# In the matter of VMA Chemicals Private Limited IB-1130-(ND)-2019

> NCLT judgment dated 2019-09-02. Citation: TCN-2019-NCLT-01633. Kutch Chemicals Industries Limited filed a petition under Section 9 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 2 Sept 2019
- **Citation:** TCN-2019-NCLT-01633
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vma-chemicals-private-limited-ib-1130-nd-2019-1bf46f96

## Summary

### Background

Kutch Chemicals Industries Limited filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against VMA Chemicals Private Limited for initiating the Corporate Insolvency Resolution Process (CIRP). Kutch Chemicals, the operational creditor, claimed that VMA Chemicals, the corporate debtor, defaulted on payments for goods supplied since January 2017, with a total default amount of Rs 43,80,765 as of October 1, 2018. The demand notice was allegedly delivered to the corporate debtor's registered office in Delhi.

## Facts

Kutch Chemicals Industries Limited, the operational creditor, filed a petition against VMA Chemicals Private Limited, the corporate debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016. Kutch Chemicals claimed that they supplied goods (normal paraffin, waksol, and AHD) to VMA Chemicals since 2015, with payments made on a running account basis. VMA Chemicals allegedly defaulted on payments from January 2017, leading to an outstanding amount of Rs 43,80,765 as of October 1, 2018. A demand notice was purportedly delivered to VMA Chemicals' registered office in Delhi. VMA Chemicals contended that no demand notice was received, rendering the petition premature. The Tribunal noted that the demand notice was sent by Panoli Intermediates India Pvt. Ltd., not

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## Issues and analysis

### Issue 1: Whether the failure to properly serve a demand notice under Section 8 of the IBC, 2016, renders a …

**Ratio:** The ratio is that strict compliance with the procedural requirements of Section 8 of the

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**Reasoning:** The Tribunal reasoned that the demand notice is a critical prerequisite for initiating

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**Interpretation:** Section 8 of the IBC, 2016, is interpreted to require the operational creditor

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**Application:** In this case, the demand notice was sent by Panoli Intermediates India Pvt.

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## Parties

- **Judges:** R. VARADH…; K.K. V…
- **Appellants:** Kutch Chemicals…
- **Respondents:** VMA Chemicals…
- **Advocates:** Sanjay…; Prabhat…; +1 more

## Timeline

- **2015-01-01 — Supply of…**: Operational Creditor started…
- **2017-01-01 — Default in…**: Corporate Debtor started…

## 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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