# In the matter of Nikhil Footwears Pvt. Ltd. IB No. 2032-ND-2019

> NCLT judgment dated 2022-03-10. Citation: TCN-2022-NCLT-03810. The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 10 Mar 2022
- **Citation:** TCN-2022-NCLT-03810
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/nikhil-footwears-pvt-ltd-ib-no-2032-nd-2019-d88ad539

## Summary

### Background

The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by Chowdhry Rubber & Chemical Pvt. Ltd. (Operational Creditor) against Nikhil Footwears Pvt. Ltd. (Corporate Debtor) to initiate the Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed that the Corporate Debtor defaulted on payments for goods supplied. Earlier attempts to resolve the matter through a settlement agreement dated 27.01.2018 failed, and previous applications were dismissed. The Corporate Debtor raised objections, including claims of the application being time-barred and non-compliance with IBC provisions.

## Facts

Chowdhry Rubber & Chemical Pvt. Ltd. (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Nikhil Footwears Pvt. Ltd. (Corporate Debtor) for initiating CIRP due to unpaid dues. The Operational Creditor is a company incorporated under the Companies Act, 1956, engaged in manufacturing footwears. The Corporate Debtor had approached the Operational Creditor for raw materials, placing verbal purchase orders. A settlement agreement was executed on 27.01.2018, but the Corporate Debtor failed to adhere to its terms. An earlier application (IB/1394/ND/2018) was dismissed for non-prosecution on 05.03.2019. The Corporate Debtor made a part payment of Rs. 2,00,000 after the filing of IB/1394/2018. The Operational

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor is barred by limitation under Section …

**Ratio:** Section 19 of the Limitation Act stipulates that a fresh period of limitation shall be

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**Reasoning:** The court reasoned that the Corporate Debtor's admission of making partial payments in

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**Interpretation:** Section 238A of the IBC must be read in conjunction with Section 19 of the

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**Application:** The Corporate Debtor's partial payments after the initial default extended the

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## Parties

- **Judges:** DHARMINDER…; SUMITA PURK…; +1 more
- **Appellants:** M/s. Chowdhry…
- **Respondents:** M/s. Nikhil…

## Timeline

- **2018-01-27 — Settlement Ag…**: A settlement agreement was executed between Chowdhry Rubber & Chemical Pvt. Ltd. and…
- **2019-03-05 — Dismissal of Ap…**: Application IB/1394/ND/2018 was…

## 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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