# In the matter of Cosmic Export Solutions (India) Private Limited CP (IB) No. 369-MB-IV-2022

> NCLT judgment dated 2023-06-06. Citation: TCN-2023-NCLT-03074. The case involves an application filed by Kepuce Footwear Private Limited, the Operational…

- **Court:** NCLT
- **Order date:** 6 Jun 2023
- **Citation:** TCN-2023-NCLT-03074
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/cosmic-export-solutions-india-private-limited-cp-ib-no-369-mb-iv-2022-6ec332fd

## Summary

### Background

The case involves an application filed by Kepuce Footwear Private Limited, the Operational Creditor, against Cosmic Export Solutions (India) Private Limited, the Corporate Debtor, under Section 9 of the Insolvency & Bankruptcy Code, 2016, for initiating the Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed a debt of Rs. 2,20,79,119 with a default date of 07.06.2018. The Corporate Debtor contested the application, citing a settlement agreement, defects in goods supplied, and the Operational Creditor being struck off from the Register of Companies.

## Facts

Kepuce Footwear Private Limited (Operational Creditor) filed an application under Section 9 of the Insolvency & Bankruptcy Code, 2016, against Cosmic Export Solutions (India) Private Limited (Corporate Debtor) for initiating CIRP due to a default of Rs. 2,20,79,119, with the default date being 07.06.2018. The Operational Creditor is engaged in the production of footwear, and the Corporate Debtor was a regular purchaser since 2016. The Corporate Debtor issued purchase orders and received goods. The Corporate Debtor made a last payment of Rs. 5,00,000 on 07.06.2018. The Operational Creditor sent demand notices on 24.04.2021 and 27.12.2021. The Corporate Debtor claimed defects in the goods supplied and cited a settlement agreement dated 24.02.2018, where the Corporate

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## Issues and analysis

### Issue 1: Whether the application under Section 9 of the I&B Code is maintainable despite the Corporate …

**Ratio:** A settlement agreement must be validly executed by authorized representatives of both

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**Reasoning:** The NCLT found that the settlement agreement was signed by Mr. Premchand Sharma, whose

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**Interpretation:** The court interpreted that a settlement agreement requires proper authorization

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**Application:** The NCLT applied the ratio to the facts by finding that the Corporate Debtor

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## Parties

- **Judges:** Prabhat…; KISHORE VEMULAPALL…
- **Appellants:** Kepuce Footwear…
- **Respondents:** Cosmic Export…

## Timeline

- **2016-01-01 — Business Rela…**: Corporate Debtor was a regular purchaser of footwear from the Operational Creditor since…
- **2017-10-06 — Last Pur…**: The Corporate Debtor had purchased the goods lastly from the operational creditor on…

## 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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