# In the matter of K.G.N.Deccan Engineering Industries Private Limited CP(IB) No. 64-9-HDB-2021

> NCLT judgment dated 2022-10-19. Citation: TCN-2022-NCLT-00671. Usha Enterprises filed an application under Section 9 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 19 Oct 2022
- **Citation:** TCN-2022-NCLT-00671
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/kgndeccan-engineering-industries-private-limited-cpib-no-64-9-hdb-2021-178bc1fd

## Summary

### Background

Usha Enterprises filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against K.G.N. Deccan Engineering Industries Private Limited, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The applicant claimed that the corporate debtor defaulted in payment of Rs. 1,40,32,565/- for supplies made during 2018 and 2019. Despite repeated reminders and a demand notice, the respondent failed to make the payment. The respondent issued post-dated cheques admitting liability but did not honor them. The applicant filed an Interlocutory Application alleging the respondent was attempting to dispose of assets. The respondent paid Rs. 1,05,21,945/- via RTGS on 21-02-2021, but a balance remained outstanding.

## Facts

Usha Enterprises, an operational creditor, claimed that K.G.N. Deccan Engineering Industries Private Limited, the corporate debtor, defaulted on payments for supplies made in 2018 and 2019, amounting to Rs. 1,40,32,565/-. Usha Enterprises issued a demand notice on 14.01.2021. K.G.N. Deccan Engineering Industries Private Limited issued post-dated cheques admitting liability on 21.01.2021, but the cheques were not honored. Usha Enterprises filed an Interlocutory Application alleging asset disposal by K.G.N. Deccan Engineering Industries Private Limited. K.G.N. Deccan Engineering Industries Private Limited paid Rs. 1,05,21,945/- via RTGS on 21.02.2021, leaving a balance of Rs. 62,57,927/- (Rs. 35,10,620/- principal and Rs. 27,47,307/- interest). K.G.N. Deccan Engineering

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## Issues and analysis

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

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016 allows an operational creditor to

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**Reasoning:** The Adjudicating Authority observed that the Corporate Debtor had made part payments,

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

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**Application:** The Adjudicating Authority applied Section 9 to the facts of the case, noting

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## Parties

- **Judges:** Venkata Ramakrishn…; Shri. Veera…
- **Appellants:** Usha Enter…
- **Respondents:** K.G.N Deccan…

## Timeline

- **2018-01-01 — Supplies made by…**: Usha Enterprises made supplies to K.G.N. Deccan Engineering Industries Private Limited…
- **2019-01-01 — Supplies made by…**: Usha Enterprises made supplies to K.G.N. Deccan Engineering Industries Private Limited…

## 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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