# In the matter of Avni Yarns Private Ltd.

> NCLT judgment dated 2024-04-02. Citation: TCN-2024-NCLT-01892. The case involves an application filed by Prashant D. Agarwal, an Operational Creditor, against…

- **Court:** NCLT
- **Order date:** 2 Apr 2024
- **Citation:** TCN-2024-NCLT-01892
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/avni-yarns-private-ltd-9e867f12

## Summary

### Background

The case involves an application filed by Prashant D. Agarwal, an Operational Creditor, against Avni Yarns Private Ltd, the Corporate Debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Operational Creditor sought initiation of the Corporate Insolvency Resolution Process (CIRP) due to the Corporate Debtor's default in payment of an operational debt amounting to Rs. 1,37,59,251/-, including interest. The application was filed due to non-payment of dues for goods supplied by the Operational Creditor to the Corporate Debtor.

## Facts

Prashant D. Agarwal, an Operational Creditor operating as M/s. M.S. Enterprises, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Avni Yarns Private Ltd, the Corporate Debtor, seeking initiation of Corporate Insolvency Resolution Process (CIRP). The operational debt claimed was Rs. 1,37,59,251/-, including interest, due to non-payment for goods supplied. The first date of default was mentioned as 19.04.2019. The Corporate Debtor raised defenses, including disputes over the quality of goods, the validity of interest claims, and the applicability of the threshold limit. A payment of Rs. 3,03,963/- was made by the Corporate Debtor on 30.01.2021, post the issue of demand notice. The invoices contained clauses regarding interest in

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## Issues and analysis

### Issue 1: Whether the application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, is …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016, specifies the requirements for an

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**Reasoning:** The Adjudicating Authority examined the application and found it to be complete in terms

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**Interpretation:** Section 9 outlines the procedure and requirements for an operational creditor

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**Application:** The Adjudicating Authority determined that the application met all the

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## Parties

- **Judges:** SHAMMI…; SAMEER…
- **Appellants:** Prashant D.…
- **Respondents:** Avni Yarns…; Avni Yarns…

## Timeline

- **2017-01-01 — Business Tran…**: Corporate debtor and operational creditor entered into business transaction for buying…
- **2019-04-19 — First Date of…**: First date of default mentioned…

## 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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