# In the matter of Sanco Industries Limited Company Petition No. IB-11-ND-2021

> NCLT judgment dated 2022-07-29. Citation: TCN-2022-NCLT-01526. Skystep Trading Limited, the operational creditor, filed an application under Section 9 of the…

- **Court:** NCLT
- **Order date:** 29 Jul 2022
- **Citation:** TCN-2022-NCLT-01526
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sanco-industries-limited-company-petition-no-ib-11-nd-2021-95f29a37

## Summary

### Background

Skystep Trading Limited, the operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Sanco Industries Limited, the corporate debtor, for initiating the Corporate Insolvency Resolution Process (CIRP) due to unpaid operational debt. The operational creditor supplied Polyvinyl Chloride to the corporate debtor based on sales contracts and issued invoices. Despite accepting delivery, the corporate debtor failed to make payments. The operational creditor issued a demand notice, but received no reply. The corporate debtor claimed a pre-existing dispute regarding the quantity of goods supplied and cited poor market conditions as reasons for delayed payment. The operational creditor refuted these claims, stating that the

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## Facts

Skystep Trading Limited (Operational Creditor) supplied Polyvinyl Chloride to Sanco Industries Limited (Corporate Debtor) based on sales contracts. Invoices were raised for the goods delivered. The Corporate Debtor failed to make payments against these invoices, leading to an outstanding debt of USD 457,541.50. The Operational Creditor issued a demand notice dated 18.04.2020 under Section 8(1) of the Insolvency and Bankruptcy Code, 2016, seeking payment. The Corporate Debtor did not reply to the demand notice. The Corporate Debtor claimed a pre-existing dispute regarding the quantity of goods supplied, stating that the applicant supplied less quantity of goods than claimed/invoiced. The Corporate Debtor also cited poor market conditions and slow payment recovery as

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## Issues and analysis

### Issue 1: Whether there is an 'operational …

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

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**Reasoning:** The court determined that the outstanding debt of USD 457,541.50, equivalent to Rs.

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**Interpretation:** The term 'operational debt' is defined under the IBC and includes a claim in

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**Application:** The debt arose from the supply of Polyvinyl Chloride by the operational

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## Parties

- **Judges:** P.S.N. P…; RAHUL BHA…
- **Appellants:** Skystep Trading…
- **Respondents:** Sanco Industries…

## Timeline

- **2018-09-11 — Proforma Invoice/Sales…**: Proforma Invoice/Sales contract bearing…
- **2018-10-27 — Proforma Invoice/Sales…**: Proforma Invoice/Sales contract bearing…

## 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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