# In the matter of Shree Hanuman Texfab Pvt. Ltd. CP(IB)-1625(MB)-2018

> NCLT judgment dated 2020-02-14. Citation: TCN-2020-NCLT-01950. The case involves a Company Petition filed under Section 9 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 14 Feb 2020
- **Citation:** TCN-2020-NCLT-01950
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shree-hanuman-texfab-pvt-ltd-cpib-1625mb-2018-ecdeb6fa

## Summary

### Background

The case involves a Company Petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by J B Ecotex LLP (Operational Creditor) against Shree Hanuman Texfab Pvt Ltd (Corporate Debtor). The Operational Creditor claims that they supplied Polyester Staple Fibre to the Corporate Debtor, for which invoices were raised and acknowledged. The Corporate Debtor allegedly failed to make payments against these invoices, leading to the filing of the petition for initiation of the Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor contested the petition, citing quality issues with the supplied materials and the existence of a dispute.

## Facts

J B Ecotex LLP (Operational Creditor) filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Shree Hanuman Texfab Pvt Ltd (Corporate Debtor), claiming non-payment for Polyester Staple Fibre supplied. The Operational Creditor claimed a total debt of Rs. 91,05,327.63, including Rs. 79,24,592 as per the ledger balance and Rs. 9,55,110.62 related to 'C' forms. The Corporate Debtor issued post-dated cheques that were dishonored. The Corporate Debtor argued that the petition was not maintainable due to quality issues with the supplied materials and that a trade practice existed where blank cheques were issued, and disputes were settled later. The Corporate Debtor contended that the Operational Creditor deposited the cheques without prior

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## Issues and analysis

### Issue 1: Whether the petition under Section 9 of the I&B Code, 2016, is maintainable given the Corporate …

**Ratio:** The ratio decidendi is based on the interpretation of 'dispute' as defined under the

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**Reasoning:** The court reasoned that the Corporate Debtor's reliance on the Mobilox Innovations case

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**Interpretation:** The interpretation of 'dispute' under the I&B Code requires a substantive

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**Application:** In this case, the Corporate Debtor's claim of quality issues was not supported

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## Parties

- **Judges:** Smt Suchitra…; V. Nallasen…
- **Appellants:** JB Ecote…; J B Ecote…
- **Respondents:** Shree Hanuman…

## Timeline

- **2018-11-01 — Affidavit-in-reply by…**: The Corporate Debtor filed an affidavit-in-reply stating that the Company petition is…
- **2017-12-26 — Demand Noti…**: Demand Notice issued by the Operational…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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