# In the matter of Sangam Handicraft Private Limited Company Petition No. (IB)- 24-9-JPR-2019

> NCLT judgment dated 2019-09-25. Citation: TCN-2019-NCLT-01255. Sangam Silver Arts LLP filed an application under Section 9 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 25 Sept 2019
- **Citation:** TCN-2019-NCLT-01255
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sangam-handicraft-private-limited-company-petition-no-ib-24-9-jpr-2019-65eea305

## Summary

### Background

Sangam Silver Arts LLP filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Sangam Handicraft Private Limited, claiming to be an Operational Creditor seeking initiation of Corporate Insolvency Resolution Process (CIRP). The applicant supplied silver utensils to the corporate debtor, raising invoices in 2015 and 2016. An agreement was executed on 16.08.2016, where the corporate debtor agreed to pay a negotiated amount of Rs. 1,91,29,000/- with 15% interest in 36 monthly installments. Cheques issued by the corporate debtor were dishonored, leading to the applicant filing a complaint under Section 138 of the Negotiable Instruments Act, 1881. A Section 8 notice under the Insolvency and Bankruptcy Code, 2016 was issued on 28.09.2018 for

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## Facts

Sangam Silver Arts LLP (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Sangam Handicraft Private Limited (Corporate Debtor) for initiating Corporate Insolvency Resolution Process (CIRP). The Operational Creditor supplied silver utensils to the Corporate Debtor in 2015 and 2016, raising invoices for the same. An agreement was executed on 16.08.2016, where the Corporate Debtor agreed to pay Rs. 1,91,29,000/- with 15% interest in 36 monthly installments. The Corporate Debtor issued 36 cheques from 05.09.2016 to 05.08.2019 for Rs. 6,63,113 each. Some cheques were honored between 05.09.2016 and 05.04.2017, but others falling due from 05.04.2017 to 05.09.2018 were dishonored due to 'Fund Insufficient'. A

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## Issues and analysis

### Issue 1: Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, for initiating …

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

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**Reasoning:** The Tribunal found that the Corporate Debtor had defaulted on payments and no dispute

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

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**Application:** The application was deemed maintainable because Sangam Silver Arts LLP, as an

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## Parties

- **Judges:** POONDLA BHASKARA…; RAGHU N…; +1 more
- **Appellants:** Sangam Silver…
- **Respondents:** Sangam Handicraft…
- **Advocates:** SANDEEP KUM…

## Timeline

- **2015-01-01 — Invoices…**: Sangam Silver Arts LLP raised invoices against Sangam Handicraft Private Limited for the…
- **2016-01-01 — Invoices…**: Sangam Silver Arts LLP raised invoices against Sangam Handicraft Private Limited for the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 138 — Discharge order](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-138)

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