# In the matter of Sri Varadaraja Food Exports Private Limited

> NCLT judgment dated 2020-02-11. Citation: TCN-2020-NCLT-02003. The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 11 Feb 2020
- **Citation:** TCN-2020-NCLT-02003
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sri-varadaraja-food-exports-private-limited-691ba107

## Summary

### Background

The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by M/s. Disha Communications Private Limited (Operational Creditor) against M/s. Sri Varadaraja Food Exports Private Limited (Corporate Debtor). The Operational Creditor claimed an operational debt of Rs. 2,74,86,933/- arising from airtime advertisement services provided to the Corporate Debtor. The application seeks to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, declare a moratorium, and appoint an Interim Resolution Professional (IRP).

## Facts

M/s. Disha Communications Private Limited (Operational Creditor) provided airtime advertisement services to M/s. Sri Varadaraja Food Exports Private Limited (Corporate Debtor). The Operational Creditor claimed an operational debt of Rs. 2,74,86,933/- as of 22.03.2018. A Letter of Agreement dated 08.07.2016 stipulated that bills raised by the Operational Creditor were to be paid within 30 days, with objections to be made within 7 days of receipt. The Corporate Debtor defaulted on payments. The Operational Creditor issued a Notice of Termination dated 17.04.2019. A Demand Notice under Section 8 of the I&B Code was issued on 05.06.2019. The Operational Creditor filed an affidavit stating that no notice of dispute was received regarding the unpaid operational debt. The

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor under Section 9 of the Insolvency and …

**Ratio:** Section 9(5) of the IBC, 2016 states that the Adjudicating Authority may admit the

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**Reasoning:** The court noted that the Corporate Debtor did not file a reply to the application and

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**Interpretation:** Section 9 of the IBC allows an operational creditor to initiate CIRP against a

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**Application:** The court found that the application was complete and that there was no dispute

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## Parties

- **Judges:** R. VARADH…; Anil Ku…
- **Appellants:** DISHA COMMUNICATIO…
- **Respondents:** Varadaraja Food…; VARADARAJA FOOD…
- **Advocates:** C.T. Muru…; Keerthikiran…

## Timeline

- **2016-07-08 — Letter of Ag…**: Letter of Agreement between the Operational Creditor and Corporate Debtor stipulating…
- **2018-03-22 — Operational De…**: Operational debt of Rs. 2,74,86,933/- claimed by…

## 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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