# In the matter of Sri Lakshmi Saraswathi Impeex (India) Ltd.

> NCLT judgment dated 2023-09-25. Citation: TCN-2023-NCLT-01484. The case involves an application filed by Ramanuj Cotton Corporation (Coimbatore), the…

- **Court:** NCLT
- **Order date:** 25 Sept 2023
- **Citation:** TCN-2023-NCLT-01484
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sri-lakshmi-saraswathi-impeex-india-ltd-046f4672

## Summary

### Background

The case involves an application filed by Ramanuj Cotton Corporation (Coimbatore), the Operational Creditor, against Sri Lakshmi Saraswathi Impeex (India) Limited, the Corporate Debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed a sum of Rs. 20,69,035/- as due and payable as of 26.09.2019, based on three invoices for the supply of yarns. The Corporate Debtor disputed the claim, alleging that the supplied yarn was of inferior quality and had been returned. The Corporate Debtor also contended that the Operational Creditor had erroneously given credit for yarn returns and that there was a pre-existing dispute regarding the quality of the goods.

## Facts

Ramanuj Cotton Corporation (Coimbatore), the Operational Creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Sri Lakshmi Saraswathi Impeex (India) Limited, the Corporate Debtor, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed a sum of Rs. 20,69,035/- as due and payable as of 26.09.2019, based on three invoices for the supply of yarns. The invoices were dated 14.04.2019 (Rs. 4,24,042/-), 17.04.2018 (Rs. 11,40,300/-), and 30.04.2018 (Rs. 11,46,743/-), totaling Rs. 27,11,085/-. The Operational Creditor gave credit of Rs. 9,50,250/- on account of yarn returns. The Corporate Debtor disputed the claim, alleging that the supplied yarn was of inferior quality and had

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a 'default' in repayment of 'operational debt' to the …

**Ratio:** Section 9(5) of the IBC, 2016, requires the Adjudicating Authority to admit the

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**Reasoning:** The court found that the Operational Creditor had provided sufficient evidence in the

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**Interpretation:** The term 'default' under the IBC refers to non-payment of debt when it has

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**Application:** In this case, the court found that the Corporate Debtor had failed to make

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## Parties

- **Judges:** SANJIV…; Venkataraman…
- **Appellants:** Ramanuj Cotton…
- **Respondents:** Lakshmi Saraswathi…
- **Advocates:** Pawan Jh…; K. Jagann…

## Timeline

- **2018-04-17 — Invoice…**: Invoice No. RCT/YN/0060…
- **2018-04-30 — Invoice…**: Invoice No. RCT/YN/0108…

## 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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