# In the matter of Stelmec Limited

> NCLT judgment dated 2024-03-05. Citation: TCN-2024-NCLT-02199. The case involves a Company Petition filed under Section 9 of the Insolvency & Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 5 Mar 2024
- **Citation:** TCN-2024-NCLT-02199
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/stelmec-limited-a475bcb7

## Summary

### Background

The case involves a Company Petition filed under Section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) by M/s Matrix Grating Private Limited (Operational Creditor) against Stelmec Limited (Corporate Debtor), seeking initiation of Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed an amount of Rs. 1,04,87,945/- was due and payable by the Corporate Debtor, with the date of default specified as 28.06.2021 as per the last invoice. The Corporate Debtor is involved in manufacturing of Low, Medium Voltage Switchgear and other value-added Power Products for T&D Networks. The Operational Creditor is in the business of manufacturing, supplying, and trading engineering products. The Corporate Debtor was in need of Steel Structure Material

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## Facts

M/s Matrix Grating Private Limited (Operational Creditor) filed a Company Petition under Section 9 of the IBC against Stelmec Limited (Corporate Debtor) for a default amount of Rs. 1,04,87,945/-, with the default date being 28.06.2021. The Operational Creditor is involved in manufacturing, supplying, and trading engineering products, while the Corporate Debtor is in the business of manufacturing Low, Medium Voltage Switchgear. The Corporate Debtor needed Steel Structure Material and started placing orders with the Operational Creditor in 2018. The Corporate Debtor issued post-dated cheques to the Operational Creditor, but some were dishonored. The Operational Creditor served a demand letter on 29.03.2022. The Corporate Debtor contended that the Operational Creditor

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## Issues and analysis

### Issue 1: Whether the Company Petition filed by the Operational Creditor is maintainable under the Insolvency …

**Ratio:** The IBC aims to resolve insolvency and not to be used as a recovery mechanism. The

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**Reasoning:** The Tribunal considered the arguments of both parties and examined the invoices raised by

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**Interpretation:** The IBC is interpreted to ensure that it is used for genuine insolvency

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**Application:** The Tribunal found that the invoices raised by the Operational Creditor on

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## Parties

- **Judges:** Madhu S…; KISHORE VEMULAPALL…
- **Appellants:** M/s Matrix…
- **Respondents:** Stelmec L…

## Timeline

- **2000-02-29 — Incorporation of…**: Stelmec Limited incorporated…
- **2018-01-01 — Business Relationship…**: Corporate Debtor started placing…

## 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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