07.2017, totaling Rs. 28,40,840/-. They also claimed interest of Rs. 1,67,283/- as on 20.11.2017, bringing the total claim to Rs. 30,08,123/-. A demand notice in Form-3 was issued on 20.11.2017 and delivered on 27.11.2017. Rajvir Industries Limited rejected the consignment, citing poor quality after conducting quality tests. They stated that the cotton was contaminated with water patches and extraneous particles, exceeding stipulated limits.

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## Issues and analysis

### Issue 1: Whether there is an 'Operational …

**Ratio:** Section 5(21) of the Insolvency and Bankruptcy Code defines 'Operational debt' as a claim

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**Reasoning:** The court determined that the claim made by the petitioner related to the supply of

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**Interpretation:** The definition of 'Operational debt' is interpreted to include claims arising

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**Application:** Since the claim was for the supply of cotton bales, it was categorized as an

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## Parties

- **Judges:** BIKKI RAVEENDRA…
- **Appellants:** Krishna Bi…
- **Respondents:** Rajvir Industries…
- **Advocates:** Mr.Y.Suryan…; Mr.Rishabh…; +2 more

## Timeline

- **2017-05-23 — Invoice…**: Invoice No.261 issued for 100 bales of…
- **2017-06-13 — Invoice…**: Invoice no.372 issued…

## 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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