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

> NCLT judgment dated 2023-07-04. Citation: TCN-2023-NCLT-02683. 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-02683
- **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-ab826d64

## Summary

### Background

The case involves a petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) by Nitin Sharma, Partner, Accurate Corrugation Industries (Operational Creditor/Petitioner) to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Hindustan Spirits Limited (Corporate Debtor/Respondent). 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. The Operational Creditor supplied corrugation boxes to the Corporate Debtor, and invoices were raised between 14.12.2016 and 22.03.2017. The Corporate Debtor failed to make payments despite repeated reminders.

## Facts

Accurate Corrugation Industries, the Operational Creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Hindustan Spirits Limited, the Corporate Debtor. The Operational Creditor claimed that the Corporate Debtor defaulted on payments for corrugation boxes supplied between 14.12.2016 and 22.03.2017, resulting in a total outstanding amount of Rs. 10,50,950/- as principal and Rs. 8,06,100/- as interest till 31.07.2019. A demand notice was issued on 05.08.2019. The Corporate Debtor argued that there was a pre-existing dispute, pointing to a Memorandum of Understanding indicating a dispute since 2018. The Corporate Debtor also claimed that the Operational Creditor had

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## Issues and analysis

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

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

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**Reasoning:** The court noted that the demand notice dated 05.08.2019 was issued by the operational

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

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**Application:** In this case, the court found that the demand notice was duly served on the

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## Parties

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

## Timeline

- **2005-02-07 — Incorporation of…**: M/s Hindustan Spirits Limited was…
- **2016-01-01 — Corporate Debtor…**: In 2016, the Corporate Debtor approached the Operational Creditor to appoint them as 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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