# In the matter of Palavi Dealers Private Limited

> NCLT judgment dated 2024-01-11. Citation: TCN-2024-NCLT-03158. The case involves a Company Petition filed by V. Singhi & Associates, the Operational Creditor,…

- **Court:** NCLT
- **Order date:** 11 Jan 2024
- **Citation:** TCN-2024-NCLT-03158
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/palavi-dealers-private-limited-06078403

## Summary

### Background

The case involves a Company Petition filed by V. Singhi & Associates, the Operational Creditor, under Section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC), seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Pallavi Dealers Private Limited, the Corporate Debtor. The Operational Creditor claimed an amount of Rs. 2,70,550/- was due and payable by the Corporate Debtor, with the date of default specified as 16.01.2018.

## Facts

V. Singhi & Associates, an Operational Creditor, filed a Company Petition under Section 9 of the IBC, 2016, seeking to initiate CIRP against Pallavi Dealers Private Limited, the Corporate Debtor. The claim was for Rs. 2,70,550/- due for services rendered between October 1, 2016, and January 31, 2018. The date of default was specified as January 16, 2018. The Corporate Debtor admitted to availing the services but cited poor financial condition as the reason for non-payment. The Operational Creditor had issued invoices and a demand letter, but the Corporate Debtor failed to respond or make payments. The Corporate Debtor was involved in trading scrap of mixed metals and faced various civil and criminal cases, leading to its loss-making status. The NCLT found that the

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in …

**Ratio:** The admission by the Corporate Debtor of its liability and its inability to pay due to

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**Reasoning:** The Corporate Debtor admitted to availing the services of the Operational Creditor and

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**Interpretation:** The IBC defines 'default' as non-payment of debt when it has become due and

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**Application:** The Corporate Debtor's admission of liability and inability to pay, despite

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## Parties

- **Judges:** Anu Jagmoha…; KISHORE VEMULAPALL…
- **Appellants:** V. Singhi &…
- **Respondents:** Pallavi Dealers…
- **Advocates:** Pooja B…; Sushil…; +2 more

## Timeline

- **2007-02-03 — Incorporation of…**: Pallavi Dealers Private Limited…
- **2016-10-01 — Service Perio…**: Operational Creditor started…

## 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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