# In the matter of SDF INDUSTRIES LIMITED

> NCLT judgment dated 2025-04-04. Citation: TCN-2025-NCLT-00266. 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-00266
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sdf-industries-limited-fae012d4

## 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 (IBC), 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 supplied for washing, filling, sealing, labeling, and packing bottles. The Corporate Debtor disputes the claim, stating that the workers were employees of the Operational Creditor and that the Corporate Debtor is not liable for their wages and statutory dues. The Operational Creditor contends that the Corporate Debtor is responsible for all statutory obligations as per the labor contract agreement.

## Facts

M/s. Mudali Associates, the Operational Creditor, filed an application under Section 9 of the IBC to initiate CIRP against M/s. SDF Industries Ltd., the Corporate Debtor. The Operational Creditor is a sole proprietorship engaged in supplying laborers for washing, filling, sealing, labeling, and packing bottles for the Corporate Debtor. A labor contract agreement was signed between the parties in 2017, which was extended from time to time. The Operational Creditor claimed that the Corporate Debtor defaulted on payments since May 2020, amounting to Rs. 4,55,91,108.46 along with interest. The Corporate Debtor denied the claim, stating that the workers were employees of the Operational Creditor and that the Corporate Debtor is not liable for their wages and statutory dues.

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## Issues and analysis

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

**Ratio:** The Corporate Debtor is obligated to pay for the services rendered by the Operational

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

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**Interpretation:** The labor contract agreement establishes the obligation of the Corporate Debtor

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**Application:** The Corporate Debtor's failure to pay for the labor supplied by the Operational

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## Parties

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

## Timeline

- **2017-01-01 — Labour Contract…**: A labour contract agreement was signed between M/s. Mudali Associates and M/s. SDF…
- **2020-05-01 — Default on P…**: M/s. SDF Industries Ltd. allegedly defaulted on payments to M/s. Mudali Associates since…

## 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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