# In the matter of Uttam Strips Ltd. (IB) 137 (ND)-2018

> NCLT judgment dated 2018-04-09. Citation: TCN-2018-NCLT-01572. Power2SME Pvt. Ltd., an operational creditor, filed a petition under Section 9 of the IBC…

- **Court:** NCLT
- **Order date:** 9 Apr 2018
- **Citation:** TCN-2018-NCLT-01572
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/uttam-strips-ltd-ib-137-nd-2018-bce00faf

## Summary

### Background

Power2SME Pvt. Ltd., an operational creditor, filed a petition under Section 9 of the IBC seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against Uttam Strips Ltd. due to its inability to liquidate its financial debts. The operational creditor had supplied goods to the corporate debtor under various purchase orders, leading to an outstanding debt.

## Facts

Power2SME Pvt. Ltd. (Operational Creditor) supplied goods to Uttam Strips Ltd. (Corporate Debtor) under various purchase orders, resulting in an outstanding sum of Rs. 17,61,98,341. The Corporate Debtor acknowledged the liability, admitting to owing more than Rs. 16.21 crores via emails dated 27.03.2017 and 22.07.2017. The Corporate Debtor issued cheques that were dishonored with the memo 'Exceeds Arrangements'. The Operational Creditor issued a demand notice under Section 8 of the IBC, to which no reply was given. The Corporate Debtor admitted the outstanding liability through their advocate but claimed inability to repay. The Operational Creditor then filed a petition under Section 9 of the IBC for initiation of CIRP.

## Issues and analysis

### Issue 1: Whether the petition filed by the operational creditor under Section 9 of the IBC merits admission …

**Ratio:** A petition under Section 9 of the IBC can be admitted if there is an operational debt

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**Reasoning:** The court reasoned that the corporate debtor had admitted to the outstanding liability in

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**Interpretation:** Section 9 of the IBC allows an operational creditor to initiate CIRP against a

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**Application:** The court applied the ratio to the facts of the case, noting that the corporate

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## Parties

- **Judges:** Ina Mal…; Deepa Kr…; +1 more
- **Appellants:** Power2SME Pvt.…
- **Respondents:** Uttam Strip…

## Timeline

- **2017-03-27 — Email acknowledging…**: Corporate Debtor sent an…
- **2017-07-22 — Email acknowledging…**: Corporate Debtor sent an…

## 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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