# In the matter of Chiraag Vyapaar Pvt. Ltd. C.P (IB) No.306-KB-2020

> NCLT judgment dated 2022-04-01. Citation: TCN-2022-NCLT-03443. The case involves an application under Section 9 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 1 Apr 2022
- **Citation:** TCN-2022-NCLT-03443
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/chiraag-vyapaar-pvt-ltd-cp-ib-no306-kb-2020-6965c31c

## Summary

### Background

The case involves an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, filed by Rohit Ferro-Tech Ltd. (Operational Creditor) against Chiraag Vyapaar Pvt. Ltd. (Corporate Debtor) for initiating the Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed that the Corporate Debtor defaulted on payments for goods supplied, leading to an outstanding debt. The Corporate Debtor admitted to the debt and financial difficulties but argued for an opportunity to resolve the disputes amicably and repay the debt. The Operational Creditor contended that despite repeated reminders and a demand notice, the Corporate Debtor failed to pay the outstanding amounts or respond adequately.

## Facts

Rohit Ferro-Tech Ltd. (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Chiraag Vyapaar Pvt. Ltd. (Corporate Debtor) for unpaid operational debt. The Operational Creditor supplied TMT bars, C.R. Coils, GC Sheets, HR Coils, MS Round, and MS Angles to the Corporate Debtor. The Corporate Debtor issued 11 dispatch memos for the supplies. The Corporate Debtor made some payments, but they did not correspond to specific invoices, resulting in an outstanding debt. The Operational Creditor issued a demand notice on October 25, 2019, under Section 8 of the Code, but the Corporate Debtor did not pay or reply. The Corporate Debtor admitted to the debt and financial difficulties in its reply but claimed pre-existing

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## Issues and analysis

### Issue 1: Whether the application 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 court considered the submissions of both parties and found that the Corporate Debtor

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**Interpretation:** The court interpreted Section 9 of the IBC to mean that if a corporate debtor

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**Application:** The court applied the ratio to the facts of the case, noting that the Corporate

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## Parties

- **Judges:** RohitKa…; Harish Chander…
- **Appellants:** Rohit Ferro Tech…
- **Respondents:** Chiraag Vyapaar…

## Timeline

- **2019-10-25 — Demand Notice…**: The Operational Creditor issued a demand notice to the Corporate Debtor under Section 8…
- **2020-01-21 — Petition…**: The Operational Creditor filed the present…

## 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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