# In the matter of Arn IOT Solutions Private Limited CP (IB) No. 97-BB-2021

> NCLT judgment dated 2022-12-01. Citation: TCN-2022-NCLT-00274. TVS Supply Chain Solutions Limited filed a petition under Section 9 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 1 Dec 2022
- **Citation:** TCN-2022-NCLT-00274
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/arn-iot-solutions-private-limited-cp-ib-no-97-bb-2021-7fa3666c

## Summary

### Background

TVS Supply Chain Solutions Limited filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against ARN IOT Solutions Private Limited, the Corporate Debtor, due to unpaid operational debt. The Corporate Debtor acknowledged the debt but cited business losses due to Covid-19 and delays in payments from their client, Indoshell Mould Limited, as reasons for not making timely payments. The Operational Creditor contended that the debt was due and payable regardless of the Corporate Debtor's arrangements with third parties.

## Facts

TVS Supply Chain Solutions Limited (Operational Creditor) filed a petition against ARN IOT Solutions Private Limited (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The claim was based on a default amount of Rs. 2,04,46,734.32 as of November 21, 2019, arising from a purchase order dated August 23, 2019, for telecom tower material. The Operational Creditor supplied the materials, and the Corporate Debtor issued a work completion certificate dated August 27, 2019. An invoice was raised on August 30, 2019, for Rs. 2,72,91,040. The Corporate Debtor made partial payments totaling Rs. 68,44,305.88 by March 4, 2021. Despite reminders, the Corporate Debtor failed to clear the

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## Issues and analysis

### Issue 1: Whether the petition filed by the Operational Creditor under Section 9 of the Insolvency and …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016 allows an operational creditor to

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**Reasoning:** The Adjudicating Authority noted that the Corporate Debtor admitted the debt and had made

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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 Corporate Debtor admitted the debt and had defaulted on its

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## Parties

- **Judges:** KISHORE VEMULAPALL…; Manoj Kumar…
- **Appellants:** TVS Supply Chain…
- **Respondents:** ARN IOT Solutions…

## Timeline

- **2019-08-23 — Purchase…**: Corporate Debtor issued a Purchase Order to Operational Creditor for telecom tower…
- **2019-08-27 — Work Completion…**: Corporate Debtor issued a work completion certificate acknowledging completion of work by…

## 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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