# In the matter of SBEC Sugar Limited

> NCLT judgment dated 2024-02-02. Citation: TCN-2024-NCLT-02797. Mosco International Commodities Private Limited, the operational creditor, filed an application…

- **Court:** NCLT
- **Order date:** 2 Feb 2024
- **Citation:** TCN-2024-NCLT-02797
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sbec-sugar-limited-a6190275

## Summary

### Background

Mosco International Commodities Private Limited, the operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against SBEC Sugar Limited, the corporate debtor, due to default in payment of an outstanding operational debt of Rs. 1,08,02,731. The operational creditor claimed to have made an advance payment for the supply of molasses, but the corporate debtor failed to supply the entire quantity due to the suspension of supply by the Molasses Controller and Excise Commissioner and a subsequent fire incident at the corporate debtor's plant. The corporate debtor disputed the claim, stating that there was no legal liability and the debt was below the threshold limit of

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## Facts

Mosco International Commodities Private Limited (Operational Creditor) filed an application against SBEC Sugar Limited (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of CIRP for an outstanding operational debt of Rs. 1,08,02,731. The debt arose from a purchase order for 55,000 quintals of molasses for the seasons 2019-2020 and 2020-2021, for which the Operational Creditor made an advance payment of Rs. 2,02,63,750. Only 18,771.35 quintals of molasses were supplied. The Molasses Controller and Excise Commissioner suspended the supply due to complaints. The Corporate Debtor cancelled the sale order on 06.03.2021, unable to supply the remaining 36,228.65 quintals. The Operational Creditor demanded a refund of Rs.

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## Issues and analysis

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

**Ratio:** The threshold limit for initiating CIRP under Section 9 of the I&B Code is Rs. 1

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**Reasoning:** The NCLT relied on the decision of the NCLAT in Metal's & Metal Electric Pvt. Ltd.

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**Interpretation:** The I&B Code requires a minimum threshold of debt for initiating CIRP to

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**Application:** In this case, the outstanding operational debt on the date of filing of the

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## Parties

- **Judges:** Praveen…; Ashish…
- **Appellants:** Mosco Internationa…
- **Respondents:** SBEC Sugar…

## Timeline

- **2022-08-20 — Application…**: Mosco International Commodities Pvt.…
- **2022-05-31 — Demand Notice…**: The Operational Creditor sent the demand…

## Legal provisions

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

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