# In the matter of Southern Batteries C.P. (IB)No.116-BB-2019

> NCLT judgment dated 2019-07-05. Citation: TCN-2019-NCLT-02651. FedEx Trade Networks Transport and Brokerage Pvt. Ltd. filed CP(IB)No.116/BB/2019 under Section…

- **Court:** NCLT
- **Order date:** 5 Jul 2019
- **Citation:** TCN-2019-NCLT-02651
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/southern-batteries-cp-ibno116-bb-2019-9c54cece

## Summary

### Background

FedEx Trade Networks Transport and Brokerage Pvt. Ltd. filed CP(IB)No.116/BB/2019 under Section 9 of the IBC, 2016, seeking to initiate Corporate Insolvency Resolution Process against Southern Batteries, alleging a default of Rs. 10,02,653.20/-. FedEx, an international freight forwarding service provider, claimed Southern Batteries, a manufacturer of lead-acid tubular batteries, had defaulted on payments for logistics support services. The case was listed for admission on multiple dates, but the parties eventually filed a Joint Memo stating that they had settled the issue.

## Facts

FedEx Trade Networks Transport and Brokerage Pvt. Ltd. (FedEx) filed a petition under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, against Southern Batteries, alleging a default of Rs. 10,02,653.20/-. FedEx provided international freight forwarding services to Southern Batteries, a manufacturer of lead-acid tubular batteries. Southern Batteries requested logistics support from FedEx for delivering goods, and invoices were raised for these services. While Southern Batteries made some account payments, a balance of Rs. 9,37,177.95/- remained outstanding. Despite repeated requests, Southern Batteries failed to clear the dues. Subsequently, both parties filed a Joint Memo stating that they had amicably settled the matter. Southern Batteries proposed to pay

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## Issues and analysis

### Issue 1: Whether the Corporate Insolvency Resolution Process should be initiated against Southern Batteries …

**Ratio:** The initiation of CIRP is contingent upon the existence of a debt and default. However,

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**Reasoning:** The court noted that the parties had filed a Joint Memo indicating a settlement. The

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**Interpretation:** The IBC allows for the initiation of CIRP upon the occurrence of a default.

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**Application:** In this case, the court did not proceed with the initiation of CIRP because the

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## Parties

- **Judges:** Rajeswara Rao…; Ashok Kumar…
- **Appellants:** M/s. FedEx Trade…
- **Respondents:** M/s. Southern…

## Timeline

- **2019-03-20 — Case Listed for…**: The case was listed for…
- **2019-04-02 — Case Listed for…**: The case was listed for…

## 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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