# In the matter of IOTA Automation Private Limited IBA-992-2019

> NCLT judgment dated 2022-03-25. Citation: TCN-2022-NCLT-03531. The case involves an application filed by Fomra Electricals, the Operational Creditor, against…

- **Court:** NCLT
- **Order date:** 25 Mar 2022
- **Citation:** TCN-2022-NCLT-03531
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/iota-automation-private-limited-iba-992-2019-122a8909

## Summary

### Background

The case involves an application filed by Fomra Electricals, the Operational Creditor, against Iota Automation Private Limited, the Corporate Debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, for initiating the Corporate Insolvency Resolution Process (CIRP) due to unpaid operational debt. The Operational Creditor claimed Rs.9,62,370.52/- (inclusive of 24% interest p.a.) was due for the supply of electrical products, with payment due from Invoice No: HOGSTLS171808067 dated 28.02.2018. The Corporate Debtor had filed a counter statement alleging delays in the supply of goods. The application was initially admitted on 23.12.2020, then closed on 11.01.2021, and subsequently revived on 17.02.2022.

## Facts

Fomra Electricals (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Iota Automation Private Limited (Corporate Debtor) for unpaid operational debt amounting to Rs.9,62,370.52/- (inclusive of 24% interest p.a.) for the supply of electrical products. The payment was due from Invoice No: HOGSTLS171808067 dated 28.02.2018. A cheque issued by the Corporate Debtor was returned due to insufficient funds. The Operational Creditor issued a Form-III Statutory Demand Notice on 10.07.2019, which the Corporate Debtor did not reply to. The Corporate Debtor filed a counter statement alleging delays in the supply of goods, leading to project delays and order cancellations. The Corporate Debtor acknowledged a liability of

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## Issues and analysis

### Issue 1: Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, is …

**Ratio:** Section 9 of the IBC allows an operational creditor to initiate CIRP against a corporate

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**Reasoning:** The Tribunal noted that the Corporate Debtor had acknowledged a liability of

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

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**Application:** The Corporate Debtor's acknowledgment of liability, along with the unpaid

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## Parties

- **Judges:** R. Sucha…; SAMEER…
- **Appellants:** Fomra Elect…
- **Respondents:** IOTA AUTOMATION…
- **Advocates:** Alpa…; K.G.Balasubramania…

## Timeline

- **2018-02-28 — Invoice…**: Invoice No: HOGSTLS171808067 issued by Fomra Electricals to Iota Automation Private…
- **2019-07-10 — Statutory Dema…**: Form-III Statutory Demand Notice issued by Fomra Electricals to Iota Automation Private…

## 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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