NCLT Mumbai Rejects Section 9 Application For Initiation Of CIRP Against Elder Projects Limited
The National Company Law Tribunal (NCLT), Mumbai bench comprising Shri Shyam Babu Gautam (Technical Member) and Shri H.V. Subba Rao (Judicial Member), has rejected an application under section 9 of the Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) seeking initiation of Corporate Insolvency Resolution Process (“CIRP”) against Elder Projects Limited.The Application was filed by...
The National Company Law Tribunal (NCLT), Mumbai bench comprising Shri Shyam Babu Gautam (Technical Member) and Shri H.V. Subba Rao (Judicial Member), has rejected an application under section 9 of the Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) seeking initiation of Corporate Insolvency Resolution Process (“CIRP”) against Elder Projects Limited.
The Application was filed by Nanz Med Science Pharma Private Limited (“Operational Creditor”) which was involved in the business of external preparations, formulation of hand sanitizers, disinfectants, etc. It supplied its products to Elder Projects Limited (“Corporate Debtor”) on the basis of purchase orders issued from 2019 to 2020. Multiple invoices were also raised for the products supplied. However, Elder Projects Limited failed to make payments of the invoices raised from 16.03.2020 to 07.05.2020, the total value of which amounted to Rs.1,18,58,507/-. Due to subsequent failures to make payments even after several notices, a Demand Notice dated 24.09.2021 was issued by Nanz Med Science Pharma Pvt. Ltd. demanding payment of unpaid operational debt.
On the other hand, Elder Projects Limited contended, inter alia, that the petition was barred under section 10A of IBC, 2016 as for the purchase order dated 06.02.2020 and 06.03.2020, the payment was to be made within 45 days of delivery of goods. The goods were last delivered on 20.03.2020 and 07.05.2020. Hence the date of default was beyond 25th March 2020 and fell within the purview of section 10A of IBC, 2016.
The Tribunal found merit in the contentions raised by Elder Projects Limited and observed that as the payments were to be made within 45 days from the date of delivery, the date of default was beyond 25th March 2020. Also, Nanz Med Science Pharma Pvt. Ltd. failed to mention the date of default in Part 4 of the Petition. Thus the Tribunal rejected the petition on the grounds that it fell within the purview of Section 10A of IBC, 2016.
Elder Projects Limited is a non-government company involved in legal, accounting, book-keeping and auditing activities; tax consultancy; market research and public opinion polling; business and management consultancy.
Case Name
Nanz Med Science Pharma Private Limited vs Elder Projects Limited
Case No.
CP (IB) 245/MB/C-I/2022