# In the matter of LN Industries India Ltd. CP (IB) No. 17-9-HDB-2022

> NCLT judgment dated 2022-07-01. Citation: TCN-2022-NCLT-01946. The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 1 Jul 2022
- **Citation:** TCN-2022-NCLT-01946
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ln-industries-india-ltd-cp-ib-no-17-9-hdb-2022-d8f351f2

## Summary

### Background

The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by CJ Chemical Pvt Ltd (Operational Creditor) against L N Industries India Ltd (Corporate Debtor) for initiation of Corporate Insolvency Resolution Process (CIRP) due to default in payment of an operational debt. The Operational Creditor claimed a default of Rs. 3,00,50,089, while the Corporate Debtor admitted the debt but disputed the quantum, stating that only Rs. 2,50,00,000 was due. The Operational Creditor had issued a demand notice on 10.12.2021, for a debt that was due and defaulted on 10.02.2020.

## Facts

CJ Chemical Pvt Ltd, the Operational Creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against L N Industries India Ltd, the Corporate Debtor, seeking initiation of Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed that the Corporate Debtor defaulted in payment of an operational debt amounting to Rs. 3,00,50,089. A demand notice in Form-3 was issued on 10.12.2021, for a debt that was due and defaulted on 10.02.2020. The Corporate Debtor admitted the debt but disputed the quantum, contending that only Rs. 2,50,00,000 was due. The Corporate Debtor stated that it had approached the applicant to settle the dues due to financial crises. The Adjudicating Authority noted that the Corporate Debtor did not

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## Issues and analysis

### Issue 1: Whether there is an operational debt as claimed by the applicant due and payable by Corporate …

**Ratio:** Section 5(6) of the Insolvency and Bankruptcy Code, 2016 defines 'dispute' to include a

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**Reasoning:** The Adjudicating Authority reasoned that since the Corporate Debtor admitted the

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**Interpretation:** The interpretation of 'dispute' under Section 5(6) is crucial. The court

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**Application:** In this case, the Corporate Debtor admitted the existence of the debt.

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## Parties

- **Judges:** Dr.Venkata…; SH. VEERA BRAHMA…
- **Appellants:** CJ Chemical Pvt…
- **Respondents:** L N Industries…

## Timeline

- **2020-02-10 — Default…**: Date on which the operational…
- **2021-12-10 — Demand N…**: Operational Creditor issued Form-3…

## 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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