# In the matter of Veda Biofuel Limited CP (IB) No. 423-9-HDB-2018

> NCLT judgment dated 2019-02-12. Citation: TCN-2019-NCLT-04879. The case involves a petition filed by Priya Trading Company (Operational Creditor) against Veda…

- **Court:** NCLT
- **Order date:** 12 Feb 2019
- **Citation:** TCN-2019-NCLT-04879
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/veda-biofuel-limited-cp-ib-no-423-9-hdb-2018-b792d85b

## Summary

### Background

The case involves a petition filed by Priya Trading Company (Operational Creditor) against Veda Biofuel Limited (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, for defaulting on a payment of Rs. 4,80,65,149/-. The Operational Creditor sought the initiation of the Corporate Insolvency Resolution Process (CIRP), a moratorium, and the appointment of an Interim Resolution Professional (IRP). The Corporate Debtor contested the petition, claiming a lack of privity of contract with the Operational Creditor and the existence of pre-existing disputes. The Operational Creditor claimed that it supplied raw materials (broken rice and coal) to the Corporate Debtor under a Raw Material Supply Agreement dated 09-04-2018.

## Facts

Priya Trading Company, represented by its Partner, Sri. Shyam Sunder Agarwal, filed a petition against Veda Biofuel Limited under Section 9 of the Insolvency and Bankruptcy Code, 2016, claiming a default of Rs. 4,80,65,149/-. The basis of the claim was a Raw Material Supply Agreement dated 09-04-2018, under which Priya Trading Company was to supply broken rice and coal to Veda Biofuel Limited. The Operational Creditor (Priya Trading Company) claimed that despite supplying the materials, the Corporate Debtor (Veda Biofuel Limited) failed to make full payments. The Corporate Debtor deducted shortages but did not credit the pending invoice amounts. The Corporate Debtor contended that there was no privity of contract with Priya Trading Company, as the agreement was with

…

## Issues and analysis

### Issue 1: Whether the Operational Creditor, Priya Trading Company, has established a valid operational debt …

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

…

**Reasoning:** The NCLT found that the Operational Creditor had provided sufficient evidence, including

…

**Interpretation:** The interpretation of Section 9 requires the operational creditor to prove the

…

**Application:** In this case, the NCLT applied Section 9 by examining the evidence provided by

…

## Parties

- **Judges:** Ratakonda…; Ratakonda…
- **Appellants:** Priya Trading…
- **Respondents:** Veda Biofuel…; Veda Biofu…

## Timeline

- **2018-04-09 — Raw Material Supply…**: M/s. Priya Trading Company and M/s. Veda Biofuel Limited entered into a Raw Material…
- **2018-06-15 — Exchange of…**: The Corporate Debtor and Shri. Arun Agarwal and…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/veda-biofuel-limited-cp-ib-no-423-9-hdb-2018-b792d85b