# In the matter of Unilec Engineers Limited IB-690-ND-2019

> NCLT judgment dated 2022-05-17. Citation: TCN-2022-NCLT-02729. The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 17 May 2022
- **Citation:** TCN-2022-NCLT-02729
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/unilec-engineers-limited-ib-690-nd-2019-0350d561

## Summary

### Background

The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) by M/s Shera Metal Private Limited, the Operational Creditor, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Unilec Engineers Limited, the Corporate Debtor. The Operational Creditor claimed that the Corporate Debtor defaulted in payment of a principal amount of Rs. 30,46,260/- along with 18% interest per annum. The Corporate Debtor contested the maintainability of the application, alleging lack of authorization, non-delivery of the demand notice, and absence of default as defined under Section 3(12) of the IBC, 2016.

## Facts

M/s Shera Metal Private Limited (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Unilec Engineers Limited (Corporate Debtor). The Operational Creditor is engaged in the business of manufacturing non-ferrous metal and its alloy products and continuously supplied goods to the Corporate Debtor. The Corporate Debtor made payments intermittently, maintaining a continuous account. Payments fell due as per invoices, but the Corporate Debtor preferred to make payments on an account basis. The Corporate Debtor issued five cheques to the Operational Creditor, which were presented on 19/03/2018 but dishonored on 20/03/2018. A demand notice dated

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor under Section 9 of the IBC, 2016 is …

**Ratio:** Section 9 of the IBC, 2016 allows an operational creditor to initiate CIRP against a

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**Reasoning:** The Adjudicating Authority considered the pleadings and arguments of both parties and

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**Interpretation:** Section 9 provides the mechanism for operational creditors to trigger the

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**Application:** The Adjudicating Authority found that the Operational Creditor had demonstrated

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## Parties

- **Judges:** BACHU VENKAT…; Narender Kumar…
- **Appellants:** M/s Shera Metal…
- **Respondents:** M/s Unilec…
- **Advocates:** Susshil…; Akshita K…

## Timeline

- **2018-03-19 — Cheques Pre…**: Five cheques issued by the Corporate Debtor were presented to the bank by the Operational…
- **2018-03-20 — Cheques Dis…**: The cheques issued by the…

## 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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