# In the matter of Chandrashekhar Exports Pvt. Ltd. vs. Babanraoji Shinde Sugar & Allied Industries Ltd.

> NCLAT judgment dated 2023-08-07. Citation: TCN-2023-NCLAT-00305. The appeal was filed against an order dated April 28, 2023, passed by the Adjudicating…

- **Court:** NCLAT
- **Order date:** 7 Aug 2023
- **Citation:** TCN-2023-NCLAT-00305
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/chandrashekhar-exports-pvt-ltd-vs-babanraoji-shinde-sugar-allied-industries-ltd-11eedc87

## Summary

### Background

The appeal was filed against an order dated April 28, 2023, passed by the Adjudicating Authority, which rejected a Section 9 application filed by the Appellant, who is the Operational Creditor. The Adjudicating Authority refused to initiate the insolvency proceeding.

## Facts

Chandrashekhar Exports Pvt. Ltd. filed a Section 9 application as an Operational Creditor against Babanraoji Shinde Sugar & Allied Industries Ltd. The Adjudicating Authority rejected the application, leading Chandrashekhar Exports to file an appeal. The dispute centers around Clause 10 of an agreement, which stipulates that if Party No. 2 fails to perform, it must repay the advance along with compensation, penalty, and losses. The Appellant claimed Rs. 1.70 Crore as compensation. The Adjudicating Authority viewed that the claim of compensation cannot be said to be amount on basis of which application under Section 9 can be admitted. The principal amount of Rs.3 Crores has been returned.

## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in rejecting the Section 9 application filed by the …

**Ratio:** An application under Section 9 can only be admitted if the debt is crystallized and

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**Reasoning:** The Adjudicating Authority held that the Operational Debt claimed by the petitioner must

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**Interpretation:** Section 9 of the IBC requires that the operational debt must be clearly

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**Application:** In this case, the claim for compensation was not a crystallized and undisputed

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Chandrashekhar…
- **Respondents:** Babanraoji Shinde…
- **Advocates:** Kunal T…; Pulkit Ag…; +2 more

## Timeline

- **2023-04-28 — Order by Adjudicating…**: The Adjudicating Authority passed an order rejecting the Section 9 application filed by…
- **2023-08-07 — Appeal F…**: The Appellant filed an appeal against the…

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