# In the matter of PR Castalloys Private Limited C.P. 655-IB-MB-2020

> NCLT judgment dated 2023-02-01. Citation: TCN-2023-NCLT-04822. Pheonix Industries Limited, the Operational Creditor, filed a Company Petition under Section 9…

- **Court:** NCLT
- **Order date:** 1 Feb 2023
- **Citation:** TCN-2023-NCLT-04822
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/pr-castalloys-private-limited-cp-655-ib-mb-2020-941e56af

## Summary

### Background

Pheonix Industries Limited, the Operational Creditor, filed a Company Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against PR Castalloys Private Limited, the Corporate Debtor, for a resolution of operational debt amounting to Rs. 41,67,154. The debt arose from the supply of Aluminium Alloys by the Petitioner to the Respondent between July and August 2019. The Respondent issued four cheques amounting to Rs. 40,02,474 for repayment, which were dishonoured due to insufficient funds. The Petitioner issued a demand notice on 02.01.2020, which the Respondent received on 07.01.2020, but failed to reply or pay the outstanding amount.

## Facts

Pheonix Industries Limited (Operational Creditor) supplied Aluminium Alloys to PR Castalloys Private Limited (Corporate Debtor) between July and August 2019. The total value of the goods supplied was Rs. 40,02,474. The Corporate Debtor issued four cheques for the same amount, which were dishonoured due to insufficient funds. The Operational Creditor issued a demand notice on 02.01.2020, which was received by the Corporate Debtor on 07.01.2020. The Corporate Debtor made a partial payment of Rs. 50,000 on 23.10.2019. The Operational Creditor claimed an outstanding amount of Rs. 41,67,154, which includes interest at 15% per annum. The Corporate Debtor denied the debt and claimed to have made a payment of Rs. 9,00,000, which was not disclosed by the Operational Creditor.

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted on the payment of the operational debt to the Operational …

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

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**Reasoning:** The court found that the Corporate Debtor had issued cheques that were dishonoured due to

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**Interpretation:** The legal principle is that if a debt is due and payable and the debtor fails

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**Application:** The court applied the ratio to the facts by noting that the dishonoured cheques

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## Parties

- **Judges:** Kuldip Kumar…; ANURADHA SANJAY…
- **Appellants:** Pheonix Industries…
- **Respondents:** PR Castalloys…

## Timeline

- **2019-07-01 — Supply of Aluminium…**: The Petitioner supplied Aluminium Alloys to the…
- **2019-08-01 — Supply of Aluminium…**: The Petitioner supplied Aluminium Alloys to the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 138 — Discharge order](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-138)

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