# In the matter of Ultimo Fabrics Pvt. Ltd. CP No. 2041-I&BP-2018

> NCLT judgment dated 2018-09-07. Citation: TCN-2018-NCLT-00802. The case involves a Company Petition filed by Shanaya Fashions, through its sole proprietor…

- **Court:** NCLT
- **Order date:** 7 Sept 2018
- **Citation:** TCN-2018-NCLT-00802
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ultimo-fabrics-pvt-ltd-cp-no-2041-ibp-2018-71ca27ba

## Summary

### Background

The case involves a Company Petition filed by Shanaya Fashions, through its sole proprietor Rahul Jhaveri, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Ultimo Fabrics Private Limited, the Corporate Debtor. The petition alleges that the Corporate Debtor defaulted on a payment of Rs. 19,86,31,250/- on 17.03.2018. The petition was filed under Sections 8 & 9 of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rule 6 of the Insolvency & Bankruptcy (AAA) Rules, 2016.

## Facts

Shanaya Fashions, through its sole proprietor Rahul Jhaveri, filed a Company Petition to initiate CIRP against Ultimo Fabrics Private Limited, the Corporate Debtor. The petition was filed due to a default in payment amounting to Rs. 19,86,31,250/-. The default occurred on 17.03.2018. Shanaya Fashions supplied fabrics to Ultimo Fabrics during the period 23.09.2017 to 17.03.2018, raising invoices for the same amount. A demand notice was issued on 09.05.2018 under section 8 of the IB Code in Form 3. The Corporate Debtor replied to the demand notice, citing financial difficulties due to their clients' defaults and requested the Petitioner not to take any legal proceedings. However, the Corporate Debtor's counsel admitted the debt and default without objection to the

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor is compliant with the provisions of …

**Ratio:** Sections 8 and 9 of the IBC outline the procedure for initiating CIRP by an operational

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**Reasoning:** The Bench was satisfied that the application met the requirements of Sections 8 & 9

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**Interpretation:** Sections 8 and 9 of the IBC are interpreted to mean that if a demand notice is

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**Application:** In this case, Shanaya Fashions served a demand notice, Ultimo Fabrics did not

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## Parties

- **Judges:** Bhaskara Pantula…; V. Nallasen…
- **Appellants:** Shanaya Fa…
- **Respondents:** Ultimo Fabrics…

## Timeline

- **2017-09-23 — Fabric Supply S…**: The Petitioner started supplying…
- **2018-03-17 — Fabric Supply End Date…**: The Petitioner supplied fabrics to the Corporate Debtor until this date. The Corporate…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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