# In the matter of Faridabad Autocomp System Pvt. Ltd.

> NCLT judgment dated 2023-11-23. Citation: TCN-2023-NCLT-00592. Royal Manpower Services, through its proprietor Mr. Vasudev, filed an application under Section…

- **Court:** NCLT
- **Order date:** 23 Nov 2023
- **Citation:** TCN-2023-NCLT-00592
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/faridabad-autocomp-system-pvt-ltd-3a321390

## Summary

### Background

Royal Manpower Services, through its proprietor Mr. Vasudev, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Faridabad Autocomp System Private Limited, alleging a default of Rs. 14,15,544/- along with interest of Rs. 3,11,419. The Operational Creditor claimed to have provided manpower services to the Corporate Debtor in July and August 2017, raising invoices amounting to Rs. 49,95,331/-, with Rs. 11,04,125/- outstanding against invoices No 0029 and 0030 dated 01.09.2017. The Corporate Debtor contested the application, arguing that the petitioner concealed vital facts, that a sole proprietorship is not a legal entity, and that there was a pre-existing dispute between

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## Facts

Royal Manpower Services, an operational creditor, filed an application to initiate CIRP against Faridabad Autocomp System Pvt. Ltd., the corporate debtor, under Section 9 of the IBC, claiming a default of Rs. 14,15,544/- plus interest of Rs. 3,11,419/- for unpaid manpower services provided in July and August 2017. The operational creditor sent a demand notice dated 07.08.2018, which was delivered via email on 08.08.2019 and physically on 09.08.2018. The corporate debtor replied on 29.08.2018. The corporate debtor argued that the operational creditor concealed vital facts, that a sole proprietorship cannot sue in its own name, and that a pre-existing dispute existed. The corporate debtor presented a police complaint dated 14.10.2017, alleging poor services, disruption

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## Issues and analysis

### Issue 1: Whether a sole proprietor can file an application under IBC in his name and on behalf of the …

**Ratio:** A sole proprietor can file an application under the IBC in his name and on behalf of the

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**Reasoning:** The NCLT relied on the judgment of the Hon'ble NCLAT in the matter of Neeta Saha, Member

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**Interpretation:** This clarifies that a sole proprietorship, despite not being a separate legal

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**Application:** In this case, Royal Manpower Services, a sole proprietorship, filed the

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## Parties

- **Judges:** SHRI. BACHU…; SHRI. RAHUL…
- **Appellants:** Royal Manpower…
- **Respondents:** M/s Faridabad…

## Timeline

- **2017-07-01 — Manpower Services…**: Operational Creditor provided manpower services to the Corporate Debtor in July and…
- **2017-09-01 — Invoices…**: Invoices No 0029 and 0030 dated…

## 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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