# In the matter of Shirt Company (India) Private Limited C.P. (IB) 2534-MB-2019

> NCLT judgment dated 2020-02-26. Citation: TCN-2020-NCLT-01807. Himgiri Textiles filed a Company Petition under Section 8 & 9 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 26 Feb 2020
- **Citation:** TCN-2020-NCLT-01807
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shirt-company-india-private-limited-cp-ib-2534-mb-2019-61acff40

## Summary

### Background

Himgiri Textiles filed a Company Petition under Section 8 & 9 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Shirt Company (India) Private Limited. The petition alleges that the Corporate Debtor defaulted on a payment of ₹84,31,461/- along with future interest at 24% p.a. The Petitioner, a proprietorship firm, supplied various types of fabrics to the Corporate Debtor worth ₹92,11,603/- and raised several invoices. After deductions, a balance of ₹84,31,461/- remained unpaid.

## Facts

Himgiri Textiles, a proprietorship firm, supplied fabrics worth ₹92,11,603/- to Shirt Company (India) Private Limited. After deductions, ₹84,31,461/- remained unpaid. Himgiri Textiles issued a demand notice on 07.05.2019 under Section 8 of the I&B Code, 2016, for the outstanding amount plus 24% p.a. interest. Shirt Company (India) Private Limited did not respond. Himgiri Textiles provided copies of purchase orders, invoices, delivery challans, dishonored cheques worth ₹8 lacs, and ledger accounts as evidence. Shirt Company (India) Private Limited admitted liability during the hearing on 11.02.2020. The NCLT found that Shirt Company (India) Private Limited defaulted on payments.

## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor is in compliance with the provisions of …

**Ratio:** Section 8 and 9 of the Insolvency and Bankruptcy Code, 2016, outline the procedure for

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**Reasoning:** The Bench was satisfied that the application filed by the Operational Creditor met the

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**Interpretation:** Sections 8 and 9 of the IBC provide the framework for operational creditors to

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**Application:** The application was deemed compliant as the Operational Creditor provided

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## Parties

- **Judges:** SUCHITRAKAN…; Chandra Bha…
- **Appellants:** Himgiri Te…
- **Respondents:** Shirt Company…

## Timeline

- **2019-07-03 — Petition…**: The Company Petition was…
- **2019-05-07 — Demand Notice…**: The Petitioner issued a Demand Notice in Form…

## 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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