# In the matter of Anro Steels Private Limited CP (IB) No. 110-Chd-Pb-2020

> NCLT judgment dated 2023-02-09. Citation: TCN-2023-NCLT-04685. The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by M/s…

- **Court:** NCLT
- **Order date:** 9 Feb 2023
- **Citation:** TCN-2023-NCLT-04685
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/anro-steels-private-limited-cp-ib-no-110-chd-pb-2020-67a6d2c2

## Summary

### Background

The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by M/s Sponge Sales India Private Limited (Operational Creditor) to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Angro Steels Private Limited (Corporate Debtor). The operational creditor claimed that the corporate debtor defaulted on payments for the supply of sponge iron. The operational creditor issued GST invoices dated 05.06.2019, 06.06.2019, and 13.06.2019 amounting to Rs.23,43,630/-. A credit note of Rs.35,075/- was received on 14.06.2019, but no further payments were made. A demand notice under Section 8 was sent, but it was returned with the remark 'refused'. The operational creditor also filed a complaint under Section 138 of the Negotiable Instrument

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## Facts

M/s Sponge Sales India Private Limited (Operational Creditor) filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Angro Steels Private Limited (Corporate Debtor). The Operational Creditor supplied sponge iron to the Corporate Debtor, issuing GST invoices dated 05.06.2019, 06.06.2019, and 13.06.2019, totaling Rs. 23,43,630/-. The Corporate Debtor made a partial payment of Rs. 35,075/- via a credit note on 14.06.2019, but no further payments were made. The Operational Creditor issued a demand notice under Section 8 of the IBC, which was returned with the remark 'refused'. The Operational Creditor also filed a complaint under Section 138 of the Negotiable Instruments Act,

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## Issues and analysis

### Issue 1: Whether the demand notice in Forms 3 & 4 dated 16.09.2022 was sent by the operational creditor …

**Ratio:** Service of demand notice is a prerequisite for initiating CIRP under Section 9 of the

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**Reasoning:** The Adjudicating Authority noted that the demand notice was received back with the remark

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**Interpretation:** The 'refusal' of the demand notice by the corporate debtor does not invalidate

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**Application:** Despite the 'refusal' remark, the Adjudicating Authority considered the demand

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## Parties

- **Judges:** Harnam Singh…; SUBRATA KUM…
- **Appellants:** M/s Sponge Sales…
- **Respondents:** M/s Angro Steels…
- **Advocates:** DK Gu…

## Timeline

- **2019-06-05 — Invoice…**: GST Invoice issued by…
- **2019-06-06 — Invoice…**: GST Invoice issued by…

## 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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