# In the matter of V.G. Textiles Pvt Ltd CP-591-(IB)-2017

> NCLT judgment dated 2017-11-07. Citation: TCN-2017-NCLT-00234. The case involves an application filed by an Operational Creditor, C.M. Industries, under…

- **Court:** NCLT
- **Order date:** 7 Nov 2017
- **Citation:** TCN-2017-NCLT-00234
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vg-textiles-pvt-ltd-cp-591-ib-2017-a6d25f55

## Summary

### Background

The case involves an application filed by an Operational Creditor, C.M. Industries, under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor, V.G. Textiles Pvt. Ltd. The Operational Creditor claimed that the Corporate Debtor defaulted in making payment for cotton bales sold to them. The application also sought a declaration of moratorium and appointment of an Interim Resolution Professional (IRP).

## Facts

C.M. Industries, the Operational Creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against V.G. Textiles Pvt. Ltd., the Corporate Debtor, due to unpaid dues for cotton bales sold. The entire payment became due on 2015-05-11. The Corporate Debtor made only partial payments, leaving an outstanding amount of Rs. 6,56,903, including interest. The Operational Creditor sent a statutory notice under Section 8 of the I&B Code on 2017-09-02, which was delivered to the Corporate Debtor on 2017-09-07, but no reply was received. The Operational Creditor also filed an affidavit stating that no notice of dispute was received from the Corporate Debtor regarding the unpaid debt. The Operational Creditor also submitted a bank certificate

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor under Section 9 of the Insolvency and …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016, read with Rule 6 of the Insolvency

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**Reasoning:** The court reasoned that the Corporate Debtor defaulted in making payment of the

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**Interpretation:** Section 9 of the I&B Code allows an operational creditor to initiate CIRP

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**Application:** The court applied the provisions of Section 9 of the I&B Code to the facts

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## Parties

- **Judges:** CH. MOHD SHARIEF…; S. VIJAYARA…
- **Appellants:** C.M. INDU…
- **Respondents:** V.G. TEXTILES…

## Timeline

- **2015-05-11 — Payment Du…**: Entire payment for…
- **2017-09-02 — Statutory Not…**: Operational Creditor sent statutory…

## 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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