# In the matter of Nayek Paper Industries Limited

> NCLT judgment dated 2024-11-21. Citation: TCN-2024-NCLT-00189. The case involves an application under Section 9 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 21 Nov 2024
- **Citation:** TCN-2024-NCLT-00189
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/nayek-paper-industries-limited-2b7ae53c

## Summary

### Background

The case involves an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, by Tirupati Commercials, an operational creditor, against Nayek Paper Industries Limited, the corporate debtor. The application seeks initiation of the Corporate Insolvency Resolution Process (CIRP) due to outstanding dues. A demand notice was issued to the corporate debtor, but no response or dispute was raised. A Memorandum of Settlement (MOS) was signed, but the corporate debtor failed to fulfill its terms. The operational creditor then filed a Restoration Application to revive the Corporate Petition.

## Facts

Tirupati Commercials, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Nayek Paper Industries Limited, the corporate debtor, due to outstanding dues of Rs. 80,18,014/-, including principal and interest. The principal debt of Rs. 76,36,204/- was due from 18.07.2018, with interest calculated at 24% per annum until 03.10.2018. A demand notice was issued on October 3, 2018, under Section 8 of the IBC, but the corporate debtor did not respond or dispute the claim. A Memorandum of Settlement (MOS) was signed on February 14, 2022, requiring the corporate debtor to pay Rs. 60,00,000/- within six months, but only Rs. 20,00,000/- was paid. The operational creditor filed a Restoration Application to revive the

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## Issues and analysis

### Issue 1: Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, for initiating …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016, allows an operational creditor to

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**Reasoning:** The court noted that the application was filed under Section 9 of the IBC and that the

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**Interpretation:** Section 9 provides the mechanism for operational creditors to initiate CIRP

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**Application:** The court found that the application met the requirements of Section 9, as the

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## Parties

- **Judges:** BIDISHA BA…; D. Ar…
- **Appellants:** Tirupati Commercia…
- **Respondents:** Nayek Paper…
- **Advocates:** Rishabh K…; Sandip Sh…; +1 more

## Timeline

- **2017-11-04 — Invoices for wastepaper…**: Invoices for wastepaper supplied between…
- **2018-07-18 — Principal D…**: Principal Debt due is Rs.…

## 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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