# In the matter of Adico Forge Private Limited

> NCLT judgment dated 2023-06-23. Citation: TCN-2023-NCLT-02812. The case involves an application filed by Sunflag Iron & Steel Company Limited (Operational…

- **Court:** NCLT
- **Order date:** 23 Jun 2023
- **Citation:** TCN-2023-NCLT-02812
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/adico-forge-private-limited-2696b31d

## Summary

### Background

The case involves an application filed by Sunflag Iron & Steel Company Limited (Operational Creditor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Adico Forge Private Limited (Corporate Debtor). The Operational Creditor alleges that the Corporate Debtor defaulted in making payments for the supply of hot rolled steel.

## Facts

Sunflag Iron & Steel Company Limited (Operational Creditor) filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Adico Forge Private Limited (Corporate Debtor). The Operational Creditor claimed that the Corporate Debtor defaulted on payments for the supply of hot rolled steel. The total outstanding amount was Rs. 1,60,04,297.00. The Corporate Debtor had placed four purchase orders with the Operational Creditor. The Operational Creditor supplied the materials and raised invoices aggregating to Rs. 2,04,66,847.00. The Operational Creditor issued a demand notice under Section 8 of the IBC, 2016, on September 18, 2021. The Corporate Debtor made a payment of Rs. 10,00,000 on

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor, Adico Forge Private Limited, committed a default in making payment to …

**Ratio:** The legal principle applied is that if a corporate debtor admits to a debt and default,

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**Reasoning:** The court reasoned that the Corporate Debtor had admitted the debt and default in its

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**Interpretation:** Section 9 of the IBC is interpreted to mean that if the operational creditor

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**Application:** In this case, the Corporate Debtor's admission of debt and default, coupled

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## Parties

- **Judges:** H.V. Subb…; Madhu S…
- **Appellants:** Sunflag Iron &…
- **Respondents:** Adico Forge…

## Timeline

- **2021-09-18 — Demand Notice…**: Operational Creditor issued a demand notice under Section 8 of the IBC, 2016, to the…
- **2021-10-25 — Partial P…**: The Corporate Debtor made a payment of Rs.…

## 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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