# In the matter of Kajaria Bathwaee Private Limited

> NCLT judgment dated 2023-12-01. Citation: TCN-2023-NCLT-00484. The applicant, M/s SVS Marketing Sanitaryware Private Limited, filed a petition under Section 9…

- **Court:** NCLT
- **Order date:** 1 Dec 2023
- **Citation:** TCN-2023-NCLT-00484
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/kajaria-bathwaee-private-limited-769d9ead

## Summary

### Background

The applicant, M/s SVS Marketing Sanitaryware Private Limited, filed a petition under Section 9 of the IBC, 2016, to initiate the Corporate Insolvency Resolution Process against M/s. Kajaria Bathware Private Limited, alleging an operational debt arising from unsold stock, stock interest, warehouse charges, bad debt, and compensation due to a breach of a distributorship agreement.

## Facts

M/s SVS Marketing Sanitaryware Private Limited, the applicant and operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC, 2016), seeking to initiate the Corporate Insolvency Resolution Process against M/s. Kajaria Bathware Private Limited, the respondent. The applicant claimed to be the sole distributor for the corporate debtor in an exclusive area, as per a distributorship agreement that was renewed periodically. The dispute arose when the supply of goods to dealers was discontinued, leading to an accumulation of unsold stock in the applicant's godown. The applicant claimed an operational debt of Rs. 7,33,64,097.88 as of February 28, 2023, which included unsold stock, stock interest, warehouse charges, bad debt, and

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## Issues and analysis

### Issue 1: Whether the amalgamation between a Sole Proprietorship Firm and a Company is valid in the eyes of …

**Ratio:** An amalgamation between a sole proprietorship firm and a company is not permissible under

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**Reasoning:** The NCLT referred to Sections 230-232 of the Companies Act, 2013, which deal with

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**Interpretation:** The court interpreted 'Company' strictly according to Section 2(20) of the

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**Application:** In this case, the amalgamation agreement was between M/s SVS Marketing

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## Parties

- **Judges:** Sh. Ashok Kumar…; L. N. G…
- **Appellants:** M/s SVS Marketing…
- **Respondents:** M/s Kajaria…
- **Advocates:** For the Applicant:…; For the Respondent…

## Timeline

- **May 22, 2013 — Company Incor…**: M/s. Kajaria Bathware Private…
- **July 15, 2016 — Distributorship…**: A Distributorship Agreement was executed between the Respondent and Mr. Shibu M…

## 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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