# in the matter of Shree Rama News Print & Papers Ltd.

> NCLT judgment dated 2023-10-18. Citation: TCN-2023-NCLT-01134. The case involves an application filed by Shah Paper Mills Ltd. (Operational Creditor) against…

- **Court:** NCLT
- **Order date:** 18 Oct 2023
- **Citation:** TCN-2023-NCLT-01134
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shree-rama-news-print-papers-ltd-d45a69ef

## Summary

### Background

The case involves an application filed by Shah Paper Mills Ltd. (Operational Creditor) against Shree Rama Newsprint & Papers Ltd. (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, for initiation of Corporate Insolvency Resolution Process (CIRP) due to an outstanding amount of Rs. 55,23,253/- along with 18% interest. The Adjudicating Authority initially rejected the application due to a dispute regarding the payable amount. An appeal was filed by the Operational Creditor, which was allowed by NCLAT, setting aside the initial order and directing the Adjudicating Authority to reconsider the application. The Corporate Debtor attempted to pay the principal amount, but the Operational Creditor returned the payment, seeking interest as well.

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## Facts

Shah Paper Mills Ltd. (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Shree Rama Newsprint & Papers Ltd. (Corporate Debtor) for an outstanding amount of Rs. 55,23,253/- with 18% interest. The Adjudicating Authority initially rejected the application on 2022-07-20 due to a dispute about the actual amount payable. The Operational Creditor appealed, and NCLAT allowed the appeal on 2022-12-21, setting aside the Adjudicating Authority's order and directing reconsideration. The Corporate Debtor attempted to pay the principal amount by sending demand drafts and later transferring the amount via RTGS on 2023-01-16, but the Operational Creditor returned the payments. The Corporate Debtor then filed I.A. No.

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## Issues and analysis

### Issue 1: Whether the Operational Creditor can pursue a Section 9 application under the IBC solely for the …

**Ratio:** The IBC is primarily intended for the resolution of insolvency and not for mere recovery

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**Reasoning:** The court reasoned that the Operational Creditor's action of returning the principal

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**Interpretation:** The interpretation of Section 9 of the IBC, read with its overall objective,

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**Application:** In this case, the Corporate Debtor offered to pay the principal amount, but the

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## Parties

- **Judges:** SHAMMI…; KAUSHALENDRA…
- **Appellants:** Shah Paper Mills…
- **Respondents:** Shree Rama…; Shree Rama…
- **Advocates:** Ravi P…; Pragati B…; +3 more

## Timeline

- **2019-03-28 — Application…**: Shah Paper Mills Ltd. filed an application under Section 9 of the IBC against Shree Rama…
- **2022-07-20 — Application R…**: The Adjudicating Authority rejected the application due to a dispute regarding the…

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