# In the matter of Ucal Fuel Systems Limited IBA-364-2020

> NCLT judgment dated 2021-04-29. Citation: TCN-2021-NCLT-02257. M/s. Primee Silicones (Chennai) Private Limited, the Operational Creditor, filed an application…

- **Court:** NCLT
- **Order date:** 29 Apr 2021
- **Citation:** TCN-2021-NCLT-02257
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ucal-fuel-systems-limited-iba-364-2020-ea4b4fc7

## Summary

### Background

M/s. Primee Silicones (Chennai) Private Limited, the Operational Creditor, filed an application under Section 9 of the I&B Code, 2016, read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Ucal Fuel Systems Limited, the Corporate Debtor. The Operational Creditor claimed that the Corporate Debtor defaulted on a total outstanding debt of Rs. 13,24,275, comprising a principal amount of Rs. 8,03,815 and interest of Rs. 5,20,460 at 24% per annum. The Operational Creditor is in the business of manufacturing metal forming fluid, lubricant oil, and industrial oil, and supplied 'Die Coat' material to the Corporate Debtor, for which tax invoices were raised.

## Facts

M/s. Primee Silicones (Chennai) Private Limited (Operational Creditor) filed an application under Section 9 of the I&B Code, 2016, to initiate CIRP against M/s. Ucal Fuel Systems Limited (Corporate Debtor). The Operational Creditor claimed a default of Rs. 13,24,275, including principal (Rs. 8,03,815) and interest (Rs. 5,20,460 at 24% per annum), due on 08.11.2019. The Operational Creditor supplied 'Die Coat' material to the Corporate Debtor. The Corporate Debtor contended that 17 out of 25 invoices were time-barred. The Operational Creditor furnished a ledger account showing payments received and outstanding debt. The Corporate Debtor argued the account was not a 'running account'. The Operational Creditor adjusted payments towards interest dues. The Corporate

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## Issues and analysis

### Issue 1: Whether the application under Section 9 of the I&B Code, 2016, for initiation of CIRP against …

**Ratio:** The application under Section 9 of the I&B Code, 2016, is maintainable if the

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**Reasoning:** The court reasoned that 17 out of 25 invoices were beyond the period of limitation. The

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**Interpretation:** Section 9 of the I&B Code, 2016, requires the operational debt to be within

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**Application:** In this case, the court found that a significant portion of the debt was

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## Parties

- **Judges:** R. Sucha…; B. Anil…
- **Appellants:** Primee Silicones…
- **Respondents:** Ucal Fuel Systems…

## Timeline

- **2015-04-29 — Earliest Invo…**: The Operational Creditor…
- **2018-10-23 — Default in…**: Date of default in payment…

## 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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