# In the matter of Reacon Engineers (India) Private Limited CP (IB) No. 476-KB-2017

> NCLT judgment dated 2018-12-05. Citation: TCN-2018-NCLT-00172. Diamond Steel Enterprise, the Operational Creditor, filed an application under Section 9 of the…

- **Court:** NCLT
- **Order date:** 5 Dec 2018
- **Citation:** TCN-2018-NCLT-00172
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/reacon-engineers-india-private-limited-cp-ib-no-476-kb-2017-99645e83

## Summary

### Background

Diamond Steel Enterprise, the Operational Creditor, filed an application under Section 9 of the Insolvency & Bankruptcy Code, 2016, against Reacon Engineers (India) Private Limited, the Corporate Debtor, to initiate the Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor allegedly failed to pay Rs. 20,50,136 towards the unpaid price of goods (pipes and pipe fittings) sold and supplied by the Operational Creditor. The Operational Creditor provided invoices and lorry receipts as evidence of the sale and supply of goods between 2012-04-09 and 2012-12-24. The Operational Creditor also presented a bank statement and a ledger account of the Corporate Debtor. The last payment of Rs. 1 lakh was received from the Corporate Debtor on 2015-10-06.

## Facts

Diamond Steel Enterprise (Operational Creditor) claimed that Reacon Engineers (India) Private Limited (Corporate Debtor) owed Rs. 20,50,136 for unpaid goods (pipes and pipe fittings). Goods were sold and supplied between 2012-04-09 and 2012-12-24. The last payment of Rs. 1 lakh was received on 2015-10-06. The Operational Creditor sent a demand notice on 2017-05-24 under Section 8 of the I&B Code, which was received by the Corporate Debtor, but no reply was given. The application was filed on 2017-07-28, within three years of the last payment. The Corporate Debtor did not dispute the debt or default. The Corporate Debtor requested an adjournment to clear the dues, but the court found no concrete proposal for payment.

## Issues and analysis

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

**Ratio:** Section 9 of the Insolvency & Bankruptcy Code, 2016, read with Rule 6(1) of the

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**Reasoning:** The court found that the Operational Creditor had produced sufficient evidence, including

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**Interpretation:** Section 9 allows an operational creditor to initiate CIRP if a debt is due and

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**Application:** The Operational Creditor, Diamond Steel Enterprise, fulfilled the requirements

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## Parties

- **Judges:** Madan B.…
- **Appellants:** Diamond Steel…
- **Respondents:** Reacon Engineers…

## Timeline

- **2012-04-09 — Start of Good…**: The Operational Creditor started supplying goods (pipes and pipe fittings) to the…
- **2012-12-24 — End of Goods…**: The Operational Creditor completed the supply of goods (pipes and pipe fittings) to the…

## 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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