# In the matter of Tough Casting Private Limited

> NCLT judgment dated 2024-09-03. Citation: TCN-2024-NCLT-00694. Kay Bee Foundry Services Private Limited, the Operational Creditor (OC), filed a Company…

- **Court:** NCLT
- **Order date:** 3 Sept 2024
- **Citation:** TCN-2024-NCLT-00694
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/tough-casting-private-limited-2453d610

## Summary

### Background

Kay Bee Foundry Services Private Limited, the Operational Creditor (OC), filed a Company Petition (CP (IB) No. 3598/MB/2019) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Tough Casting Private Limited, the Corporate Debtor (CD), for initiating Corporate Insolvency Resolution Process (CIRP) due to a default in payment of Rs.29,94,404/-. The default was based on 14 unpaid invoices for goods supplied by the OC to the CD between 30.08.2018 and 14.04.2019. The CD issued post-dated cheques (PDCs) which were dishonored. The OC issued a demand notice under Section 8 of the IBC, to which the CD replied admitting the debt and promising payment, but failed to fulfill this commitment.

## Facts

Kay Bee Foundry Services Private Limited (Operational Creditor) supplied alloy raw materials to Tough Casting Private Limited (Corporate Debtor) based on purchase orders issued between 30.08.2018 and 14.04.2019. The OC raised invoices from 15.09.2018 to 20.04.2019, with interest at 18% per annum for late payments. The CD issued post-dated cheques (PDCs) from 24.04.2019 to 05.09.2019, but all were dishonored with the remark "exceeds arrangement". The CD acknowledged the outstanding amount via email on 17.04.2019 and promised payment, but failed to do so. The OC issued a demand notice on 19.06.2019 under Section 8 of the IBC. The CD replied on 22.06.2019, admitting the debt and promising payment by 31.08.2019, but again failed to pay. The total default amount

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## Issues and analysis

### Issue 1: Whether the application under Section 9 of the IBC is maintainable despite the Operational Creditor …

**Ratio:** The Hon'ble Supreme Court in Macquarie Bank Vs. Shilpi Cable Technologies Ltd. held that

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**Reasoning:** The purpose of the affidavit under Section 9(3)(b) is to demonstrate that no notice of

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**Interpretation:** Section 9(3)(b) of the IBC requires the operational creditor to submit an

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**Application:** In this case, the Corporate Debtor admitted the debt in its reply to the

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## Parties

- **Judges:** K. R. SAJI…; SANJIV…
- **Appellants:** Kay Bee Foundry…
- **Respondents:** Tough Casting…

## Timeline

- **2018-08-30 — Purchase Order…**: Corporate Debtor issued purchase orders to Operational Creditor for supply of alloy raw…
- **2018-09-15 — Invoices…**: Operational Creditor raised invoices to…

## 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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