# In the matter of Tara Chand Rice Mills Pvt. Ltd. CP (IB) No. 121-CHD-HRY-2017

> NCLT judgment dated 2018-03-16. Citation: TCN-2018-NCLT-01692. The petitioner, Brij Lal Ashok Kumar, an operational creditor, initiated a corporate insolvency…

- **Court:** NCLT
- **Order date:** 16 Mar 2018
- **Citation:** TCN-2018-NCLT-01692
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/tara-chand-rice-mills-pvt-ltd-cp-ib-no-121-chd-hry-2017-29f9a09b

## Summary

### Background

The petitioner, Brij Lal Ashok Kumar, an operational creditor, initiated a corporate insolvency resolution process against the respondent, Tara Chand Rice Mills Pvt. Ltd., under Section 9 of the Insolvency and Bankruptcy Code, 2016. The petitioner claimed that the respondent failed to pay an outstanding debt of ₹2,23,89,593/- as of 27.07.2017 for paddy supplied between 21.10.2014 and 03.01.2016. The petitioner issued a demand notice on 05.09.2017, which was delivered on 07.09.2017. The respondent alleged a dispute regarding the quality of the paddy supplied, claiming that a portion of the paddy was of inferior quality and rejected. The petitioner rectified defects in the application as pointed out by the NCLT.

## Facts

Brij Lal Ashok Kumar, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate a corporate insolvency resolution process (CIRP) against Tara Chand Rice Mills Pvt. Ltd., the corporate debtor. The operational creditor claimed an outstanding debt of ₹2,23,89,593/- as of 27.07.2017, arising from the supply of paddy between 21.10.2014 and 03.01.2016. A demand notice was issued on 05.09.2017 and delivered on 07.09.2017. The corporate debtor alleged a dispute regarding the quality of the paddy supplied, claiming that 24 bills out of 54 were of inferior quality and contained high moisture, leading to rejection. The corporate debtor claimed that the rejected goods worth ₹1,71,02,402/- were sold for ₹46,00,000/-, and

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## Issues and analysis

### Issue 1: Whether the requirements of Section 9(1) to (3) of the Insolvency and Bankruptcy Code, 2016, are …

**Ratio:** Section 9 of the IBC outlines the conditions for initiating CIRP by an operational

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**Reasoning:** The NCLT found that the petitioner had complied with the requirements of Section 9(1) to

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**Interpretation:** Section 9 of the IBC sets out the mandatory conditions that must be met before

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**Application:** In this case, the petitioner satisfied all the requirements of Section 9(1) to

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## Parties

- **Judges:** R.P.Nag…; Pradeep R.…
- **Appellants:** Brij Lal Ashok…
- **Respondents:** TARA CHAND RICE…; Tara Chand Rice…

## Timeline

- **2014-10-21 — Supply of Paddy…**: The petitioner started…
- **2016-01-03 — Supply of Pad…**: The petitioner stopped…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(6) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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