# In the matter of Welcome Distilleries Pvt. Ltd. C.P.(IB)-3284-(MB)-2018

> NCLT judgment dated 2019-03-06. Citation: TCN-2019-NCLT-04560. Raj Process Equipments and Systems Pvt. Ltd., an operational creditor, filed a petition under…

- **Court:** NCLT
- **Order date:** 6 Mar 2019
- **Citation:** TCN-2019-NCLT-04560
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/welcome-distilleries-pvt-ltd-cpib-3284-mb-2018-67a8bc49

## Summary

### Background

Raj Process Equipments and Systems Pvt. Ltd., an operational creditor, filed a petition under Section 9 of the Insolvency & Bankruptcy Code, 2016, against Welcome Distilleries Pvt. Ltd., the corporate debtor, for an outstanding operational debt of ₹10,35,948/-. The debt arose from the supply of 'Components for Spent Wash Evaporator (206)A' for which 10 invoices were raised. The invoices included a clause stating that interest at 24% would be charged on overdue bill payments. The payment terms were structured in stages, including advance payments and payments upon completion of civil works and dispatch of materials.

## Facts

Raj Process Equipments and Systems Pvt. Ltd. (Operational Creditor) supplied 'Components for Spent Wash Evaporator (206)A' to Welcome Distilleries Pvt. Ltd. (Corporate Debtor). Ten invoices were raised with a clause for 24% interest on overdue payments. The payment terms were staged, including advance payments and payments upon completion of civil works and dispatch of materials. The Corporate Debtor failed to pay an outstanding amount of ₹10,35,948/-, leading the Operational Creditor to issue a demand notice on 2018-07-30. The Corporate Debtor did not reply to the demand notice or make the payment. The Board of Directors of the Petitioner/Creditor resolved in its meeting held on 2018-07-20 to initiate Corporate Insolvency Resolution Process against the impugned

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## Issues and analysis

### Issue 1: Whether the default as defined under Section 3(12) of the Insolvency & Bankruptcy Code, 2016 is …

**Ratio:** Section 3(12) of the Insolvency & Bankruptcy Code, 2016 defines 'default' as

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**Reasoning:** The court found that the Corporate Debtor failed to pay the outstanding operational debt

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**Interpretation:** The interpretation of Section 3(12) requires establishing that a debt is due

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**Application:** In this case, the Operational Creditor provided evidence of the outstanding

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## Parties

- **Judges:** M.K. Sh…
- **Appellants:** Raj Process…
- **Respondents:** Welcome Distilleri…

## Timeline

- **2014-05-27 — Invoice…**: Invoices were raised for…
- **2018-07-20 — Board Reso…**: Board of Directors of the Petitioner/Creditor Resolved in its meeting to initiate…

## 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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