# In the matter of Umaiyal Enterprises Services Private Limited C.P. (IB) No. 140-BB-2020

> NCLT judgment dated 2020-09-09. Citation: TCN-2020-NCLT-00665. The case involves a petition filed by M/s. Famous Innovations Digital Creative Private Limited…

- **Court:** NCLT
- **Order date:** 9 Sept 2020
- **Citation:** TCN-2020-NCLT-00665
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/umaiyal-enterprises-services-private-limited-cp-ib-no-140-bb-2020-956dfe92

## Summary

### Background

The case involves a petition filed by M/s. Famous Innovations Digital Creative Private Limited (Operational Creditor) against M/s. Umaiyal Enterprises Services Private Limited (Corporate Debtor) under Section 9 of the IBC, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed a default of Rs. 17,87,141/- including principal and interest at 18% p.a. based on a Service Agreement. The Corporate Debtor allegedly breached the agreement by halting services and failing to make payments. The Operational Creditor issued a demand notice, which the Corporate Debtor replied to, denying the allegations. The Tribunal noted that the Operational Creditor failed to serve notices on the Respondent.

## Facts

M/s. Famous Innovations Digital Creative Private Limited (Operational Creditor) filed a petition against M/s. Umaiyal Enterprises Services Private Limited (Corporate Debtor) under Section 9 of the IBC, 2016. The Operational Creditor and Corporate Debtor entered into a Service Agreement on 13.12.2018, effective from 01.12.2018, where the Operational Creditor would provide services for a retainer fee of Rs. 5,00,000/- for six months. On 23.01.2019, the Corporate Debtor informed the Operational Creditor to halt services, which the Operational Creditor considered a breach. The Operational Creditor continued providing services until March 2019 and raised invoices. The Corporate Debtor failed to make payments, leading the Operational Creditor to issue a Demand Notice on

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## Issues and analysis

### Issue 1: Whether the Operational Creditor has established a debt and default by the Corporate Debtor as …

**Ratio:** Under Section 9 of the IBC, 2016, an operational creditor can initiate CIRP against a

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**Reasoning:** The Tribunal acknowledged that the Corporate Debtor broadly admitted the debt. However,

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**Interpretation:** Section 9 of the IBC, 2016 requires the operational creditor to demonstrate the

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**Application:** In this case, while the Corporate Debtor admitted the debt, the Tribunal found

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## Parties

- **Judges:** Rajeswara Rao…; Ashutosh C…
- **Appellants:** Famous Innovations…
- **Respondents:** Umaiyal Enterprise…

## Timeline

- **2018-12-13 — Service Agr…**: Parties entered into a 'Service Agreement'…
- **2019-01-23 — Halt of Se…**: Corporate Debtor sent an email informing the…

## 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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