# In the matter of Varun Sacks Private Limited CP (IB) No. 3994 of 2019

> NCLT judgment dated 2021-07-29. Citation: TCN-2021-NCLT-01545. Vandana Enterprises Pvt. Ltd., the Operational Creditor, filed a Company Petition seeking to…

- **Court:** NCLT
- **Order date:** 29 Jul 2021
- **Citation:** TCN-2021-NCLT-01545
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/varun-sacks-private-limited-cp-ib-no-3994-of-2019-58fe504c

## Summary

### Background

Vandana Enterprises Pvt. Ltd., the Operational Creditor, filed a Company Petition seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Varun Sacks Pvt. Ltd., the Corporate Debtor, alleging default in payment for goods supplied. The Corporate Debtor allegedly failed to make payment of Rs. 30,72,120/-, which includes a principal amount of Rs. 25,26,621/- and an interest amount of Rs. 5,45,499/- at the rate of 18% per annum.

## Facts

Vandana Enterprises Pvt. Ltd. (Operational Creditor) filed a petition against Varun Sacks Pvt. Ltd. (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate CIRP. The Operational Creditor claimed that the Corporate Debtor defaulted in making payment of Rs. 30,72,120/-, including a principal amount of Rs. 25,26,621/- and interest of Rs. 5,45,499/-. The Operational Creditor supplied chemicals to the Corporate Debtor. The Corporate Debtor made partial payments on a running account basis but failed to pay certain invoices amounting to Rs. 25,26,621/-. The Operational Creditor sent a demand notice dated 14.08.2019, which was served on 20.08.2019, but received no reply or payment. The Corporate Debtor failed to file a reply or make

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a default in …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016 allows an operational creditor to

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**Reasoning:** The Corporate Debtor failed to make payment of the outstanding amount despite the demand

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**Interpretation:** The legal interpretation is that a default occurs when a debt is not paid when

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**Application:** In this case, the Operational Creditor demonstrated that the Corporate Debtor

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## Parties

- **Judges:** H.V. Subb…; Chandra Bha…
- **Appellants:** Vandana Enterprise…
- **Respondents:** Varun Sacks Pvt.…; Varun Sacks…
- **Advocates:** PS. Th…

## Timeline

- **2019-08-14 — Demand Noti…**: Operational Creditor sent a demand…
- **2019-08-20 — Service of Dema…**: Demand notice served to…

## 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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