# In the matter of AVON Capital Vs. Tattva & Mittal Lifespaces Pvt. Ltd. CA (AT) No. 256-2017

> NCLAT judgment dated 2018-08-09. Citation: TCN-2018-NCLAT-00153. The appeal arises from an order dated 11th July, 2017, by the NCLT, Mumbai Bench, which…

- **Court:** NCLAT
- **Order date:** 9 Aug 2018
- **Citation:** TCN-2018-NCLAT-00153
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/avon-capital-vs-tattva-mittal-lifespaces-pvt-ltd-ca-67134244

## Summary

### Background

The appeal arises from an order dated 11th July, 2017, by the NCLT, Mumbai Bench, which rejected an application for initiating a corporate insolvency resolution process against M/s. Tattva & Mittal Lifespaces Pvt. Ltd. (Corporate Debtor). The application was filed by Avon Capital under Section 9 of the Insolvency and Bankruptcy Code, 2016. The NCLT rejected the application on two grounds: that the appellant did not fall within the meaning of 'Operational Creditor' and that there was an 'existence of dispute'.

## Facts

Avon Capital, through its proprietor Ravindra Gopal, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate a corporate insolvency resolution process against M/s. Tattva & Mittal Lifespaces Pvt. Ltd. The application was based on an engagement letter dated 7th January, 2016, where the Corporate Debtor engaged Avon Capital to provide advisory and capital-raising services. Avon Capital was to receive a retainer fee, separate fees for advisory and ancillary services, and a success fee. The NCLT rejected the application, stating that Avon Capital was not an 'Operational Creditor' and that a dispute existed. The appellant brought on record the application under Section 9 of the I&B Code which is in Form 5 of Insolvency &

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## Issues and analysis

### Issue 1: Whether the appellant, Avon Capital, qualifies as an 'Operational Creditor' under Section 5(20) r/w …

**Ratio:** Section 5(20) of the I&B Code defines an 'operational creditor' as a person to whom

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**Reasoning:** The tribunal considered the engagement letter dated 7th January, 2016, which outlined the

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**Interpretation:** The definition of 'operational creditor' and 'operational debt' under the

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**Application:** Based on the engagement letter and the services rendered, the tribunal held

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** AVON Ca…
- **Respondents:** Tattva & Mittal…; M/s Tattva &…

## Timeline

- **2016-01-07 — Engagement…**: Corporate Debtor engaged Avon Capital to…
- **2017-07-11 — NCLT Ord…**: NCLT, Mumbai Bench, rejected 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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