# In the matter of Saraf Gartex Ltd. CP No. (IB)-121-9-JPR-2019

> NCLT judgment dated 2022-03-11. Citation: TCN-2022-NCLT-03786. Kamakshi Kraftex Pvt. Ltd., an operational creditor, filed an application under Section 9 of…

- **Court:** NCLT
- **Order date:** 11 Mar 2022
- **Citation:** TCN-2022-NCLT-03786
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/saraf-gartex-ltd-cp-no-ib-121-9-jpr-2019-67cc1a8d

## Summary

### Background

Kamakshi Kraftex Pvt. Ltd., an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against M/S Saraf Gartex Ltd., the corporate debtor. The applicant claimed that the respondent had defaulted on payments for the supply of industrial raw materials-fabrics. The applicant had been conducting business with the respondent, supplying materials on an 'on order' basis. The applicant raised invoices between 2016-05-26 and 2016-12-09. The respondent made part payments, but a balance of Rs. 6,45,886/- remained outstanding. The applicant served a demand notice on 2019-04-28, demanding the outstanding amount with interest. The respondent neither paid the debt

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## Facts

Kamakshi Kraftex Pvt. Ltd. (Operational Creditor) supplied industrial raw materials-fabrics to M/S Saraf Gartex Ltd. (Corporate Debtor) on an 'on order' basis. The Operational Creditor raised eight invoices between 2016-05-26 and 2016-12-09. The Corporate Debtor made part payments, leaving an outstanding debt of Rs. 6,45,886/-. The last payment was received on 2016-09-06. The Operational Creditor issued a demand notice on 2019-04-28 under Section 8 of the IBC, demanding the outstanding amount with 18% interest. The Corporate Debtor neither paid the outstanding debt nor raised a dispute until the application was filed. The Corporate Debtor claimed dissatisfaction with the quality of goods and issued debit notes, but did not provide authentic communication to

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## Issues and analysis

### Issue 1: Whether the demand notice in Form No.3 dated …

**Ratio:** The demand notice was sent via registered post on 2019-04-29 to the corporate debtor and

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**Reasoning:** The Adjudicating Authority considered the evidence presented and determined that the

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**Interpretation:** The service of a demand notice is a mandatory requirement under Section 8 of

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**Application:** The demand notice was properly served, fulfilling the requirement for

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## Parties

- **Judges:** Deep Chandr…; RaghuNa…
- **Appellants:** Kamakshi Kraftex…
- **Respondents:** M/s Saraf Gartex…

## Timeline

- **2016-05-26 — Invoice…**: Applicant raised and issued…
- **2016-12-09 — Invoice…**: Applicant raised and issued…

## 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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