# In the matter of No Exit Clothing Private Limited CP (IB) No.669-Chd-Pb-2019

> NCLT judgment dated 2023-04-21. Citation: TCN-2023-NCLT-03681. The case involves a petition filed by Major Brands (India) Pvt. Ltd. (Operational Creditor)…

- **Court:** NCLT
- **Order date:** 21 Apr 2023
- **Citation:** TCN-2023-NCLT-03681
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/no-exit-clothing-private-limited-cp-ib-no669-chd-pb-2019-f460a1b0

## Summary

### Background

The case involves a petition filed by Major Brands (India) Pvt. Ltd. (Operational Creditor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against No Exit Clothing Private Limited (Corporate Debtor). The parties had a shop-in-shop agreement dated 01.06.2012, where the Operational Creditor supplied goods to the Corporate Debtor on a sale or return basis. Payments were to be made monthly, and unsold stocks were to be returned. The agreement expired on 31.05.2015, with the last payment made on 04.10.2016. The Operational Creditor claims an outstanding amount of Rs. 1,38,72,116, which the Corporate Debtor disputes, citing issues with account reconciliation and limitation.

## Facts

Major Brands (India) Pvt. Ltd. (Operational Creditor) filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against No Exit Clothing Private Limited (Corporate Debtor). A shop-in-shop agreement dated 01.06.2012 existed between the parties, where the Operational Creditor supplied goods to the Corporate Debtor on a sale or return basis. The agreement stipulated monthly payments for sold quantities and return of unsold stocks. The agreement expired on 31.05.2015, and the last payment was made on 04.10.2016. The Operational Creditor claims an outstanding amount of Rs. 1,38,72,116, while the Corporate Debtor disputes this amount, citing issues with account reconciliation and limitation. The

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## Issues and analysis

### Issue 1: Whether the demand notice dated 26.07.2019 was duly served by the operational creditor to the …

**Ratio:** A demand notice is considered duly served if it is issued by the operational creditor and

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**Reasoning:** The Adjudicating Authority noted that the demand notice dated 26.07.2019 was issued by

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**Interpretation:** The issuance and receipt of a demand notice are essential steps in initiating

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**Application:** The Adjudicating Authority found that the demand notice was duly served because

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## Parties

- **Judges:** Harnam Singh…; SUBRATA KUM…
- **Appellants:** Major Brands…
- **Respondents:** No Exit Clothing…
- **Advocates:** Surbhi G…; Nikhil J…; +2 more

## Timeline

- **2012-06-01 — Shop-in-Shop A…**: Parties executed a shop-in-shop agreement where the operational creditor would supply…
- **2015-05-31 — Agreement…**: The shop-in-shop agreement…

## 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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