# In the matter of Sapphire Equities Private Limited C.P.(IB) No. 105-KB-2018

> NCLT judgment dated 2019-07-10. Citation: TCN-2019-NCLT-02602. The case involves an application for the initiation of a corporate insolvency resolution…

- **Court:** NCLT
- **Order date:** 10 Jul 2019
- **Citation:** TCN-2019-NCLT-02602
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sapphire-equities-private-limited-cpib-no-105-kb-2018-c914c531

## Summary

### Background

The case involves an application for the initiation of a corporate insolvency resolution process filed by Gandhar Oil Refinery (India) Limited, the Operational Creditor, against Sapphire Equities Private Limited, the Corporate Debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Operational Creditor alleged a default in payment of Rs. 3,07,21,702/- along with interest. The NCLT initially rejected the application, but NCLAT set aside the order and remitted the matter back to NCLT for admission of the application.

## Facts

Gandhar Oil Refinery (India) Limited, the Operational Creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Sapphire Equities Private Limited, the Corporate Debtor, alleging a default in payment of Rs. 3,07,21,702/- along with interest at 18% p.a. The NCLT initially rejected the application, stating that the Operational Creditor failed to prove the delivery of the demand notice and that a pre-existing dispute existed regarding the quality of goods and the amount payable. The Operational Creditor appealed to the NCLAT, which set aside the NCLT's order and remitted the matter back to the NCLT. The NCLAT observed that the demand notice was duly served and that there was no dispute with regard to Rs. 1 crore. It was also noted

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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:** The application under Section 9 can be admitted if the operational debt exists, a default

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**Reasoning:** The NCLAT set aside the initial rejection by NCLT, observing that the demand notice was

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**Interpretation:** Section 9 of the IBC allows an operational creditor to initiate CIRP if a debt

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**Application:** In this case, the NCLAT's findings that the demand notice was served and that

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## Parties

- **Judges:** Jinan…; Harish Chander…
- **Appellants:** Gandhar Oil…
- **Respondents:** Sapphire Equities…
- **Advocates:** Rakhi Purni…

## Timeline

- **2018-08-08 — Initial Rejection by…**: NCLT rejected the application…
- **2019-03-15 — NCLAT Or…**: NCLAT set aside the NCLT's order and…

## 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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