# In the matter of Sanjay Insecticides Private Limited C.P. No. 3147-I&BP-2019

> NCLT judgment dated 2019-11-14. Citation: TCN-2019-NCLT-00593. Eroma Petrochemicals Private Limited filed a petition under Section 8 and 9 of the IBC, 2016,…

- **Court:** NCLT
- **Order date:** 14 Nov 2019
- **Citation:** TCN-2019-NCLT-00593
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sanjay-insecticides-private-limited-cp-no-3147-ibp-2019-98fc68e8

## Summary

### Background

Eroma Petrochemicals Private Limited filed a petition under Section 8 and 9 of the IBC, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Sanjay Insecticides Private Limited, alleging default in payment.

## Facts

Eroma Petrochemicals Private Limited (Petitioner) supplied chemicals to Sanjay Insecticides Private Limited (Corporate Debtor) during 2016, raising invoices for Rs. 33,62,799. The Corporate Debtor made a partial payment of Rs. 98,398, leaving a balance principal due of Rs. 32,64,401. The Petitioner sent a demand notice on 2019-06-04 demanding Rs. 48,56,207, which included interest at 18% p.a. The demand notice was returned as 'refused'. Cheques issued by the Corporate Debtor for Rs. 14,00,000 and Rs. 13,50,000 were dishonored due to insufficient funds, leading the Petitioner to initiate proceedings under the Negotiable Instruments Act. The Petitioner claimed entitlement to 18% interest under the MSME Act, 2006.

## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a …

**Ratio:** The debt and default must be established

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**Reasoning:** The court reviewed the invoices, demand notice, and dishonored cheques, and considered

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**Interpretation:** The IBC requires the establishment of a debt and default as a prerequisite for

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**Application:** The court found that the Petitioner had provided sufficient evidence to

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## Parties

- **Judges:** SUCHITRAKAN…; V. Nallasen…
- **Appellants:** Eroma Petrochemica…
- **Respondents:** Sanjay Insecticide…

## Timeline

- **2016-01-01 — Supply of Ch…**: Petitioner supplied chemicals to the Corporate Debtor and raised invoices during the year…
- **2019-06-04 — Demand Noti…**: Petitioner sent demand notice under Section 8 of the Code demanding a sum of Rs.…

## Legal provisions

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

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