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

> NCLT judgment dated 2022-08-02. Citation: TCN-2022-NCLT-01494. The case involves a petition filed by Power2SME Private Limited, the Operational Creditor, to…

- **Court:** NCLT
- **Order date:** 2 Aug 2022
- **Citation:** TCN-2022-NCLT-01494
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vhm-industries-ltd-cp-no-15-ibc-mb-2022-15a9b885

## Summary

### Background

The case involves a petition filed by Power2SME Private Limited, the Operational Creditor, to initiate the 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. The Operational Creditor provided evidence of purchase orders, E-Way Bills, and a demand notice served to the Corporate Debtor. The Corporate Debtor had also sent an email confirming their debt.

## Facts

Power2SME Private Limited, an Operational Creditor, filed a petition to initiate CIRP against VHM Industries Ltd, a 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. Purchase orders were raised on credit basis. P.O. No. 353 dated 2019-08-14 for Qty. 31635 mtrs. amounted to Rs. 50,00,823/-, P.O. No. 354 dated 2019-08-16 for Qty. 30864 mtrs. amounted to Rs. 49,11,471/-, and P.O. No. 355 dated 2019-08-16 for Qty. 32024 mtrs. amounted to Rs 49,94,818/-. The Operational Creditor transported the materials to the Corporate Debtor, evidenced by E-Way Bills. The Corporate Debtor issued cheques towards

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## Issues and analysis

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

**Ratio:** The Insolvency and Bankruptcy Code, 2016 requires the Operational Creditor to prove the

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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 by the Operational Creditor as

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**Application:** Based on the evidence, the court concluded that the Operational Creditor had

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## Parties

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

## Timeline

- **2019-08-14 — Purchase Order…**: Purchase Order No. 353 was issued for Qty. 31635 mtrs. at a Basic rate of 150.55…
- **2019-08-16 — Purchase Order…**: Purchase Order No. 354 was issued for Qty. 30864 mtrs. at a Basic rate of 151.55…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3(11) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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