# In the matter of Zenith Automotive Private Limited IB-577-ND-2020

> NCLT judgment dated 2021-09-24. Citation: TCN-2021-NCLT-01008. The Operational Creditor (OC), Redhex IT Solutions Private Limited, filed a petition under…

- **Court:** NCLT
- **Order date:** 24 Sept 2021
- **Citation:** TCN-2021-NCLT-01008
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/zenith-automotive-private-limited-ib-577-nd-2020-58768ca0

## Summary

### Background

The Operational Creditor (OC), Redhex IT Solutions Private Limited, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor (CD), Zenith Automotive Private Limited, for an alleged default in settling an amount of Rs 8,55,500, which included CGST and SGST @ 9% towards Office Management Charges. The OC claimed that the CD approached them for office management services and issued an invoice dated 25.09.19 for the said amount. The OC issued a demand notice under Section 8 of IBC on 05.01.20, but the CD did not reply. The CD later replied on 06.02.2021, acknowledging the services and the invoice but stating inability to pay due to business losses.

## Facts

Redhex IT Solutions Private Limited (Operational Creditor) provided office management services to Zenith Automotive Private Limited (Corporate Debtor). An invoice dated 2019-09-25 was issued for Rs 8,55,500, including CGST and SGST. The Operational Creditor issued a demand notice on 2020-01-05 under Section 8 of the IBC, which the Corporate Debtor did not initially reply to. The Corporate Debtor later acknowledged the services and invoice in a reply dated 2021-02-06, but claimed inability to pay due to business losses. The Corporate Debtor did not raise any dispute regarding the principal amount owed. The Operational Creditor filed a petition under Section 9 of the IBC to initiate CIRP. The Corporate Debtor admitted to the services rendered and did not dispute the

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## Issues and analysis

### Issue 1: Whether the Operational Creditor has established the existence of a debt and default on the part of …

**Ratio:** Section 9 of the IBC allows an operational creditor to initiate CIRP against a corporate

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**Reasoning:** The court reasoned that the Corporate Debtor admitted to availing the services and did

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**Interpretation:** The interpretation of Section 9 requires the operational creditor to

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**Application:** In this case, the Corporate Debtor's admission of the debt and failure to raise

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## Parties

- **Judges:** ABNI RANJAN KUMAR…; K.K. V…
- **Appellants:** Redhex IT…
- **Respondents:** Zenith Automotive…

## Timeline

- **2019-09-25 — Invoice…**: Invoice issued by Redhex IT Solutions Private Limited to Zenith Automotive Private…
- **2020-01-05 — Demand N…**: Demand notice issued by Redhex IT Solutions Private Limited to Zenith Automotive Private…

## 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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