# In the matter of Scotts Garments Limited CP (IB) No. 68-BB-2018

> NCLT judgment dated 2018-08-13. Citation: TCN-2018-NCLT-00945. The case originates from an application filed by Saravana Distributors, an operational…

- **Court:** NCLT
- **Order date:** 13 Aug 2018
- **Citation:** TCN-2018-NCLT-00945
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/scotts-garments-limited-cp-ib-no-68-bb-2018-fb526651

## Summary

### Background

The case originates from an application filed by Saravana Distributors, an operational creditor, under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Scotts Garments Ltd., the corporate debtor. The operational creditor claimed that the corporate debtor defaulted on payments for dyes and chemicals supplied between November 2015 and December 2016. A demand notice was issued, but the corporate debtor did not respond.

## Facts

Saravana Distributors, the operational creditor, supplied dyes and chemicals to Scotts Garments Limited, the corporate debtor, between November 30, 2015, and December 31, 2016. The invoices for these supplies stipulated that payments were due within a certain number of days, with a 24% interest charge for payments made after 30 days from the invoice date. Scotts Garments Limited defaulted on payments, leading to an outstanding principal and interest amount of Rs. 11,95,865. Saravana Distributors issued a demand notice dated November 6, 2017, under Section 8 of the IBC, demanding payment of the outstanding amount along with interest. Scotts Garments Limited did not respond to the demand notice. Saravana Distributors then filed a company petition under Section 9 of the

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## Issues and analysis

### Issue 1: Whether the application filed by the operational creditor, Saravana Distributors, meets the …

**Ratio:** Section 9 of the IBC, 2016, outlines the procedure for an operational creditor to

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**Reasoning:** The court considered the documents and pleadings filed by the operational creditor,

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**Interpretation:** Section 9 of the IBC is interpreted to mean that if an operational creditor

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**Application:** In this case, the operational creditor provided evidence of unpaid invoices,

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## Parties

- **Judges:** Rajeshwara Rao…; Ashok Kumar…
- **Appellants:** Saravana Distribut…
- **Respondents:** Scotts Garments…; M/s. Scotts…

## Timeline

- **2002-03-01 — Incorporation of…**: M/s Scotts Garments Limited…
- **2015-11-30 — Start of…**: The Operational Creditor started supplying dyes…

## 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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