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

> NCLT judgment dated 2022-06-27. Citation: TCN-2022-NCLT-02020. My Box Technologies Private Limited, an Operational Creditor, filed an application under…

- **Court:** NCLT
- **Order date:** 27 Jun 2022
- **Citation:** TCN-2022-NCLT-02020
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/multicity-digital-consortium-private-limited-iba-696-2020-f60b0855

## 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 a payment of Rs. 1,67,33,866/-. The Operational Creditor supplied Set Top Boxes (STB) to the Corporate Debtor based on a Supply Agreement dated 28.05.2018. The Corporate Debtor failed to make payments as per the agreed terms, leading to the application for initiating Corporate Insolvency Resolution Process (CIRP).

## Facts

My Box Technologies Private Limited (Operational Creditor) supplied Set Top Boxes (STB) to Multicity Digital Consortium Private Limited (Corporate Debtor) based on a Supply Agreement dated 28.05.2018. The Corporate Debtor placed a purchase order, and the Operational Creditor supplied the STB and issued invoices. As per clause 6.1 of the agreement, the payment terms were 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 various 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 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 court examined the dates of the invoices and the payment terms to determine when the

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**Interpretation:** Section 10A is interpreted to provide relief to corporate debtors facing

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

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## Parties

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

## Timeline

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

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14(1) — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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