# In the matter of Hema Automotive Private Limited IB-822-(ND)-2021

> NCLT judgment dated 2022-07-08. Citation: TCN-2022-NCLT-01814. This case involves an application filed by Five Ess Precision Components Private Limited…

- **Court:** NCLT
- **Order date:** 8 Jul 2022
- **Citation:** TCN-2022-NCLT-01814
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/hema-automotive-private-limited-ib-822-nd-2021-edac6acc

## Summary

### Background

This case involves an application filed by Five Ess Precision Components Private Limited (Operational Creditor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Hema Automotive Private Limited (Corporate Debtor) for defaulting on a debt of Rs. 3,34,54,470.42. The Operational Creditor claims that they supplied goods to the Corporate Debtor as per their instructions and requirements. The last invoice was raised on 21.03.2020, with an outstanding amount of Rs. 3,97,50,941.82. The Corporate Debtor had also requested the Operational Creditor to avail a loan, leading to an MOU dated 17.08.2020, but later defaulted on its commitments.

## Facts

Five Ess Precision Components Private Limited (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against Hema Automotive Private Limited (Corporate Debtor). The Operational Creditor claimed that the Corporate Debtor defaulted on a debt of Rs. 3,34,54,470.42. The Operational Creditor supplied goods to the Corporate Debtor based on their instructions. The last invoice was raised on 21.03.2020, with an outstanding amount of Rs. 3,97,50,941.82. The Corporate Debtor requested the Operational Creditor to avail a loan of Rs. 60,00,000, leading to an MOU dated 17.08.2020, where the Corporate Debtor committed to paying Rs. 5,00,000 per month. The Corporate Debtor issued 12 post-dated cheques. The Operational

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## Issues and analysis

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

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

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**Reasoning:** The Tribunal considered the documents and arguments presented by the Operational Creditor

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**Interpretation:** Section 9 provides the mechanism for operational creditors to recover their

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**Application:** The Tribunal applied Section 9 to the facts of the case, determining that the

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## Parties

- **Judges:** SH. P.S.N.…; SH. RAHUL…
- **Appellants:** M/s. Five Ess…
- **Respondents:** M/s. Hema…

## Timeline

- **2020-03-21 — Last Invoice…**: The last invoice for the financial year 2019-2020 was raised on this date, with an…
- **2020-08-17 — MOU Sign…**: The Corporate Debtor entered into an MOU with the Operational Creditor, committing to…

## 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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