# In the matter of Life Essentials Personal Care Private Limited

> NCLT judgment dated 2023-07-06. Citation: TCN-2023-NCLT-02639. Stella Industries Limited, the operational creditor, filed a petition under Section 9 of the…

- **Court:** NCLT
- **Order date:** 6 Jul 2023
- **Citation:** TCN-2023-NCLT-02639
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/life-essentials-personal-care-private-limited-a6c20152

## Summary

### Background

Stella Industries Limited, the operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Life Essentials Personal Care Private Limited, the corporate debtor, due to unpaid operational debt. The operational creditor claimed a default amount of Rs. 45,72,479.45/-, including interest. The corporate debtor contested the petition, alleging false entries in the ledger account and raising debit notes for inferior quality goods and excise duty evasion. The Adjudicating Authority examined the facts, submissions, and documents presented by both parties.

## Facts

Stella Industries Limited (Operational Creditor) supplied goods to Life Essentials Personal Care Private Limited (Corporate Debtor) as per invoices. The payment terms stipulated 30% payment upon delivery and the remaining amount via post-dated cheques within 45 days. The Corporate Debtor defaulted on payments, leading to a claimed default of Rs. 45,72,479.45/-, including Rs. 11,31,314.45 in interest. The default occurred on 30.11.2016, the date of the last invoice (Rs. 13,61,189/-), with 30% due on the same date and 70% on 15.01.2017. The Operational Creditor issued a demand notice on 29.12.2018, which was delivered to the Corporate Debtor via registered post. The Corporate Debtor filed a reply stating false entries in the ledger account between 01.04.2014 and

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## Issues and analysis

### Issue 1: Whether the demand notice in Form 4 …

**Ratio:** A demand notice is considered duly served if it is delivered to the corporate debtor via

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**Reasoning:** The Adjudicating Authority observed that the demand notice was delivered to the corporate

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**Interpretation:** The legal principle is that proper service of a demand notice is a prerequisite

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**Application:** In this case, the demand notice was sent via registered post and received by

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## Parties

- **Judges:** Harnam Singh…; SUBRATA KUM…
- **Appellants:** Stella Industries…
- **Respondents:** Life Essentials…

## Timeline

- **2013-11-07 — Incorporation of…**: Life Essentials Personal Care…
- **2016-11-30 — Date of D…**: Default occurred on the date of the last…

## 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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