# In the matter of Multicity Digital Consortium Private Limited IBA-696-2020

> NCLT judgment dated 2022-06-27. Citation: TCN-2022-NCLT-02017. My Box Technologies Private Limited, an Operational Creditor, filed an application under…

- **Court:** NCLT
- **Order date:** 27 Jun 2022
- **Citation:** TCN-2022-NCLT-02017
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/multicity-digital-consortium-private-limited-iba-696-2020-ae6bf8ad

## Summary

### Background

My Box Technologies Private Limited, an Operational Creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Multicity Digital Consortium Private Limited, the Corporate Debtor, for defaulting on payments for the supply of Set Top Boxes (STBs). The Operational Creditor sought initiation of the Corporate Insolvency Resolution Process (CIRP), declaration of a moratorium, and appointment of an Interim Resolution Professional (IRP). The Corporate Debtor contested the application, claiming the default occurred during the COVID-19 period, making it subject to Section 10A of the IBC, 2016, and that the default amount was below the threshold. They also alleged a pre-existing dispute.

## Facts

My Box Technologies Private Limited (Operational Creditor) supplied Set Top Boxes (STBs) to Multicity Digital Consortium Private Limited (Corporate Debtor) under a Supply Agreement dated 28.05.2018. The Corporate Debtor placed purchase orders, and the Operational Creditor supplied the STBs and issued invoices. As per clause 6.1 of the agreement, payments were to be made in installments: 40% advance, 10% at the end of the 30th day, 10% at the end of the 60th day, and the remaining 40% at the end of the 90th day from the supply of STBs. The Corporate Debtor failed to make the agreed payments, leading to a default of Rs. 1,67,33,866/-. The Operational Creditor sent emails demanding payment. The Corporate Debtor sent a complaint letter dated 13.03.2020 alleging issues with

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## Issues and analysis

### Issue 1: Whether the application for initiation of CIRP is hit by Section 10A of the IBC, 2016, considering …

**Ratio:** Section 10A of the IBC, 2016, suspends the initiation of CIRP for defaults occurring on

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**Reasoning:** The NCLT observed that the invoices were raised on 31.10.2019, 30.11.2019 and 31.12.2019

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**Interpretation:** Section 10A provides a moratorium on initiating CIRP for defaults arising

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**Application:** Since the default occurred before March 25, 2020, Section 10A of the IBC does

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## Parties

- **Judges:** (Retd.) S.…; Anil Ku…
- **Appellants:** My Box Technologie…
- **Respondents:** Multicity Digital…

## Timeline

- **2018-05-28 — Supply Agr…**: A Supply Agreement was entered into between My Box Technologies Private Limited and…
- **2019-02-16 — Purchase…**: Purchase Order No.…

## 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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