# In the matter of Avathera Pharma Private Limited CP (IB) No. 333-9-HDB-2021

> NCLT judgment dated 2022-07-21. Citation: TCN-2022-NCLT-01614. The case involves a petition filed by an Operational Creditor, M/s. Changzhou Fly Import and…

- **Court:** NCLT
- **Order date:** 21 Jul 2022
- **Citation:** TCN-2022-NCLT-01614
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/avathera-pharma-private-limited-cp-ib-no-333-9-hdb-2021-0b3845bd

## Summary

### Background

The case involves a petition filed by an Operational Creditor, M/s. Changzhou Fly Import and Export Trading Co., against a Corporate Debtor, M/s. Avathera Pharma Pvt Ltd, under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Operational Creditor claimed that the Corporate Debtor defaulted on a payment of Rs. 1,69,03,441.20. The petition seeks the commencement of the Corporate Insolvency Resolution Process (CIRP), a moratorium, and the appointment of an Interim Resolution Professional (IRP). The Corporate Debtor was allegedly in the business of supplying and exporting FFP2-Level Face Masks and had entered into sales contracts with the Operational Creditor. Disputes arose regarding the delivery of goods and the refund of advance payments.

## Facts

M/s. Changzhou Fly Import and Export Trading Co. (Operational Creditor) filed a petition against M/s. Avathera Pharma Pvt Ltd (Corporate Debtor) under Section 9 of the IBC, claiming a default of Rs. 1,69,03,441.20. The Corporate Debtor was in the business of supplying and exporting FFP2-Level Face Masks. The Operational Creditor and Corporate Debtor entered into Sales Contract No.1 dated 30.01.2020 for USD 40,040.00, with the Operational Creditor advancing USD 20,020.00. Later, Sales Contract No.2 was entered into on 10.02.2020. The Corporate Debtor allegedly delayed the delivery of 3-Ply surgical face masks. The Operational Creditor cancelled the contract on 21.02.2020, requesting a refund of the advance payment and a penalty. The Corporate Debtor, via email dated

…

## Issues and analysis

### Issue 1: Whether an Operational debt as claimed by the applicant is due and payable by the Corporate Debtor …

**Ratio:** The ratio is based on Section 9 of the Insolvency and Bankruptcy Code, 2016, which allows

…

**Reasoning:** The court reasoned that the Operational Creditor had provided sufficient evidence of the

…

**Interpretation:** The interpretation involves understanding the requirements under Section 9 of

…

**Application:** The ratio and reasoning were applied to the specific facts of the case. The

…

## Parties

- **Judges:** Venkata Ramakrishn…; SH. VEERA BRAHMA…
- **Appellants:** M/s. Changzhou…
- **Respondents:** M/s. Avathera…
- **Advocates:** Annapurna…

## Timeline

- **2020-01-30 — Sales Contra…**: Operational Creditor and Corporate Debtor entered into Sales Contract No.1 bearing…
- **2020-01-31 — Advance P…**: Operational Creditor advanced USD 20,020.00, being 50% of the contract value for supply…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/avathera-pharma-private-limited-cp-ib-no-333-9-hdb-2021-0b3845bd