# In the matter of Shree Rama Newsprint Limited C.P. (IB)-141(AHM)2021

> NCLT judgment dated 2022-03-16. Citation: TCN-2022-NCLT-03701. The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by…

- **Court:** NCLT
- **Order date:** 16 Mar 2022
- **Citation:** TCN-2022-NCLT-03701
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shree-rama-newsprint-limited-cp-ib-141ahm2021-5944b56c

## Summary

### Background

The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by Agrawal Fuel Corporation Pvt. Ltd. (Operational Creditor) to initiate the Corporate Insolvency Resolution Process (CIRP) against Shree Rama Newsprint Ltd (Corporate Debtor). The Operational Creditor claimed that the Corporate Debtor defaulted in paying an operational debt of Rs. 2,55,26,222/-. The date of default was stated as 31.10.2020. The Corporate Debtor argued that the application was not maintainable because it was solely based on a settlement agreement/MoU and that the invoices were beyond the period of limitation.

## Facts

Agarwal Transport Corporation Pvt. Ltd. provided transport services to Shree Rama Newsprint Ltd. (Corporate Debtor) between 31.05.2015 and 28.02.2018 and raised invoices. On 19.03.2020, the National Company Law Tribunal Bench at Ahmedabad sanctioned a scheme of demerger, resulting in the creation of three separate corporate entities, including Agarwal Fuel Corporation Private Limited (Operational Creditor). Shree Rama Newsprint Ltd. entered into a Memorandum of Understanding (MoU) dated 24.07.2017 with all three companies, undertaking to pay Rs. 7,23,01,248/- in equitable monthly installments. The Corporate Debtor paid an installment of Rs. 12,00,000/- on 31.10.2020. On 13.03.2021, the Corporate Debtor sent an e-mail to the Operational Creditor admitting the debt of

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## Issues and analysis

### Issue 1: Whether the debt is …

**Ratio:** The limitation period for filing an application under Section 9 of the IBC is three years

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**Reasoning:** The NCLT noted that the Corporate Debtor entered into an MoU dated 24.07.2020, admitting

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**Interpretation:** The acknowledgment of debt and part payment by the Corporate Debtor within the

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**Application:** The NCLT held that the debt became due and payable in July 2020, not in

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## Parties

- **Judges:** Madan B.…; KAUSHALENDRA…
- **Appellants:** Agarwal Fuel…
- **Respondents:** Shree Rama…; Shree Rama…

## Timeline

- **2015-05-31 — Transport Services…**: Agarwal Transport Corporation Pvt. Ltd. provided transport services to the Corporate…
- **2018-02-28 — Transport Serv…**: Agarwal Transport Corporation Pvt. Ltd. stopped providing transport services to the…

## 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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