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

> NCLT judgment dated 2022-03-11. Citation: TCN-2022-NCLT-03788. Kamakshi Kraftex Pvt. Ltd. filed an application under Section 9 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 11 Mar 2022
- **Citation:** TCN-2022-NCLT-03788
- **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-ae6c637f

## Summary

### Background

Kamakshi Kraftex Pvt. Ltd. filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Saraf Gartex Ltd., claiming to be an operational creditor. The applicant stated that they had been conducting business with the respondent, supplying industrial raw materials-fabrics on an "on order" basis. The applicant raised invoices from 2016-05-26 to 2016-12-09. The respondent made part payments, but a balance of Rs. 6,45,886/- remained outstanding. The applicant served a demand notice dated 2019-04-28 to the respondent demanding the outstanding amount with interest.

## 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 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 dated 2019-04-28 under Section 8 of the IBC, demanding the outstanding amount with 18% interest. The Corporate Debtor claimed a dispute regarding the quality of goods, relying on the Sale of Goods Act, 1930, and submitted debit notes. The Operational Creditor argued that the debit notes were not acknowledged and that the Corporate Debtor had assessed

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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 of service of the demand notice and

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

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**Application:** The demand notice was duly served on the Respondent, fulfilling the requirement

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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…
- **2016-09-06 — Last Payment…**: Applicant received the last…

## 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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