# In the matter of SDF INDUSTRIES LIMITED

> NCLT judgment dated 2025-04-04. Citation: TCN-2025-NCLT-00246. The case involves an application filed by M/s. Mudali Associates, the Operational Creditor,…

- **Court:** NCLT
- **Order date:** 4 Apr 2025
- **Citation:** TCN-2025-NCLT-00246
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sdf-industries-limited-62aa9cfb

## Summary

### Background

The case involves an application filed by M/s. Mudali Associates, the Operational Creditor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. SDF Industries Ltd., the Corporate Debtor. The Operational Creditor claims that the Corporate Debtor defaulted on payments for labor services provided, specifically for washing, filling, sealing, labeling, and packing of bottles. The Corporate Debtor disputes the claim, citing a labor contract agreement and raising concerns about the number of workers engaged and the applicability of Section 10A of the IBC due to the COVID-19 pandemic.

## Facts

M/s. Mudali Associates, the Operational Creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. SDF Industries Ltd., the Corporate Debtor. The Operational Creditor is a sole proprietorship owned by Mrs. Bindu and supplies laborers for washing, filling, sealing, labeling, and packing bottles for the Corporate Debtor. A labor contract agreement was signed in 2017 and extended periodically. The Operational Creditor claims the Corporate Debtor defaulted on payments since May 2020, totaling Rs. 4,55,91,108.46 plus interest, amounting to Rs. 7,49,97,373.41. The Corporate Debtor defaulted on wages, employer contributions, and statutory dues, leading to legal

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted on …

**Ratio:** The principle is that if there is a debt and a default in payment of that debt, the

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**Reasoning:** The Adjudicating Authority found that the Corporate Debtor had failed to make payments

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**Interpretation:** The term 'default' under Section 3(12) of the IBC means non-payment of debt

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**Application:** The Corporate Debtor's failure to pay the outstanding invoices for the labor

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## Parties

- **Judges:** Madhu S…; Shri. Vina…
- **Appellants:** M/s. Mudali…
- **Respondents:** M/s. SDF Industrie…

## Timeline

- **2001-01-01 — Establishment of…**: M/s. Mudali Associates…
- **2014-07-02 — Registration Ce…**: Registration Certificate issued by the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(21) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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