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

> NCLT judgment dated 2019-09-02. Citation: TCN-2019-NCLT-01635. 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-01635
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vma-chemicals-private-limited-ib-1130-nd-2019-292cba2d

## 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 it supplied goods to VMA Chemicals, the Corporate Debtor, from around 2015, with payments made on a running account basis. The Corporate Debtor 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 sent to the Corporate Debtor's registered office in Delhi, but no payment was made, nor was the existence of any dispute raised.

## Facts

Kutch Chemicals Industries Limited (Operational Creditor) filed a petition against VMA Chemicals Private Limited (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate CIRP. Kutch Chemicals claimed to have 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, resulting in an outstanding amount of Rs 43,80,765 as of October 1, 2018. A demand notice was sent to VMA Chemicals' registered office, but no payment was made, nor was any dispute raised. VMA Chemicals contended that no demand notice was delivered, rendering the petition premature. The Tribunal noted that the demand notice was sent by

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## Issues and analysis

### Issue 1: Whether the petition filed by Kutch Chemicals Industries Limited under Section 9 of the Insolvency …

**Ratio:** A petition under Section 9 of the IBC is not maintainable if the demand notice has not

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**Reasoning:** The Tribunal observed that the demand notice was sent by 'Panoli Intermediates India Pvt.

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**Interpretation:** The requirement of proper service of a demand notice by the Operational

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

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## Parties

- **Judges:** R. VARADH…; K.K. V…
- **Appellants:** Kutch Chemicals…
- **Respondents:** VMA Chemicals…

## 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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