# In the matter of Saubhagya Ornaments Pvt. Ltd. (IB) 114 (ND) 2018

> NCLT judgment dated 2019-03-13. Citation: TCN-2019-NCLT-04442. The case involves an application by SRS Limited, an Operational Creditor, to initiate the…

- **Court:** NCLT
- **Order date:** 13 Mar 2019
- **Citation:** TCN-2019-NCLT-04442
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/saubhagya-ornaments-pvt-ltd-ib-114-nd-2018-05fde47b

## Summary

### Background

The case involves an application by SRS Limited, an Operational Creditor, to initiate the Corporate Insolvency Resolution Process (CIRP) against Saubhagya Ornaments Pvt. Ltd., the Corporate Debtor. SRS Limited claimed that it supplied gold jewellery to Saubhagya Ornaments on mutually agreed terms, and various invoices were raised starting from 2009. Despite maintaining a running account, the Corporate Debtor only made partial payments, with the last payment made on November 29, 2017, leaving an outstanding liability of Rs. 66,19,17,188/- exclusive of interest. The Operational Creditor issued a notice under Section 8 of the IBC on December 28, 2017, which was not replied to, leading to the filing of the present petition.

## Facts

SRS Limited, the Operational Creditor, supplied gold jewellery to Saubhagya Ornaments Pvt. Ltd., the Corporate Debtor, based on mutually accepted terms. Invoices were raised starting from June 3, 2009, and a running account was maintained. The Corporate Debtor made only partial payments, with the last payment on November 29, 2017, leaving an outstanding liability of Rs. 66,19,17,188/- exclusive of interest. A notice under Section 8 of the IBC was issued on December 28, 2017, but received no response. The Corporate Debtor, through its advocate, admitted the outstanding liability but cited financial difficulties. The Corporate Debtor accepted that a default in payment had occurred. The Operational Creditor filed a petition in the required format with a supporting

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## Issues and analysis

### Issue 1: Whether the application for initiation of Corporate Insolvency Resolution Process by the …

**Ratio:** Section 9 of the IBC allows an operational creditor to initiate CIRP against a corporate

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**Reasoning:** The court noted that the Corporate Debtor admitted the outstanding liability and accepted

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**Interpretation:** Section 9 of the IBC provides a mechanism for operational creditors to recover

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**Application:** The court applied the ratio to the facts by noting the Corporate Debtor's

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## Parties

- **Judges:** Ina Mal…
- **Appellants:** M/s SRS L…
- **Respondents:** Saubhagya…; M/s Saubhagya…
- **Advocates:** Samaksh…; Aditya…

## Timeline

- **2009-06-03 — First In…**: Various invoices were raised for which the Operational Creditor maintained a running…
- **2017-11-29 — Last Pay…**: The Corporate Debtor made the last payment leaving the outstanding liability as…

## 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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