# In the matter of Hari Govind Texfab (India) Private Limited (IB)-194(ND)2022

> NCLT judgment dated 2022-10-17. Citation: TCN-2022-NCLT-00712. Sangam (India) Limited, the Operational Creditor, filed an application under Section 9 of the…

- **Court:** NCLT
- **Order date:** 17 Oct 2022
- **Citation:** TCN-2022-NCLT-00712
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/hari-govind-texfab-india-private-limited-ib-194nd2022-0691718b

## Summary

### Background

Sangam (India) Limited, the Operational Creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Hari Govind Texfab (India) Private Limited, the Respondent. The Applicant claimed that the Respondent defaulted on payments for denim fabric supplied between 2008 and 2019. Despite a formal understanding for timely payments with a 45-day credit period and 15% interest on default, the Respondent failed to pay the outstanding balance. The Applicant submitted a computation of dues, including principal and interest, with the first invoice dated 20.05.2013 and the last on 26.12.2015. The last payment received was Rs. 3,50,000 on 14.06.2019.

## Facts

Sangam (India) Limited (Applicant/Operational Creditor) supplied denim fabric to M/s Hari Govind Texfab (India) Private Limited (Respondent) between 03.10.2008 and 14.06.2019, totaling Rs. 22,86,55,497/-. The Respondent paid Rs. 20,44,15,371/- on a running account basis, leaving an outstanding balance of Rs. 2,42,40,126/-. The terms included a 45-day credit period and 15% per annum interest on default. The Applicant claimed a total debt of Rs. 5,82,09,276/-, including principal, accrued interest, and old interest, as of 30.09.2021. The first invoice was dated 20.05.2013, and the last was dated 26.12.2015. The last payment of Rs. 3,50,000/- was made on 14.06.2019. The Corporate Debtor failed to make timely payments, leading to the debt falling due. The Applicant issued

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## Issues and analysis

### Issue 1: Whether the application filed under Section 9 of …

**Ratio:** Section 9 of the IBC requires that an application for initiation of CIRP must be filed

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**Reasoning:** The court considered the part payments made by the Respondent between 29.12.2015 and

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**Interpretation:** The interpretation of the limitation period under Section 9 of the IBC is that

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**Application:** In this case, the part payments made by the Respondent extended the limitation

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## Parties

- **Judges:** SH. BACHU VENKAT…; SH. L. N.…
- **Appellants:** Sangam (India)…
- **Respondents:** M/s Hari Govind…
- **Advocates:** Aditya Va…

## Timeline

- **2008-10-03 — Supply of Denim Fabric…**: Applicant started supplying…
- **2019-06-14 — Supply of Denim Fabric…**: Applicant stopped supplying…

## 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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