# In the matter of Bharat Potteries Private Limited

> NCLT judgment dated 2023-10-12. Citation: TCN-2023-NCLT-01277. M/s Mustafa Enterprises, an operational creditor, filed an application under Section 9 of the…

- **Court:** NCLT
- **Order date:** 12 Oct 2023
- **Citation:** TCN-2023-NCLT-01277
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bharat-potteries-private-limited-ab5186f8

## Summary

### Background

M/s Mustafa Enterprises, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Bharat Potteries Limited, the corporate debtor, due to non-payment of operational dues. The operational debt arose from the supply of calcium phosphate. The corporate debtor disputed the claim, alleging deficiency in the quality of goods. A settlement agreement was reached between the parties, with the corporate debtor agreeing to pay Rs. 14,00,000/- as full and final payment. The corporate debtor made payments totaling Rs. 13,50,000/-.

## Facts

M/s Mustafa Enterprises (Operational Creditor) supplied 54 metric tonnes of calcium phosphate to M/s Bharat Potteries Limited (Corporate Debtor) against two purchase orders dated 28.03.2017. The total amount due was $27,052.50 (USD). The Corporate Debtor failed to make the payment. The Operational Creditor issued a demand notice dated 10.10.2019 under Section 8 of the IBC. The Corporate Debtor issued a debit note dated 26.09.2019 alleging defects in the quality of goods. The Corporate Debtor admitted owing Rs. 10,91,935/-. A settlement agreement was reached between the parties, with the Corporate Debtor agreeing to pay Rs. 14,00,000/- as full and final payment. The Corporate Debtor paid Rs. 13,50,000/- in installments. The Operational Creditor filed an application

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## Issues and analysis

### Issue 1: Whether the Demand Notice under Section 8 of the IBC, …

**Ratio:** Section 8 of the IBC requires an operational creditor to deliver a demand notice on

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**Reasoning:** The Adjudicating Authority found that the Applicant in Form - 4 had served the Demand

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**Interpretation:** The service of a demand notice under Section 8 is a mandatory requirement for

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**Application:** In this case, the demand notice was served to the Corporate Debtor, fulfilling

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## Parties

- **Judges:** Deep Chandr…; ATUL CHAT…
- **Appellants:** M/S MUSTAFA…
- **Respondents:** M/S BHARAT…

## Timeline

- **2017-03-28 — Purchase…**: Corporate Debtor placed two purchase orders for the supply of 50 metric tonnes of calcium…
- **2017-04-10 — Bill of L…**: Applicant supplied 54 metric Tonnes of calcium phosphate vide two bills of lading dated…

## 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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