# In the matter of Mr. Pradeep Dayanand Kothari Vs. A Pandian & Anr. Company Appeal (AT) (Insolvency) No. 11 of 2018

> NCLAT judgment dated 2018-02-07. Citation: TCN-2018-NCLAT-00380. The appeal was filed by Mr. Pradeep Dayanand Kothari, Director of Kothari Industrial…

- **Court:** NCLAT
- **Order date:** 7 Feb 2018
- **Citation:** TCN-2018-NCLAT-00380
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/mr-pradeep-dayanand-kothari-vs-a-pandian-anr-company-appeal-ff248874

## Summary

### Background

The appeal was filed by Mr. Pradeep Dayanand Kothari, Director of Kothari Industrial Corporation Limited, against an order dated December 19, 2017, passed by the Adjudicating Authority (National Company Law Tribunal), Chennai Bench, Chennai, in Company Petition No. 649/(IB)/CB/2017. The Adjudicating Authority had admitted an application preferred by the 1st Respondent, Mr. A. Pandian, under Section 7 of the Insolvency and Bankruptcy Code, 2016, declared a moratorium, and appointed an Interim Resolution Professional.

## Facts

Mr. Pradeep Dayanand Kothari, Director of Kothari Industrial Corporation Limited, filed an appeal against the order of the Adjudicating Authority (NCLT), Chennai, which had admitted an application by Mr. A. Pandian under Section 7 of the Insolvency and Bankruptcy Code (IBC). Mr. Pandian initially claimed to be an operational creditor, issuing a demand notice for Rs. 68,61,012/- under Section 8 of the IBC. This debt arose from short-term loans advanced between 2013 and 2014 for trading operations in Rock and Super Phosphate. Kothari Industrial Corporation Limited defaulted on payments, issuing two cheques totaling Rs. 44,14,210/- which were dishonored on December 23, 2014, due to insufficient funds. The corporate debtor admitted to a debt of Rs. 44,00,000/- in a letter

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the ‘I&B Code' filed by 1st Respondent was …

**Ratio:** An application under Section 7 of the I&B Code is maintainable only if the applicant

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**Reasoning:** The appellate tribunal observed that the 1st Respondent himself was unclear whether he

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**Interpretation:** The I&B Code distinguishes between ‘Financial Creditors' and ‘Operational

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**Application:** In this case, the 1st Respondent initially claimed to be an ‘Operational

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Pradeep Dayanand…
- **Respondents:** Kothari Industrial…; A. Pan…

## Timeline

- **2017-12-19 — Order by Adjudicating…**: The Adjudicating Authority (National Company Law Tribunal), Chennai Bench, Chennai,…
- **2018-02-07 — Appeal F…**: Mr. Pradeep Dayanand Kothari, Director of M/s. Kothari Industrial Corporation Limited,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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