# In the matter of Garvit Innovative Promoters Limited CP No. (IB) 17-ALD-2022

> NCLT judgment dated 2023-02-16. Citation: TCN-2023-NCLT-04578. The case involves an application filed by Noble Co-operative Bank Limited, the Operational…

- **Court:** NCLT
- **Order date:** 16 Feb 2023
- **Citation:** TCN-2023-NCLT-04578
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/garvit-innovative-promoters-limited-cp-no-ib-17-ald-2022-8d74f327

## Summary

### Background

The case involves an application filed by Noble Co-operative Bank Limited, the Operational Creditor, under Section 9 of the Insolvency & Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Garvit Innovative Promoters Limited, the Corporate Debtor. The Corporate Debtor had approached the bank for opening a current cum overdraft account in July 2018. The account was opened with overdraft facility, subject to interest charges of 19% per annum and a penal interest of 2.5% per month if the debtor failed to maintain the minimum balance. The Corporate Debtor failed to maintain financial discipline, resulting in cheque returns due to insufficient funds. The bank account remained overdrawn, leading to continuous levy of interest and

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## Facts

Noble Co-operative Bank Limited, the Operational Creditor, filed an application under Section 9 of the Insolvency & Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Garvit Innovative Promoters Limited, the Corporate Debtor. The Corporate Debtor opened a current cum overdraft account with the bank on July 31, 2018, subject to interest charges of 19% per annum and a penal interest of 2.5% per month for failing to maintain the minimum balance. The Corporate Debtor failed to maintain financial discipline, resulting in cheque returns due to insufficient funds. The bank account remained overdrawn, leading to continuous levy of interest and penal interest. The Operational Creditor issued a demand notice on March 10, 2021, to which

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor under Section 9 of the Insolvency & …

**Ratio:** Section 9 of the Insolvency & Bankruptcy Code, 2016, allows an operational creditor

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**Reasoning:** The Tribunal noted that the application was complete and complied with the relevant

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**Interpretation:** Section 9 provides the mechanism for operational creditors to initiate CIRP

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**Application:** The Tribunal found that the Operational Creditor's application met all the

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## Parties

- **Judges:** Praveen…; Ashish…
- **Appellants:** Noble Co-operative…
- **Respondents:** Garvit Innovative…
- **Advocates:** Sh. Govind…

## Timeline

- **2018-07-31 — Account O…**: Corporate Debtor opened a current cum…
- **2021-03-10 — Demand N…**: Operational Creditor issued a demand…

## 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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