# In the matter of Sanmati Distributors Private Limited CP(IB) No. 54-KB-2020

> NCLT judgment dated 2022-04-27. Citation: TCN-2022-NCLT-03040. The case originates from a Company Petition filed under Section 9 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 27 Apr 2022
- **Citation:** TCN-2022-NCLT-03040
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sanmati-distributors-private-limited-cpib-no-54-kb-2020-1830f492

## Summary

### Background

The case originates from a Company Petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by Arvinder Singh, an Operational Creditor, against M/s Sanmati Distributors Private Limited, the Corporate Debtor. The Operational Creditor provided auditing services to the Corporate Debtor from 2015-2016. The Corporate Debtor failed to make regular payments, leading to outstanding audit fees. After repeated requests, only a partial payment was made. The Operational Creditor issued a demand notice under Section 8 of the IBC, 2016, due to the Corporate Debtor's failure to pay the outstanding dues.

## Facts

Arvinder Singh, operating as M/s A.B. Singh & Associates, provided auditing services to M/s Sanmati Distributors Private Limited from 2015-2016. Invoices were raised for the audit fees for the financial years 2015-16, 2016-17, 2017-18, and 2018-19. The Corporate Debtor made a partial payment of Rs. 41,500 in March 2019. The outstanding audit fee amounted to Rs. 3,58,500. The Operational Creditor issued a demand notice dated 21st August, 2019, under Section 8 of the Insolvency and Bankruptcy Code, 2016. The Corporate Debtor acknowledged the debt in a letter dated 5th September, 2019, citing financial difficulties. The Corporate Debtor failed to clear the outstanding dues, leading the Operational Creditor to file a Company Petition under Section 9 of the IBC, 2016.

## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor under Section 9 of the Insolvency and …

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

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**Reasoning:** The court considered the submissions and evidence presented by the Operational Creditor,

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**Interpretation:** Section 9 of the IBC, 2016 provides a mechanism for operational creditors to

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**Application:** The court applied the provisions of Section 9 of the IBC, 2016 to the facts of

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## Parties

- **Judges:** RohitKa…; Harish Chander…
- **Appellants:** Arvinder…
- **Respondents:** M/s. Sanmati…

## Timeline

- **2015-01-01 — Engagement of…**: Operational Creditor engaged by Corporate Debtor to provide auditing services from…
- **2019-03-01 — Partial P…**: Corporate Debtor made a…

## 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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