# In the matter of Saka Limited Company Petition No. (IB)-88(ND)-2020

> NCLT judgment dated 2020-06-08. Citation: TCN-2020-NCLT-01231. The case involves M/S Adonis Electronics Pvt. Ltd., the operational creditor, filing an…

- **Court:** NCLT
- **Order date:** 8 Jun 2020
- **Citation:** TCN-2020-NCLT-01231
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/saka-limited-company-petition-no-ib-88nd-2020-628156cf

## Summary

### Background

The case involves M/S Adonis Electronics Pvt. Ltd., the operational creditor, filing an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against M/S Saka Ltd., the corporate debtor, for initiation of the Corporate Insolvency Resolution Process (CIRP). The operational creditor claimed that the corporate debtor defaulted on payments for the supply of air conditioners. The corporate debtor acknowledged the outstanding debt but cited financial distress and inability to commit to a payment schedule.

## Facts

M/S Adonis Electronics Pvt. Ltd. (Operational Creditor) supplied split AC and Window AC to M/S Saka Ltd. (Corporate Debtor) between April 6, 2018, and June 30, 2018, based on purchase orders. Sales invoices were raised between April 10, 2018, and September 25, 2018, totaling Rs. 13,30,662/-. The Corporate Debtor failed to make payments. The Operational Creditor sent reminders on July 12, 2019, and September 3, 2019. The Corporate Debtor acknowledged the invoice on September 18, 2019, and confirmed the outstanding balance on April 1, 2019. A demand notice was sent on October 9, 2019. The Corporate Debtor admitted the debt in its reply dated January 23, 2020, but cited financial distress. The relevance of these facts lies in establishing the existence of an operational

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## Issues and analysis

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

**Ratio:** Section 4 of the IBC specifies the minimum threshold for triggering insolvency

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**Reasoning:** The court determined that the outstanding debt of Rs. 13,30,662/- clearly exceeded the

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**Interpretation:** Section 4 sets the financial limit for initiating CIRP, ensuring that only

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**Application:** In this case, the outstanding debt was Rs. 13,30,662/-, which is well above the

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## Parties

- **Judges:** P.S.N. P…; V.K. SUB…
- **Appellants:** M/s. Adonis…
- **Respondents:** M/s. Saka…
- **Advocates:** Zeshan…

## Timeline

- **2018-04-06 — Purchase Order…**: Corporate Debtor placed purchase orders with Operational Creditor for split AC and Window…
- **2018-06-30 — Purchase Order…**: Corporate Debtor placed purchase orders with Operational Creditor for split AC and Window…

## 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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