# In the matter of AKM Foods Private Limited

> NCLT judgment dated 2024-04-25. Citation: TCN-2024-NCLT-01589. The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by Saroj…

- **Court:** NCLT
- **Order date:** 25 Apr 2024
- **Citation:** TCN-2024-NCLT-01589
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/akm-foods-private-limited-c7fcbc56

## Summary

### Background

The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by Saroj Bala, the sole proprietor of M/s Vijay Enterprise (Operational Creditor), seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s AKM Foods Private Limited (Corporate Debtor). 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 21.12.2017 to 01.04.2021. 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. The total amount claimed to be in default is Rs.

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## Facts

Saroj Bala, operating as M/s Vijay Enterprises, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s AKM Foods Private Limited. Saroj Bala, the operational creditor, is in the business of trading rice and paddy. AKM Foods Private Limited, the corporate debtor, is in the business of manufacturing grain mill products, starches, and animal feeds. The operational creditor supplied goods to the corporate debtor between December 21, 2017, and April 1, 2021. 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. The total amount claimed to be in default is Rs. 2,05,68,435/- along with

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## Issues and analysis

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

**Ratio:** A demand notice is considered duly served if it is delivered to the corporate debtor via

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**Reasoning:** The Adjudicating Authority noted that the demand notice was delivered to the corporate

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**Interpretation:** The legal principle is that service of a demand notice is a prerequisite for

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**Application:** In this case, the demand notice was properly served as it was sent via

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## Parties

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

## Timeline

- **2017-12-21 — Goods Sup…**: Operational creditor started…
- **2020-06-15 — Liability Ackn…**: Corporate debtor acknowledged a…

## 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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