# In the matter of United Foods Private Limited

> NCLT judgment dated 2023-10-18. Citation: TCN-2023-NCLT-01139. M/s. R. J. Industries, the Applicant/Operational Creditor, filed an application on 2022-02-26…

- **Court:** NCLT
- **Order date:** 18 Oct 2023
- **Citation:** TCN-2023-NCLT-01139
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/united-foods-private-limited-9e60b9ae

## Summary

### Background

M/s. R. J. Industries, the Applicant/Operational Creditor, filed an application on 2022-02-26 under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. United Foods Private Limited, the Respondent/Corporate Debtor. The application was based on the Corporate Debtor's alleged failure to clear an outstanding amount of Rs. 3,33,29,429/- along with interest at 18% p.a. as on 2018-08-10. An earlier application filed by the Operational Creditor was dismissed due to a defective notice, and an appeal to NCLAT was withdrawn with liberty to file a fresh petition.

## Facts

M/s. R. J. Industries, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against M/s. United Foods Private Limited, the corporate debtor, due to an outstanding debt of Rs. 3,33,29,429/- with 18% interest p.a. as of 2018-08-10. The operational creditor is incorporated under the Indian Partnership Act, 1932, dealing in trading rice and food grains. The corporate debtor, incorporated on 2010-12-06, has an authorized share capital of Rs. 10,00,00,000 and a paid-up share capital of Rs. 6,96,88,000. An earlier application by the operational creditor was dismissed due to a defective notice under Section 8(1), and the subsequent appeal was withdrawn. The corporate debtor issued dishonored cheques to the

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor under Section 9 of the Insolvency and …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016, read with Rule 6 of the

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**Reasoning:** The Adjudicating Authority found that the Corporate Debtor was inactive due to default in

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**Interpretation:** The provision requires the Adjudicating Authority to consider the merits of the

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**Application:** In this case, the Adjudicating Authority dismissed the application because the

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## Parties

- **Judges:** BACHU VENKAT…; ATUL CHAT…
- **Appellants:** M/s. R. J.…
- **Respondents:** M/s. United Foods…

## Timeline

- **2022-02-26 — Application…**: M/s. R. J. Industries filed an application under Section 9 of the IBC to initiate CIRP…
- **2021-08-11 — Earlier Application…**: The Operational Creditor filed an earlier application under Section 9 of IBC before 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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