# In the matter of Purple Thought India Private Limited

> NCLT judgment dated 2023-11-30. Citation: TCN-2023-NCLT-00492. The case involves an application filed by Ms. Richa Dave, an operational creditor, under…

- **Court:** NCLT
- **Order date:** 30 Nov 2023
- **Citation:** TCN-2023-NCLT-00492
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/purple-thought-india-private-limited-d6b06567

## Summary

### Background

The case involves an application filed by Ms. Richa Dave, an operational creditor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Purple Thoughts India Private Limited, the corporate debtor, due to a default in payment of Rs. 4,15,730/-. The applicant and the corporate debtor had entered into contracts in 2017, and the applicant rendered services. The applicant terminated the contract in April 2019 and claimed the outstanding amount along with interest. A demand notice was sent in December 2021.

## Facts

Ms. Richa Dave, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Purple Thoughts India Private Limited, the corporate debtor. The basis for the application was the corporate debtor's alleged default in payment of Rs. 4,15,730/-. The applicant and the corporate debtor had entered into contracts dated April 25, 2017, and June 5, 2017, for services rendered by the applicant. The applicant terminated the contract via email on April 25, 2019, and claimed the outstanding amount with 18% interest per annum. The amount fell due on April 25, 2019. A statutory demand notice under Section 8(1) of the Code was sent on December 28, 2021. The application

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## Issues and analysis

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

**Ratio:** The pecuniary threshold limit for initiating CIRP under Section 4 of the IBC is Rs. 1

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**Reasoning:** The court relied on the MCA notification dated March 24, 2020, and judgments from NCLAT

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**Interpretation:** Section 4 of the IBC, as amended, sets the minimum default amount for

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**Application:** In this case, the application was filed on January 20, 2022, and the demand

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## Parties

- **Judges:** MANNI SANKARIAH…; Sanjeev R…
- **Appellants:** Richa…
- **Respondents:** Purple Thoughts…

## Timeline

- **2017-04-25 — Contract…**: Applicant and Corporate…
- **2017-06-05 — Contract…**: Applicant and Corporate…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8(1) — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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