# In the matter of Farm2energy Private Limited

> NCLT judgment dated 2024-09-09. Citation: TCN-2024-NCLT-00641. M/s Verbio India Pvt. Ltd. filed an application under Section 9 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 9 Sept 2024
- **Citation:** TCN-2024-NCLT-00641
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/farm2energy-private-limited-6085f047

## Summary

### Background

M/s Verbio India Pvt. Ltd. filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against M/s Farm2Energy Private Limited, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) due to a default in payment. The Operational Creditor and Corporate Debtor entered into an agreement for the supply of paddy biomass, with an advance payment made by the Operational Creditor. However, the Corporate Debtor allegedly failed to supply the agreed quantity of material.

## Facts

M/s Verbio India Pvt. Ltd. (Operational Creditor) and M/s Farm2Energy Private Limited (Corporate Debtor) entered into an agreement for the supply of 20,000 tonnes of paddy biomass, with a total consideration of Rs. 4,40,00,000/-. The Operational Creditor made an advance payment of Rs. 1,19,53,864/- to the Corporate Debtor. The Corporate Debtor supplied material worth Rs. 34,46,136, but the Operational Creditor claimed the Corporate Debtor failed to supply the agreed quantity. The Operational Creditor served a legal notice and a statutory demand notice under Section 8 of the Code for the refund of Rs. 1,19,53,864/-. The Corporate Debtor claimed to have supplied biomass bales worth Rs. 2,20,00,000/-, which were rejected by the Operational Creditor. The date of default

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in the payment of the debt as claimed by the Operational …

**Ratio:** The Adjudicating Authority relied on Section 9 of the Insolvency and Bankruptcy Code,

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**Reasoning:** The Adjudicating Authority found that the Corporate Debtor failed to provide sufficient

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**Interpretation:** The court interpreted Section 9 of the IBC to mean that if the debt is

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**Application:** The Adjudicating Authority applied the ratio to the facts of the case, finding

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## Parties

- **Judges:** Harnam Singh…; D. Ar…
- **Appellants:** Verbio India Pvt.…
- **Respondents:** Farm2Energy…

## Timeline

- **2022-12-16 — Date of D…**: The date of default as mentioned…
- **2023-01-06 — Legal Notice by…**: The Operational Creditor served a…

## 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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