# In the matter of Aaryany Creations Pvt. Ltd.

> NCLT judgment dated 2023-08-04. Citation: TCN-2023-NCLT-02160. The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 4 Aug 2023
- **Citation:** TCN-2023-NCLT-02160
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/aaryany-creations-pvt-ltd-6a089736

## Summary

### Background

The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by Singla Fabrics, an operational creditor, against Aaryany Creations Private Limited, the corporate debtor, for initiation of Corporate Insolvency Resolution Process (CIRP). The operational creditor claimed a total amount of Rs 1,13,20,703, including interest, with a principal amount of Rs. 74,72,075. The operational creditor and corporate debtor had business transactions since 2012-13. The corporate debtor allegedly defaulted on payments, leading to the operational creditor issuing a demand notice on 25.11.2019. The corporate debtor claimed a pre-existing dispute regarding the quality of goods supplied.

## Facts

Singla Fabrics, the operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against Aaryany Creations Private Limited, the corporate debtor. The operational creditor and corporate debtor had business transactions since 2012-13, with the operational creditor supplying cotton fabrics to the corporate debtor. The operational creditor claimed a total amount of Rs 1,13,20,703, including interest, with a principal amount of Rs. 74,72,075. The date of default is recurring and the latest default occurred after the sending of demand notice dated 25.11.2019. The corporate debtor made a last payment of Rs. 25,000 on 01.05.2019. The operational creditor sent a legal notice dated 15.10.2019, to which the corporate

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## Issues and analysis

### Issue 1: Whether there is an ‘Operational Debt' exceeding Rs. 1 Lakh (1 Crore, in case the petition is filed …

**Ratio:** Section 5(21) of the Insolvency and Bankruptcy Code, 2016, defines 'Operational Debt' as

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**Reasoning:** The Adjudicating Authority considered the transactional invoices and bank statements of

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**Interpretation:** The definition of 'Operational Debt' under Section 5(21) is interpreted to

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**Application:** In this case, the Adjudicating Authority found that the debt claimed by the

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## Parties

- **Judges:** P.S.N. P…; BINOD KUMAR…
- **Appellants:** Singla Fa…
- **Respondents:** Aaryany Creations…; Aaryany Creations…
- **Advocates:** Amarendra Kumar…; Purti G…; +1 more

## Timeline

- **2012-01-01 — Start of Business…**: The Operational Creditor and Corporate Debtor started trading in cotton fabrics in the…
- **2019-05-01 — Last Payment by…**: The Corporate Debtor made the last…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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