# In the matter of Smartron India Private Limited CP (IB) No. 55-9-HDB-2019

> NCLT judgment dated 2019-09-09. Citation: TCN-2019-NCLT-01514. M/s. ZTE Corporation filed a petition against M/s. Smartron India Private Limited under Section…

- **Court:** NCLT
- **Order date:** 9 Sept 2019
- **Citation:** TCN-2019-NCLT-01514
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/smartron-india-private-limited-cp-ib-no-55-9-hdb-2019-f18390de

## Summary

### Background

M/s. ZTE Corporation filed a petition against M/s. Smartron India Private Limited under Section 9 of the Insolvency and Bankruptcy Code, 2016, alleging default in repaying USD 1,397,166. ZTE Corporation, an operational creditor, claimed Smartron India Private Limited, the corporate debtor, failed to make payments for supplied smart phones as per a Supply Agreement dated 07.12.2017. The operational creditor supplied Tphone units based on purchase orders, with payment terms of 100% through 90 days Letter of Credit from the date of shipment. Disputes arose regarding payment for invoices, leading to the insolvency petition.

## Facts

ZTE Corporation, an operational creditor based in China, filed a petition against Smartron India Private Limited, a corporate debtor, for defaulting on a payment of USD 1,397,166. In 2017, Smartron approached ZTE for the supply of smart phones, leading to a Supply Agreement dated 07.12.2017. Smartron placed purchase orders for Tphone units, with payment terms of 100% through 90 days Letter of Credit from the date of shipment. ZTE supplied 18,800 Tphone units initially, and later, at Smartron's request, 1,200 units were dispatched to Palestine instead of India. ZTE raised invoices, but Smartron failed to make payments. Smartron issued Letters of Credit, but these were rejected by ICICI Bank due to reasons like 'LC Expired' and 'LC Closed'. ZTE submitted documents for

…

## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a …

**Ratio:** The legal principle is that a default occurs when a debt is due and payable but has not

…

**Reasoning:** The court reasoned that the Corporate Debtor failed to make payments for the supplied

…

**Interpretation:** The interpretation of 'default' under the IBC requires a clear establishment of

…

**Application:** The court applied the ratio to the facts by noting that the invoices were

…

## Parties

- **Judges:** Ratakonda…; Ratakonda…
- **Appellants:** M/s. ZTE Corporati…
- **Respondents:** M/s. Smartron…

## Timeline

- **2017-12-07 — Supply Agr…**: Parties entered into a Supply Agreement dated 07.12.2017, wherein the Operational…
- **2017-10-07 — Purchase Orde…**: Corporate Debtor placed Purchase Order dated 07.10.2017 for supply of 20,000 Units of…

## Legal provisions

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

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/smartron-india-private-limited-cp-ib-no-55-9-hdb-2019-f18390de