# In the matter of The Sirpur Paper Mills Ltd. CP (IB) No. 52-10-HDB-2017

> NCLT judgment dated 2017-09-18. Citation: TCN-2017-NCLT-00400. The case originates from a Company Petition (CP(IB) No. 52/9/HDB/2017) filed by M/s Rama Road…

- **Court:** NCLT
- **Order date:** 18 Sept 2017
- **Citation:** TCN-2017-NCLT-00400
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/the-sirpur-paper-mills-ltd-cp-ib-no-52-10-hdb-2017-afd57a14

## Summary

### Background

The case originates from a Company Petition (CP(IB) No. 52/9/HDB/2017) filed by M/s Rama Road Lines and others (Operational Creditors) under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rule 6 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The petitioners sought to initiate the Corporate Insolvency Resolution Process (CIRP) against Sirpur Paper Mills Limited (Corporate Debtor). The operational creditor, M/s Rama Road Lines, along with its entities, provided services such as transportation of furnace oil and coal feeding to boilers. When the respondent failed to pay outstanding dues, the petitioner issued three demand notices. The respondent, Sirpur Paper Mills, acknowledged its financial difficulties,

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## Facts

M/s Rama Road Lines and associated entities (Reliable Industrial Equipment Services, Reliable Paper Products) provided services to Sirpur Paper Mills Ltd, including transportation of furnace oil and coal feeding to boilers. Sirpur Paper Mills failed to pay a total of Rs. 51,86,975 for these services. The Operational Creditor issued three demand notices dated February 6, 2017, to Sirpur Paper Mills. Sirpur Paper Mills acknowledged the debt but stated that they had stopped production in September 2014 due to financial difficulties. Lenders had initiated recovery proceedings under the SARFAESI Act, 2002, and taken possession of the factory. Sirpur Paper Mills had also filed a reference before BIFR. The Operational Creditor argued that they had fulfilled all conditions

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## Issues and analysis

### Issue 1: Whether the Petitioner has fulfilled the requisite conditions as prescribed under Section 9 of the …

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

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**Reasoning:** The court was convinced that the Petitioner fulfilled the requisite conditions as

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**Interpretation:** Section 9 of the IBC is interpreted to mean that if a debt exists, a demand

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**Application:** The court applied the provisions of Section 9 to the facts of the case, noting

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## Parties

- **Judges:** Rajeswara Rao…; RavikumarDu…
- **Appellants:** M/s Rama Road…
- **Respondents:** Sirpur Paper…; The Sirpur Paper…

## Timeline

- **2014-09-01 — Productio…**: Sirpur Paper Mills stopped…
- **2016-10-01 — SARFAESI…**: Lenders initiated recovery proceedings under SARFAESI Act and took possession of the…

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