# In the matter of RDG Interior Decoration Exterior Architecture Private Limited C.P. (IB) No. 1303-KB-2019

> NCLT judgment dated 2019-12-19. Citation: TCN-2019-NCLT-00067. Gagan Ferrotech Ltd. filed an application under Section 9 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 19 Dec 2019
- **Citation:** TCN-2019-NCLT-00067
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/rdg-interior-decoration-exterior-architecture-private-limited-cp-ib-no-1303-kb-2-404289f7

## Summary

### Background

Gagan Ferrotech Ltd. filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against RDG Interior Decoration Exterior Architecture Private Limited, alleging a default in payment of INR 7,69,415/-. The Corporate Debtor had placed orders for the purchase of TMT Bars, and the Operational Creditor supplied the goods and raised invoices. Despite issuing post-dated cheques, the cheques were dishonored due to insufficient balance. The Operational Creditor sent a demand notice, but the Corporate Debtor failed to make the payment.

## Facts

M/s. Gagan Ferrotech Limited (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. RDG Interior Decoration Exterior Architecture Private Limited (Corporate Debtor). The Corporate Debtor had placed orders for the purchase of TMT Bars, and the Operational Creditor supplied the goods and raised a Tax Invoice No GFL/17-18/03804 dated 24.10.2017 for Rs. 6,07,608/-. The Corporate Debtor issued two post-dated cheques towards payment, but both cheques were dishonored due to insufficient balance. The Operational Creditor sent a Demand Notice dated 16.04.2019 under Form 3 of the Code to the Corporate Debtor upon its failure to make payment of the due amount

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor under Section 9 of the Insolvency and …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016, allows an operational creditor to

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**Reasoning:** The court considered the documents submitted by the Operational Creditor, including the

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**Interpretation:** Section 9 provides the mechanism for operational creditors to trigger the

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**Application:** The court found that the Operational Creditor had provided sufficient evidence

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## Parties

- **Judges:** Jinan…; Harish Chander…
- **Appellants:** Gagan Ferrotech…
- **Respondents:** RDG Interior…; RDG Interior…

## Timeline

- **2017-10-19 — Purchase…**: Corporate Debtor placed…
- **2017-10-24 — Tax Invo…**: Operational Creditor raised Tax Invoice…

## 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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