# In the matter of Chipsan Aviation Pvt. Ltd. Vs. Punj Llyod Aviation Ltd.,Company Appeal (AT) (Insolvency) No. 261 of 2022

> NCLAT judgment dated 2022-11-10. Citation: TCN-2022-NCLAT-00115. Chipsan Aviation Private Limited (Appellant) filed an appeal against the order dated…

- **Court:** NCLAT
- **Order date:** 10 Nov 2022
- **Citation:** TCN-2022-NCLAT-00115
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/chipsan-aviation-pvt-ltd-vs-punj-llyod-aviation-ltdcompany-appeal-169d43e2

## Summary

### Background

Chipsan Aviation Private Limited (Appellant) filed an appeal against the order dated 06.01.2022 passed by the National Company Law Tribunal (NCLT), New Delhi, which rejected Section 9 application filed by the Appellant. The Appellant was engaged in business with Punj Llyod Aviation Limited (Corporate Debtor) for charter services of aeroplanes and helicopter, hired on long term basis from non-scheduled operators/owners. The Appellant advanced Rs.60 lakhs to the Corporate Debtor for aviation related services, which were not provided, nor was the advance refunded. The NCLT rejected the Section 9 application, holding that the advance payment did not fall within the definition of Operational Debt.

## Facts

Chipsan Aviation Private Limited (Appellant) and Punj Llyod Aviation Limited (Corporate Debtor) were engaged in business where the Appellant provided charter services of aeroplanes and helicopters to the Corporate Debtor. On 28.03.2016, the Appellant advanced Rs.60 lakhs to the Corporate Debtor for aviation-related services, based on assurances from the Corporate Debtor. However, the Corporate Debtor neither provided the services nor refunded the advance. The advance payment was reflected in the Corporate Debtor's balance sheets as of 31.03.2016 under current liabilities and was continuously shown as advance received from customers during 2015-16, 2016-17, and 2017-18. On 08.11.2017, the Appellant requested the Corporate Debtor to return the amount. On 26.03.2019, the

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## Issues and analysis

### Issue 1: Whether the advance payment of Rs.60 lakhs made by the Appellant to the Corporate Debtor …

**Ratio:** The legal principle is that an 'operational debt' means a claim in respect of the

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**Reasoning:** The court reasoned that the expression 'in respect of' in Section 5(21) should be

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**Interpretation:** The interpretation of 'operational debt' under Section 5(21) of the IBC is

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**Application:** In this case, the Appellant made an advance payment of Rs.60 lakhs to the

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Chipsan Aviation…
- **Respondents:** Punj Llyod…

## Timeline

- **2016-03-28 — Advance P…**: Appellant advanced Rs.60 lakhs to the…
- **2017-11-08 — Request for…**: Appellant wrote to the Corporate…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(21) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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