# In the matter of Solven Power Systems (IB)2413(ND)-2109

> NCLT judgment dated 2020-02-18. Citation: TCN-2020-NCLT-01902. M/S Imperial Fastners Private Limited filed a petition under Section 9 of the Insolvency &…

- **Court:** NCLT
- **Order date:** 18 Feb 2020
- **Citation:** TCN-2020-NCLT-01902
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/solven-power-systems-ib2413nd-2109-14fa471a

## Summary

### Background

M/S Imperial Fastners Private Limited filed a petition under Section 9 of the Insolvency & Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, M/S Solven Power Systems, due to its inability to liquidate its operational debt. The Corporate Debtor had entered into an Operation and Management Agreement with the Operational Creditor on April 18, 2018, to provide operation and management services for a Captive Power Plant. The Corporate Debtor was responsible for the operations of the project from December 1, 2017, for a period of nine years. The Operational Creditor claimed that the Corporate Debtor failed to provide a Bank Guarantee as per the agreement and breached the agreement by making false

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## Facts

M/S Imperial Fastners Private Limited (Operational Creditor) and M/S Solven Power Systems (Corporate Debtor) entered into an Operation and Management Agreement dated April 18, 2018, for the operation and management of a Captive Power Plant. The Corporate Debtor was to provide operation and management services from December 1, 2017, for nine years. The Operational Creditor claimed that the Corporate Debtor failed to provide a Bank Guarantee of Rs. 25,00,000/- as per the agreement. The Corporate Debtor was to pay the Operational Creditor Rs. 25,00,000/- per month. The Operational Creditor alleged that the Corporate Debtor defaulted on payments from December 2017 to June 2018, totaling Rs. 1,00,00,000/- plus interest. The Operational Creditor issued a demand notice on

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## Issues and analysis

### Issue 1: Whether the present petition filed under Section 9 of the Insolvency & Bankruptcy Code, 2016 is …

**Ratio:** The petition under Section 9 is maintainable if the operational debt exists, is due and

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**Reasoning:** The Adjudicating Authority found that the Corporate Debtor did not reply to the demand

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**Interpretation:** Section 9 of the IBC allows an operational creditor to initiate CIRP if there

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**Application:** The Adjudicating Authority determined that the conditions for maintainability

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## Parties

- **Judges:** ABNI RANJAN KUMAR…; K.K. V…
- **Appellants:** M/s. Imperial…
- **Respondents:** M/S SOLVEN POWER…

## Timeline

- **2018-04-18 — Agreement…**: Operation and Management Agreement between M/S Imperial Fastners Private Limited and M/S…
- **2017-12-01 — Effective Date of…**: M/S Solven Power Systems was responsible for the…

## 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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