# In the matter of A.P. Steel Re Rolling Mill Ltd.

> NCLT judgment dated 2024-05-02. Citation: TCN-2024-NCLT-01484. This case involves an application filed by M/S. S.N. STEELS, Palakkad, an Operational Creditor…

- **Court:** NCLT
- **Order date:** 2 May 2024
- **Citation:** TCN-2024-NCLT-01484
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ap-steel-re-rolling-mill-ltd-5e2c6417

## Summary

### Background

This case involves an application filed by M/S. S.N. STEELS, Palakkad, an Operational Creditor (OC), under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, for initiating the Corporate Insolvency Resolution Process (CIRP) against A.P. STEEL RE ROLLING MILL LTD., Palakkad, the Corporate Debtor (CD). The OC claims a default in repayment of an operational debt amounting to Rs.2,64,38,134/- plus 12% interest p.a. from 24.03.2022 until 24.02.2024, totaling Rs.60,88,914/-.

## Facts

M/S. S.N. STEELS, Palakkad (Operational Creditor), filed an application under Section 9 of the IBC for initiating CIRP against A.P. STEEL RE ROLLING MILL LTD., Palakkad (Corporate Debtor). The OC claimed that it supplied steel scrap to the CD between 23.07.2020 and 21.10.2020, and payments were due. The outstanding amount was Rs.2,64,38,134/- plus 12% interest p.a. from 24.03.2022 to 24.02.2024, totaling Rs.60,88,914/-. An agreement dated 06.05.2021 existed between the parties where the CD undertook to pay the outstanding amounts in installments commencing from 01.12.2021. The CD defaulted on 02.12.2021. The CD admitted to the debt but stated that it was under loss and could not meet its expenses due to the Covid-19 lockdown. The OC sent a demand notice on 24.02.2024.

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor for initiating CIRP against the Corporate …

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

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**Reasoning:** The Tribunal found that the Corporate Debtor had defaulted in the payment of an

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**Interpretation:** Section 9 of the IBC is interpreted to mean that if an operational debt exists,

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**Application:** In this case, the Operational Creditor proved that an operational debt existed,

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## Parties

- **Judges:** Shyam Babu…; T Krishna…
- **Appellants:** M/S. S.N.…
- **Respondents:** A.P. STEEL RE…; M/S. A.P. STEEL…

## Timeline

- **1992-07-31 — Incorporation of…**: A.P. Steel Re Rolling Mill Ltd.…
- **2020-07-23 — Invoice Perio…**: Start of the period during which invoices…

## 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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