# In the matter of VSM Venture Control Systems Private Limited (IB) 939 (ND)-2020

> NCLT judgment dated 2020-12-24. Citation: TCN-2020-NCLT-00015. The case involves a petition filed under Section 9 of the Insolvency & Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 24 Dec 2020
- **Citation:** TCN-2020-NCLT-00015
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vsm-venture-control-systems-private-limited-ib-939-nd-2020-2bb4dc21

## Summary

### Background

The case involves a petition filed under Section 9 of the Insolvency & Bankruptcy Code, 2016, by Honest Machinery Pvt Ltd (Operational Creditor) against VSM Venture Control Systems Private Limited (Corporate Debtor) for initiation of Corporate Insolvency Resolution Process (CIRP) due to the corporate debtor's inability to liquidate its operational debt. The applicant company claimed to have made various sale transactions with the respondent corporate debtor and rendered services of liaisoning, designing & consultancy against project revamping of paper machine as per Invoices attached with notice. The applicant company served demand notice to respondent corporate debtor at registered office address and site address vide Speed Post No. EG521616043IN and

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## Facts

Honest Machinery Pvt Ltd (Operational Creditor) filed a petition under Section 9 of the Insolvency & Bankruptcy Code, 2016, against VSM Venture Control Systems Private Limited (Corporate Debtor) for initiation of Corporate Insolvency Resolution Process (CIRP). The operational creditor claimed that the corporate debtor was unable to liquidate its operational debt. The operational creditor had made various sale transactions with the corporate debtor and rendered services of liaisoning, designing & consultancy against project revamping of paper machine. A demand notice was served to the corporate debtor. The total debt claimed was Rs. 1,11,82,688/-, including interest. The corporate debtor contended that the operational creditor was awarded a tender by Mazandaran

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## Issues and analysis

### Issue 1: Whether the demand notice was duly delivered to the corporate debtor as per the requirements of the …

**Ratio:** Regulation 5 of the IBBI (Application to Adjudicating Authority) Rules, 2016, specifies

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**Reasoning:** The NCLT examined the postal receipts and tracking reports submitted by the operational

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**Interpretation:** The regulation requires the operational creditor to deliver the demand notice

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**Application:** The NCLT found that the demand notice was delivered to the corporate debtor's

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## Parties

- **Judges:** ABNI RANJAN KUMAR…; K.K. V…
- **Appellants:** Honest Machinery…
- **Respondents:** VSM VENTURE…
- **Advocates:** Dhiren R…; Sanchit…

## Timeline

- **2017-09-28 — MOU Date…**: MOU entered between the parties, but the…
- **2018-04-12 — Invoice…**: Due date of payment as…

## 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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