# In the matter of SPS Steels Limited CP(IB)No.1342-KB-2018

> NCLT judgment dated 2019-03-29. Citation: TCN-2019-NCLT-04259. The case involves an application under Section 9 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 29 Mar 2019
- **Citation:** TCN-2019-NCLT-04259
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sps-steels-limited-cpibno1342-kb-2018-088db20e

## Summary

### Background

The case involves an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, filed by Jai Balaji Industries Limited (Operational Creditor) against SPS Steels Limited (Corporate Debtor) to initiate the Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed that the Corporate Debtor defaulted in paying an operational debt of Rs. 6,79,26,818/-. The Operational Creditor stated that they supplied material to the Corporate Debtor between 2005 and 2008 and raised invoices, but the Corporate Debtor failed to pay the outstanding amount. The debt became due on 16.12.2013. A demand notice was sent on 25.06.2018, but the Corporate Debtor did not reply or pay the amount.

## Facts

Jai Balaji Industries Limited (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against SPS Steels Limited (Corporate Debtor). The Operational Creditor claimed that the Corporate Debtor defaulted on an operational debt of Rs. 6,79,26,818/-. The Operational Creditor supplied material to the Corporate Debtor between 2005 and 2008, raising invoices for the same. The Corporate Debtor failed to pay the full amount, leaving a balance due. The debt became due on 16.12.2013. The Operational Creditor sent a demand notice on 25.06.2018, which the Corporate Debtor did not reply to or pay. The Corporate Debtor admitted the debt in an affidavit. The Operational Creditor produced evidence, including an affidavit stating that

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## Issues and analysis

### Issue 1: Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, filed by the …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016, allows an operational creditor to

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**Reasoning:** The court noted that the Corporate Debtor admitted the debt and its default. The

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**Interpretation:** Section 9 of the IBC provides a mechanism for operational creditors to recover

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**Application:** The court applied Section 9 of the IBC to the facts of the case, finding that

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## Parties

- **Judges:** Madan B.…
- **Appellants:** Jai Balaji…
- **Respondents:** SPS Steels…
- **Advocates:** Shreeradha…; Shivangi…

## Timeline

- **2005-01-01 — Supply of M…**: The Operational Creditor supplied material to…
- **2008-12-31 — Supply of M…**: The Operational Creditor supplied material to…

## 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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