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

> NCLT judgment dated 2022-06-27. Citation: TCN-2022-NCLT-02043. My Box Technologies Private Limited, an operational creditor, filed an application under…

- **Court:** NCLT
- **Order date:** 27 Jun 2022
- **Citation:** TCN-2022-NCLT-02043
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/multicity-digital-consortium-private-limited-iba-696-2020-b2314c9c

## 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 initiation of the Corporate Insolvency Resolution Process (CIRP). The application was based on an alleged default in payment for the supply of Set Top Boxes (STBs). The operational creditor claimed that the corporate debtor failed to make payments as per the agreed terms of a supply agreement dated 28.05.2018. The corporate debtor contested the application, arguing that the date of default was incorrect, the default amount was below the threshold, and a pre-existing dispute existed between the parties.

## Facts

My Box Technologies Private Limited (Operational Creditor) supplied Set Top Boxes (STBs) to Multicity Digital Consortium Private Limited (Corporate Debtor) based on a supply agreement dated 28.05.2018. The Corporate Debtor placed purchase orders for the STBs, and the Operational Creditor issued invoices. As per clause 6.1 of the agreement, payment was 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 the

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## Issues and analysis

### Issue 1: Whether the application under Section 9 …

**Ratio:** Section 9(5) of the IBC, 2016, allows an operational creditor to initiate CIRP against a

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**Reasoning:** The court considered the facts and circumstances of the case and the position of law. It

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**Interpretation:** Section 9 of the IBC allows an operational creditor to initiate CIRP if a

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**Application:** The court determined that the Operational Creditor had demonstrated a default

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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…
- **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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