# In the matter of S.R. Industries Ltd. CP (IB) No. 305-Chd-Pb-2019

> NCLT judgment dated 2021-03-05. Citation: TCN-2021-NCLT-02795. The case originates from a petition filed under Section 9 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 5 Mar 2021
- **Citation:** TCN-2021-NCLT-02795
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sr-industries-ltd-cp-ib-no-305-chd-pb-2019-74c28be1

## Summary

### Background

The case originates from a petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by Sh. Jaspal Singh, proprietor of M/s Creative Arts (Operational Creditor), against S.R. Industries Ltd. (Corporate Debtor), seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed a default of ₹42,88,694/-. The Corporate Debtor is a company incorporated on 19.07.1989. The Operational Creditor supplied footwear packaging boxes to the Corporate Debtor during 2016-17 to 2018-19, amounting to ₹91,71,345/-, out of which ₹69,68,889/- was received, leaving the default amount.

## Facts

Sh. Jaspal Singh, proprietor of M/s Creative Arts, filed a petition against S.R. Industries Ltd. under Section 9 of the Insolvency and Bankruptcy Code, 2016. M/s Creative Arts, an operational creditor, supplied footwear packaging boxes to S.R. Industries Ltd. from 2016-17 to 2018-19, totaling ₹91,71,345. S.R. Industries Ltd. paid ₹69,68,889, leaving an outstanding debt of ₹42,88,694, which became due on 31.03.2019. A demand notice dated 02.05.2019 was served on S.R. Industries Ltd., which replied on 07.05.2019, admitting the liability. The operational creditor stated that no notice regarding any pre-existing dispute or arbitration was received. The corporate debtor failed to comply with the demand notice. The authorized share capital of the corporate debtor is

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## Issues and analysis

### Issue 1: Whether the demand notice in Form 3/4 …

**Ratio:** The demand notice must be served at the registered address of the corporate debtor to

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**Reasoning:** The court noted that the demand notice dated 02.05.2019 was sent to the address mentioned

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**Interpretation:** Proper service of demand notice is a prerequisite for initiating CIRP under

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**Application:** The demand notice was sent to the correct address of the corporate debtor,

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## Parties

- **Judges:** Ajay Kumar…; RAGHU N…; +1 more
- **Appellants:** Sh. Jaspal…
- **Respondents:** S.R. Industries…

## Timeline

- **1989-07-19 — Incorporation of…**: S.R. Industries Limited was…
- **2016-01-01 — Supply of…**: The Operational Creditor supplied footwear packaging boxes to the Corporate Debtor during…

## Legal provisions

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

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