# In the matter of Sunrise Ginning Private Limited

> NCLT judgment dated 2023-07-20. Citation: TCN-2023-NCLT-02424. The case involves an application filed by Shrinathji Spintex Pvt Ltd (Applicant/Operational…

- **Court:** NCLT
- **Order date:** 20 Jul 2023
- **Citation:** TCN-2023-NCLT-02424
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sunrise-ginning-private-limited-a2ff807f

## Summary

### Background

The case involves an application filed by Shrinathji Spintex Pvt Ltd (Applicant/Operational Creditor) under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Sunrise Ginning Private Limited (Corporate Debtor). The Applicant claimed that the Corporate Debtor defaulted in paying an operational debt of Rs. 5,77,85,361/-, including a principal amount of Rs. 3,44,98,716/- and an interest amount of Rs. 2,32,86,645/-. The debt arose from the supply of cotton bales by the Applicant to the Corporate Debtor between April 2015 and July 2015. Despite repeated reminders, the Corporate Debtor failed to make payment, leading the Applicant to file a Special Civil Suit, which was later settled through a

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## Facts

Shrinathji Spintex Pvt Ltd (Applicant) supplied cotton bales to Sunrise Ginning Private Limited (Corporate Debtor) between April 2015 and July 2015. The total debt, including principal and interest, amounted to Rs. 5,77,85,361/-. The Corporate Debtor failed to make payments despite repeated reminders. The Applicant filed a Special Civil Suit No. 02 of 2020 before the Ld. Principal Civil Judge, Rajkot, which was settled through a consent decree on 05.03.2020. As per the consent decree, the Corporate Debtor was liable to pay Rs. 3,44,98,716/- towards the principal sum and Rs. 2,32,86,645/- towards interest. The Corporate Debtor still failed to pay, leading the Applicant to issue a demand notice on 07.11.2022 under Section 8 of the IBC, which was served on 10.11.2022. The

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## Issues and analysis

### Issue 1: Whether the application filed under Section 9 of the IBC based on a consent decree is maintainable …

**Ratio:** A debt established through a consent decree can be considered an operational debt under

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**Reasoning:** The NCLT relied on the NCLAT's judgment in Ashok Agarwal vs Amitex Polymers Pvt Ltd,

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**Interpretation:** Section 5(21) of the IBC defines 'operational debt' as a claim in respect of

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**Application:** In this case, the debt arose from the supply of cotton bales by the Applicant

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## Parties

- **Judges:** SHAMMI…; Ajai Das Me…
- **Appellants:** Shrinathji…
- **Respondents:** Sunrise Ginning…; Sunrise Ginning…

## Timeline

- **2015-04-01 — Supply of…**: Applicant supplied goods to the…
- **2015-07-01 — Supply of…**: Applicant supplied goods to the…

## 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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