# In the matter of AKM Foods Private Limited

> NCLT judgment dated 2024-04-25. Citation: TCN-2024-NCLT-01581. Saroj Bala, the operational creditor, filed a petition under Section 9 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 25 Apr 2024
- **Citation:** TCN-2024-NCLT-01581
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/akm-foods-private-limited-b364fe8c

## Summary

### Background

Saroj Bala, the operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against AKM Foods Private Limited, the corporate debtor, due to unpaid operational debt. The operational creditor is engaged in the business of trading rice/paddy, while the corporate debtor is involved in manufacturing grain mill products, starches, and animal feeds. The operational creditor supplied goods to the corporate debtor from 2017 to 2021, and the corporate debtor acknowledged a liability of Rs. 2,92,93,385/- in a letter dated June 15, 2020, but was unable to pay due to liquidity constraints.

## Facts

Saroj Bala, a sole proprietor of M/s Vijay Enterprises, is an operational creditor engaged in trading rice/paddy. AKM Foods Private Limited is the corporate debtor, manufacturing grain mill products, starches, and animal feeds. Saroj Bala supplied goods to AKM Foods from December 21, 2017, to April 1, 2021. The corporate debtor acknowledged a liability of Rs. 2,92,93,385/- on June 15, 2020, but could not pay due to financial constraints. The total amount claimed to be in default is Rs. 2,05,68,435/- with 18% interest per annum. The date of default is April 1, 2021. A demand notice was issued on February 2, 2023, and duly served. The corporate debtor admitted the claim but requested time for payment. The petition was filed on June 26, 2023, and re-filed on July 20,

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## Issues and analysis

### Issue 1: Whether the demand notice in Form 3 …

**Ratio:** A demand notice must be properly served to

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**Reasoning:** The demand notice was delivered to the corporate debtor via registered post, and postal

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**Interpretation:** Proper service of a demand notice is a prerequisite for initiating CIRP.

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**Application:** The demand notice was deemed properly served as it was sent via registered post

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## Parties

- **Judges:** Harnam Singh…; L. N. G…
- **Appellants:** Saroj…
- **Respondents:** AKM Foods Private…; M/s AKM Foods…

## Timeline

- **2017-12-21 — Goods Suppl…**: Operational creditor started…
- **2021-04-01 — Goods Supp…**: Operational creditor stopped…

## 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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