# In the matter of Shri Samarth Engineering Private Limited

> NCLT judgment dated 2023-10-20. Citation: TCN-2023-NCLT-01042. Paras Bhavani Steel Private Limited filed a petition to initiate Corporate Insolvency…

- **Court:** NCLT
- **Order date:** 20 Oct 2023
- **Citation:** TCN-2023-NCLT-01042
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shri-samarth-engineering-private-limited-0b747d81

## Summary

### Background

Paras Bhavani Steel Private Limited filed a petition to initiate Corporate Insolvency Resolution Process (CIRP) against Shri Samarth Engineering Private Limited, alleging default in payment. The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, claiming that the Corporate Debtor failed to pay Rs. 89,52,900/- for goods supplied.

## Facts

Paras Bhavani Steel Private Limited (Operational Creditor) filed a petition against Shri Samarth Engineering Private Limited (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate CIRP due to a default in payment. The Operational Creditor claimed to have supplied Stainless-Steel Welded Tubes and Pipes to the Corporate Debtor, with invoices raised between 17.01.2019 and 27.02.2019, totaling Rs. 89,52,900/-. The Corporate Debtor failed to make the payment. A demand notice in Form-3 was issued on 19.08.2019 and duly delivered. The Corporate Debtor did not file any reply or raise any dispute. The invoices were issued between 17.01.2019 and 27.02.2019, and the petition was filed on 20.03.2020. The Corporate Debtor's counsel

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## Issues and analysis

### Issue 1: Whether the Operational Creditor established the existence of an operational debt and default by …

**Ratio:** The Insolvency and Bankruptcy Code, 2016, allows for the initiation of CIRP upon the

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**Reasoning:** The court found that the Operational Creditor had supplied goods to the Corporate Debtor,

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**Interpretation:** The existence of an operational debt is established when goods or services are

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**Application:** In this case, the Operational Creditor provided evidence of the supply of goods

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## Parties

- **Judges:** Kuldip Kumar…; ANURADHA SANJAY…
- **Appellants:** Paras Bhavani…
- **Respondents:** Samarth Engineerin…

## Timeline

- **2019-01-17 — Invoice Issuance Start…**: Invoices were issued…
- **2019-02-27 — Invoice Issuance End…**: Invoices were issued…

## 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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