# In the matter of Keep in Touch Clothing Pvt. Ltd.

> NCLT judgment dated 2023-07-28. Citation: TCN-2023-NCLT-02284. The case involves a Company Petition filed under Section 9 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 28 Jul 2023
- **Citation:** TCN-2023-NCLT-02284
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/keep-in-touch-clothing-pvt-ltd-12d5e72c

## Summary

### Background

The case involves a Company Petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by Mr. Udaivir Singh, the Operational Creditor, against M/s Keep in Touch Clothing Pvt. Ltd., the Corporate Debtor, for initiation of the Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed a default amount of Rs. 7,53,471.56, including principal and interest, for goods sold to the Corporate Debtor. The Corporate Debtor failed to respond to the demand notice, and the Adjudicating Authority directed the applicant to serve notice to the respondent. Despite multiple attempts, the Corporate Debtor did not file a reply, and was set as ex-parte.

## Facts

Mr. Udaivir Singh, proprietor of M/s D.M Lining & Fabrics (Operational Creditor), filed a Company Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against M/s Keep in Touch Clothing Pvt. Ltd. (Corporate Debtor). The Operational Creditor claimed that the Corporate Debtor had placed orders for the purchase of Non-Woven Tricot, Mobilon Tape, Denim Fabric & Polyester Lining Fabrics. The Operational Creditor raised invoices for these purchases. A running ledger account was opened in the name of the Corporate Debtor, showing an outstanding amount of Rs. 6,65,555. The Operational Creditor sent a demand notice dated 14.11.2019 to the Corporate Debtor, but received no response. The total amount claimed in default was Rs. 7,53,471.56, including

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## Issues and analysis

### Issue 1: Whether the amount claimed by the Operational Creditor falls under the ambit of 'Operational Debt' …

**Ratio:** Section 5(21) of the Insolvency and Bankruptcy Code, 2016 defines 'Operational Debt' as a

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**Reasoning:** The Adjudicating Authority reasoned that the Operational Creditor sold certain goods to

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**Interpretation:** The interpretation of 'Operational Debt' under Section 5(21) includes debts

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**Application:** In this case, the Operational Creditor provided goods (Non-Woven Tricot,

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## Parties

- **Judges:** P.S.N. P…; BINOD KUMAR…
- **Appellants:** Udaivir…
- **Respondents:** M/s Keep in Touch…

## Timeline

- **2019-11-01 — Date of D…**: The date on which the Corporate Debtor defaulted on the payment to the Operational…
- **2019-11-14 — Demand N…**: The Operational Creditor sent a demand notice to the Corporate Debtor for the outstanding…

## 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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