# In the matter of Hindustan Spirits Limited CP (IB) No. 656-Chd-Hry-2019

> NCLT judgment dated 2023-07-04. Citation: TCN-2023-NCLT-02696. The case involves a petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016…

- **Court:** NCLT
- **Order date:** 4 Jul 2023
- **Citation:** TCN-2023-NCLT-02696
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/hindustan-spirits-limited-cp-ib-no-656-chd-hry-2019-19fefd70

## Summary

### Background

The case involves a petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) by Nitin Sharma, Partner of Accurate Corrugation Industries (Operational Creditor), seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Hindustan Spirits Limited (Corporate Debtor). The Operational Creditor claimed a default amount of Rs. 10,50,950/- plus interest of Rs. 8,06,100/- till 31.07.2019. The Corporate Debtor argued that there was a pre-existing dispute and that the application was not maintainable.

## Facts

Accurate Corrugation Industries, the Operational Creditor, filed a petition under Section 9 of the IBC to initiate CIRP against Hindustan Spirits Limited, the Corporate Debtor. The Operational Creditor claimed a default of Rs. 10,50,950/- plus interest. The Corporate Debtor argued a pre-existing dispute. The Corporate Debtor had approached the Operational Creditor in 2016 to act as a supplier agent for corrugation boxes. The Operational Creditor maintained a running account. As of 24.04.2018, the principal amount outstanding was Rs. 10,50,950/-, and the interest till 31.07.2019 was Rs. 8,06,100/-. The Corporate Debtor failed to make payments for invoices dated 14.12.2016 to 22.03.2017. A demand notice was issued on 05.08.2019. The Corporate Debtor replied on

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## Issues and analysis

### Issue 1: Whether the demand notice in …

**Ratio:** The demand notice must be duly served on the corporate debtor for the application to be

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**Reasoning:** The Adjudicating Authority noted that the demand notice dated 05.08.2019 was issued by

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**Interpretation:** Proper service of the demand notice is a prerequisite for initiating CIRP under

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**Application:** The demand notice was deemed duly served as the Corporate Debtor acknowledged

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## Parties

- **Judges:** Harnam Singh…; SUBRATA KUM…
- **Appellants:** Nitin S…
- **Respondents:** M/s Hindustan…

## Timeline

- **2016-01-01 — Corporate Debtor…**: The Corporate Debtor approached the Operational Creditor to appoint them as a supplier…
- **2016-12-14 — Invoices…**: Invoices issued from 14.12.2016 to…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60 — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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