# In the matter of About U Fashions Private Limited

> NCLT judgment dated 2023-08-11. Citation: TCN-2023-NCLT-02055. Hiralal Lunawat, representing Sahara Export, filed a Company Petition under Section 9 of the…

- **Court:** NCLT
- **Order date:** 11 Aug 2023
- **Citation:** TCN-2023-NCLT-02055
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/about-u-fashions-private-limited-42441335

## Summary

### Background

Hiralal Lunawat, representing Sahara Export, filed a Company Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against About U Fashions Private Limited, alleging unpaid operational debt. The Operational Creditor claimed that the Corporate Debtor owed Rs. 46,19,815.71/- as of 30.06.2019, including interest, for the supply of textile items between 08.06.2016 and 23.10.2018. The Corporate Debtor contested the petition, arguing that the person filing the petition was not authorized, that there was a prior settlement agreement for a lesser amount, and that significant payments had already been made.

## Facts

Hiralal Lunawat, representing Sahara Export (Operational Creditor), filed a petition against About U Fashions Private Limited (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Operational Creditor claimed an outstanding debt of Rs. 46,19,815.71/- as of 30.06.2019, including interest, for textile supplies between 08.06.2016 and 23.10.2018. The Corporate Debtor argued that the petition was filed by an unauthorized person, as the proprietor of the Operational Creditor was Ms. Kusum Soni. The Corporate Debtor also pointed to a settlement MoU dated 05.07.2019, where the outstanding amount was stated as Rs. 21,07,200/-. Furthermore, the Corporate Debtor claimed to have made payments totaling Rs. 15,47,059/- before the demand notice and

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## Issues and analysis

### Issue 1: Whether the Company Petition filed by the Operational Creditor is maintainable under Section 9 of …

**Ratio:** The petition under Section 9 of the IBC is not maintainable if the debt has been paid or

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**Reasoning:** The NCLT found that the Corporate Debtor had made substantial payments, exceeding the

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

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**Application:** The NCLT applied the principle that a petition is not maintainable if the debt

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## Parties

- **Judges:** H.V. Subb…; Anu Jagmoha…
- **Appellants:** Hiralal L…
- **Respondents:** About U Fashions…

## Timeline

- **2008-07-02 — Incorporation of…**: About U Fashions Private…
- **2016-06-08 — Start of Invoi…**: The period for which invoices were raised by the Operational Creditor to the Corporate…

## 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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