# In the matter of Suman Phosphates and Chemicals Limited

> NCLT judgment dated 2024-04-05. Citation: TCN-2024-NCLT-01804. The case involves an application under Section 9 of the Insolvency and Bankruptcy Code, 2016…

- **Court:** NCLT
- **Order date:** 5 Apr 2024
- **Citation:** TCN-2024-NCLT-01804
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/suman-phosphates-and-chemicals-limited-69e212b7

## Summary

### Background

The case involves an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) by Indian Potash Limited (Operational Creditor) against Suman Phosphates and Chemicals Limited (Corporate Debtor) for initiating the Corporate Insolvency Resolution Process (CIRP). The operational creditor claimed a default amount of Rs 10,86,82,581/-, stemming from two agreements dated 17.08.2016 and 07.10.2016. The corporate debtor allegedly defaulted on payments related to the supply of Rock Phosphate. The operational creditor provided a loan to the corporate debtor for purchasing Indigenous Rock Phosphate and also supplied 12000 Metric Tons of Rock Phosphate. The corporate debtor issued cheques which were dishonored. Legal notices were served, and the corporate debtor

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## Facts

Indian Potash Limited (Operational Creditor) filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Suman Phosphates and Chemicals Limited (Corporate Debtor) for initiating Corporate Insolvency Resolution Process (CIRP). The default amount claimed was Rs 10,86,82,581/-. Two agreements were executed between the parties on 17.08.2016 and 07.10.2016. Under the first agreement, the corporate debtor became liable to pay Rs 1,33,34,200/- to the operational creditor. Under the second agreement, the corporate debtor became liable to pay Rs 6,52,78,088/-. The first agreement involved the operational creditor agreeing to import Egyptian/Jordanian Rock Phosphates and sell it to the corporate debtor. The operational creditor released Rs 1,33,34,200/-

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## Issues and analysis

### Issue 1: Whether the corporate debtor …

**Ratio:** The Insolvency and Bankruptcy Code, 2016 defines 'default' as non-payment of debt when

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**Reasoning:** The court considered the facts of the case, including the agreements between the parties,

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**Interpretation:** The court interpreted the term 'default' in accordance with the definition

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**Application:** The court applied the definition of 'default' to the facts of the case and

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## Parties

- **Judges:** P. Moha…; KAUSHALENDRA…
- **Appellants:** Indian Pota…
- **Respondents:** Suman Phosphates…; Summan Phosphates…

## Timeline

- **2020-09-02 — Petition…**: The petition was filed by Mr. Manish Kaushik, authorised representative of M/s Indian…
- **2016-08-17 — First Agr…**: The first agreement was executed between the operational creditor and the corporate…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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