# In the matter of MK Furncraft Private Limited IB No. 3455-ND-2019

> NCLT judgment dated 2022-02-16. Citation: TCN-2022-NCLT-04114. The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by…

- **Court:** NCLT
- **Order date:** 16 Feb 2022
- **Citation:** TCN-2022-NCLT-04114
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/mk-furncraft-private-limited-ib-no-3455-nd-2019-ee9f1106

## Summary

### Background

The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by Woodpeckers India Private Limited (the applicant/operational creditor) to initiate the Corporate Insolvency Resolution Process against M/s. MK Furncraft Private Limited (the respondent/corporate debtor). The corporate debtor allegedly demanded various decorative wood items from the operational creditor between March 6, 2009, and June 2014, for which the applicant raised invoices. The applicant sent a demand notice under Section 8 of the Code on November 27, 2019, for Rs. 46,99,691/-. The corporate debtor acknowledged the debt in its balance sheets for the financial years ending 2016 and 2017.

## Facts

Woodpeckers India Pvt. Ltd. (operational creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against M/s. MK Furncraft Private Limited (corporate debtor). The operational creditor claimed that the corporate debtor demanded decorative wood items between March 6, 2009, and June 2014, raising invoices for the same. A demand notice was sent on November 27, 2019, for Rs. 46,99,691/-. The corporate debtor admitted liability to the extent of Rs. 46,99,691/- in its books of accounts but failed to make the payment. The last payment of Rs. 1,50,000/- was made on July 19, 2016. The corporate debtor acknowledged the dues in its balance sheet and auditor's report for the period ending March 31, 2016, and in the balance sheet for the year

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## Issues and analysis

### Issue 1: Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, is barred by …

**Ratio:** The principle is that if a corporate debtor acknowledges a debt in its balance sheet, it

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**Reasoning:** The court reasoned that the respondent corporate debtor's balance sheet showed

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**Interpretation:** The interpretation is that an acknowledgment of debt in the balance sheet of a

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**Application:** In this case, the corporate debtor acknowledged the trade payables in the

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## Parties

- **Judges:** DHARMINDER…; SUMITA PURK…; +1 more
- **Appellants:** M/s Woodpeckers…
- **Respondents:** M/s. MK Furncraft…

## Timeline

- **2009-03-06 — Supply of…**: The corporate debtor demanded various decorative…
- **2014-06-01 — End of Supply…**: The period during which the corporate debtor demanded decorative wood items from the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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