# In the matter of Birla Precision Technologies Ltd.

> NCLT judgment dated 2023-07-27. Citation: TCN-2023-NCLT-02308. The case involves a Company Petition filed by OM Industries, the Operational Creditor, against…

- **Court:** NCLT
- **Order date:** 27 Jul 2023
- **Citation:** TCN-2023-NCLT-02308
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/birla-precision-technologies-ltd-7cea1ba7

## Summary

### Background

The case involves a Company Petition filed by OM Industries, the Operational Creditor, against Birla Precision Technologies Ltd., the Corporate Debtor, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) due to a default of Rs. 1,55,57,967.00. The petition was filed under Section 9 of the Insolvency & Bankruptcy Code, 2016. The Operational Creditor claimed to have supplied resin coated sand to the Corporate Debtor based on several purchase orders and raised 62 invoices between 07.11.2020 and 30.07.2021. The Corporate Debtor made partial payments of Rs. 2,71,400/- and Rs. 2,49,240/- on 30.07.2021 and 13.08.2021, respectively. The Operational Creditor issued a demand notice on 18.09.2021.

## Facts

OM Industries, an Operational Creditor, filed a petition to initiate CIRP against Birla Precision Technologies Ltd., the Corporate Debtor, for a default of Rs. 1,55,57,967.00. OM Industries supplied resin coated sand to Birla Precision based on purchase orders, raising 62 invoices from 07.11.2020 to 30.07.2021. Birla Precision made part payments totaling Rs. 5,20,640.00. OM Industries issued a demand notice on 18.09.2021. Birla Precision argued that many invoices were time-barred under Section 10A of the IBC (defaults occurring between 25.03.2020 and 25.03.2021) and that there was a pre-existing dispute regarding the quality of goods. The NCLT found that 31 invoices fell within the Section 10A period, and the remaining invoices, after deducting part payments, were

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## Issues and analysis

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

**Ratio:** Section 10A of the IBC prohibits the initiation of CIRP for defaults occurring during the

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**Reasoning:** The court examined the due dates of the invoices and determined that 31 invoices fell

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**Interpretation:** Section 10A provides a moratorium on CIRP filings for defaults arising during

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**Application:** The court applied Section 10A by excluding the 31 invoices that fell within the

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## Parties

- **Judges:** Kuldip Kumar…; ANURADHA SANJAY…
- **Appellants:** OM Indus…
- **Respondents:** Birla Precision…
- **Advocates:** Sandesh S…; Shivani De…; +2 more

## Timeline

- **2018-10-13 — Purchase Ord…**: Corporate Debtor issued…
- **2020-09-12 — Purchase Ord…**: Corporate Debtor issued…

## 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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