# In the matter of Veda Chem Private Limited IB-450(ND)-2020

> NCLT judgment dated 2022-12-23. Citation: TCN-2022-NCLT-00049. The case pertains to an application filed under Section 9 of the Insolvency and Bankruptcy Code…

- **Court:** NCLT
- **Order date:** 23 Dec 2022
- **Citation:** TCN-2022-NCLT-00049
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/veda-chem-private-limited-ib-450nd-2020-5c1c0fc8

## Summary

### Background

The case pertains to an application filed under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, by M/s. MM Aqua Technologies Ltd. (Operational Creditor) to initiate Corporate Insolvency Resolution Process (CIRP) against Veda Chem Private Limited (Corporate Debtor). The Operational Creditor claimed that the Corporate Debtor defaulted on payments for materials supplied as per a purchase order. The Corporate Debtor made a partial payment, but a significant amount remained unpaid. The Operational Creditor issued a demand notice, but the Corporate Debtor failed to respond. The Adjudicating Authority initially passed an ex-parte order, which was later set aside and then revived due to non-compliance by the Corporate Debtor.

## Facts

M/s. MM Aqua Technologies Ltd. (Operational Creditor) filed an application under Section 9 of the IBC, 2016, to initiate CIRP against Veda Chem Private Limited (Corporate Debtor). The Operational Creditor supplied materials to the Corporate Debtor based on a purchase order dated 12.09.2017. An invoice for Rs. 16,62,266/- was raised on 15.09.2017. The Corporate Debtor made a partial payment of Rs. 5,81,740/-, leaving Rs. 10,80,526/- unpaid. The Corporate Debtor admitted the debt via email on 25.04.2018. A demand notice was issued on 29.07.2019. The Corporate Debtor issued a cheque for Rs. 1,50,000/- on 22.05.2019, which was dishonored. The Operational Creditor filed the Section 9 application after the Corporate Debtor failed to make the payments. An ex-parte order was

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## Issues and analysis

### Issue 1: Whether the Applicant/Operational Creditor has established a case under Section 9 of the Insolvency …

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

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**Reasoning:** The Adjudicating Authority found that the Operational Creditor had provided sufficient

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**Interpretation:** Section 9 of the IBC is interpreted to mean that if an operational creditor can

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**Application:** In this case, the Operational Creditor demonstrated that the Corporate Debtor

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## Parties

- **Judges:** ATUL CHAT…; Bachu Venkat…; +1 more
- **Appellants:** M/s. MM Aqua…
- **Respondents:** Veda Chem Private…

## Timeline

- **2017-09-12 — Purchase…**: A Purchase Order was placed upon the…
- **2017-09-15 — Invoice I…**: An Invoice of Rs. 16,62,266/- was…

## 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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