# In the matter of Shree Murugan Flour Mills Private Limited CP-636-IB-2018

> NCLT judgment dated 2020-01-31. Citation: TCN-2020-NCLT-02110. The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 31 Jan 2020
- **Citation:** TCN-2020-NCLT-02110
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shree-murugan-flour-mills-private-limited-cp-636-ib-2018-f08f1f39

## Summary

### Background

The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by ADM Agro Industries India Private Limited (Operational Creditor) against Shree Murugan Flour Mills Private Limited (Corporate Debtor) for initiating the Corporate Insolvency Resolution Process (CIRP). The operational debt arose from the supply of wheat by the Operational Creditor to the Corporate Debtor, with an outstanding amount of ₹2,27,71,221 along with interest. The Corporate Debtor claimed a dispute regarding the quality of the supplied wheat, which the Operational Creditor denied receiving any prior notice of. The application was filed due to the Corporate Debtor's failure to pay the outstanding dues.

## Facts

ADM Agro Industries India Private Limited (Operational Creditor) supplied 2000 MT of Mill quality Wheat to Shree Murugan Flour Mills Private Limited (Corporate Debtor) under Contract No. WTBTBS/10 dated 10.08.2016. The wheat was delivered on 16.08.2016 for a total value of ₹4,24,20,000. The Corporate Debtor made payments totaling ₹1,96,48,779 by 27.04.2017, leaving a balance of ₹2,27,71,221. The Operational Creditor issued a demand notice dated 16.08.2017, which was delivered on 19.08.2017, for the outstanding amount. The Corporate Debtor claimed a dispute regarding the quality of the wheat, alleging it was communicated to the Operational Creditor via letters dated 18.08.2016 and 21.09.2016. The Operational Creditor denied receiving these letters and disputed the

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor under Section 9 of the Insolvency and …

**Ratio:** Section 9(5) of the IBC states that the Adjudicating Authority shall, within fourteen

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**Reasoning:** The Tribunal examined the application and found it to be complete. The Tribunal then

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

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**Application:** In this case, the Tribunal found that the Operational Creditor had proven the

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## Parties

- **Judges:** R. VARADH…; Anil Ku…
- **Appellants:** ADM Agro Industrie…
- **Respondents:** Shree Murugan…

## Timeline

- **2016-08-10 — Contract…**: Contract No. WTBTBS/10 was entered between the Operational Creditor and Corporate Debtor…
- **2016-08-16 — Delivery of…**: Wheat was delivered to the Corporate…

## 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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