# In the matter of Reddy Pharmaceuticals Limited CP (IB) No. 262-9-HDB-2019

> NCLT judgment dated 2019-12-16. Citation: TCN-2019-NCLT-00154. M/s. Sri Chaitanya Chlorides Private Limited filed a company petition against M/s. Reddy…

- **Court:** NCLT
- **Order date:** 16 Dec 2019
- **Citation:** TCN-2019-NCLT-00154
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/reddy-pharmaceuticals-limited-cp-ib-no-262-9-hdb-2019-21248320

## Summary

### Background

M/s. Sri Chaitanya Chlorides Private Limited filed a company petition against M/s. Reddy Pharmaceuticals Limited under Section 9 of the Insolvency and Bankruptcy Code, 2016, alleging default in payment for supplied chemicals. The Petitioner/Operational Creditor is in the business of rendering the services relating to supply of chemicals and chlorides including CIS BROMO BENZOAT and Mythyloxy Phenyl etc., and whereas, the Respondent/Corporate Debtor is a Limited Company registered under the Companies Act, 1956 having its registered office at Sanga Reddy District in Telangana and it is engaged in manufacture and supplying & trading of Pharmaceutical chemicals API, intermediates, formulations etc.

## Facts

M/s. Sri Chaitanya Chlorides Private Limited (Operational Creditor) claimed that M/s. Reddy Pharmaceuticals Limited (Corporate Debtor) defaulted on payments for supplied pharma chemicals. The Operational Creditor supplied chemicals like CIS Bromo Benzoat and Mythyloxy Phenyl to the Corporate Debtor. The Corporate Debtor's authorized and paid-up share capital is ₹2,60,10,000. The Corporate Debtor allegedly owed ₹2,15,17,306, including principal and interest. A cheque for ₹2,14,63,380 issued by the Corporate Debtor was returned with the remark "exceeds arrangement". The Operational Creditor issued a demand notice under Section 8(1) of the IB Code. The Corporate Debtor denied the due amount, alleging that some invoices were fabricated and that the Operational

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## Issues and analysis

### Issue 1: Whether there is a default in payment of the …

**Ratio:** The Adjudicating Authority must be satisfied that a default has occurred in the payment

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**Reasoning:** The Adjudicating Authority considered the invoices, ledger accounts, and other evidence

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**Interpretation:** The existence of an operational debt and its default is a prerequisite for

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**Application:** The Adjudicating Authority found that the Corporate Debtor had defaulted on

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## Parties

- **Judges:** Shri. K. Anantha…; BINOD KUMAR…
- **Respondents:** M/s.Reddy…; M/s. Reddy…

## Timeline

- **2019-03-26 — Cheque Issu…**: Corporate Debtor issued a…
- **2019-03-29 — Cheque Retu…**: The cheque was returned with the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8(1) — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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