# In the matter of VHM Industries Ltd. C.P. No. 15-IBC-MB-2022

> NCLT judgment dated 2022-08-02. Citation: TCN-2022-NCLT-01499. The case involves a petition filed by Power2SME Private Limited, the Operational Creditor,…

- **Court:** NCLT
- **Order date:** 2 Aug 2022
- **Citation:** TCN-2022-NCLT-01499
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vhm-industries-ltd-cp-no-15-ibc-mb-2022-11e8a5ef

## Summary

### Background

The case involves a petition filed by Power2SME Private Limited, the Operational Creditor, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against VHM Industries Ltd, the Corporate Debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Operational Creditor claimed an operational debt of Rs. 2,38,24,697/-. The Corporate Debtor failed to appear before the Bench despite service of notice, leading to an ex-parte hearing.

## Facts

Power2SME Private Limited, the Operational Creditor, filed a petition to initiate CIRP against VHM Industries Ltd, the Corporate Debtor, for an operational debt of Rs. 2,38,24,697/-. The Operational Creditor is in the business of supplying raw materials to SMEs. The Corporate Debtor placed orders for Cotton Fabrics and Fancy Suitings 5208, evidenced by purchase orders dated August 14 and 16, 2019. The Operational Creditor transported the materials to the Corporate Debtor, supported by E-Way Bills. The Corporate Debtor issued cheques towards discharging their liability, but two cheques were dishonored. The Corporate Debtor failed to comply with payment terms, leading the Operational Creditor to issue a demand notice on January 17, 2020, demanding Rs. 1,57,93,681/- plus

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## Issues and analysis

### Issue 1: Whether the Operational Creditor successfully demonstrated the existence of debt and default by the …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016 allows an operational creditor to

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**Reasoning:** The Bench considered the purchase orders, E-Way Bills, dishonored cheques, demand notice,

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**Interpretation:** The court interpreted the evidence presented as sufficient proof of the

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**Application:** The Bench applied the provisions of Section 9 of the IBC to the facts,

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## Parties

- **Judges:** H.V. Subb…; ANURADHA SANJAY…
- **Appellants:** Power2SME PRIVATE…
- **Respondents:** VHM INDUSTR…

## Timeline

- **2019-08-14 — Purchase…**: P.O. No. 353 dated…
- **2019-08-16 — Purchase…**: P.O. No. 354 dated…

## 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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