# In the matter of M.S. Jain Vs, TVS Limited Company Appeal (AT) (Ins) No. 952-2019

> NCLAT judgment dated 2019-12-11. Citation: TCN-2019-NCLAT-00035. This case involves an appeal against an order passed by the National Company Law Tribunal…

- **Court:** NCLAT
- **Order date:** 11 Dec 2019
- **Citation:** TCN-2019-NCLAT-00035
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/ms-jain-vs-tvs-limited-company-appeal-at-ins-no-952-2019-0237028a

## Summary

### Background

This case involves an appeal against an order passed by the National Company Law Tribunal (NCLT), Division Bench, Chennai, which admitted an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC). The application was filed by TVG Limited (Operational Creditor) against Kiran Global Chem Limited (Corporate Debtor). The appeal was filed by M.S. Jain, a shareholder and Director of the Corporate Debtor, taking up the cause of the Corporate Debtor. The Operational Creditor claimed to be a Financial Advisor for PTAL International FZC, a subsidiary of the Corporate Debtor. The Corporate Debtor was engaged in manufacturing Sodium Silicate and traded in Soda Ash. The Operational Creditor was engaged by PTAL in connection with a potential transaction

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## Facts

1. TVG Limited (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Kiran Global Chem Limited (Corporate Debtor).
2. M.S. Jain, a shareholder and Director of the Corporate Debtor, filed an appeal against the admission of the application by the Adjudicating Authority (National Company Law Tribunal, Division Bench, Chennai).
3. TVG Limited claimed to be a Financial Advisor for PTAL International FZC, a subsidiary of Kiran Global Chem Limited.
4. Kiran Global Chem Limited was engaged in manufacturing Sodium Silicate and traded in Soda Ash.
5. An engagement letter was executed between TVG Limited and PTAL, where TVG Limited was to provide financial advisory services.
6. The engagement letter stipulated a signing

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## Issues and analysis

### Issue 1: Whether the Section 9 application under the Insolvency and Bankruptcy Code, 2016 is maintainable …

**Ratio:** The definition of 'operational debt' under Section 5(21) of the IBC does not explicitly

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**Reasoning:** The legislature's intention is apparent as, while defining 'financial debt', a

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**Interpretation:** The interpretation of Section 5(21) is strict, limiting 'operational debt' to

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**Application:** Since Kiran Global was acting as a guarantor for PTAL's operational debt, and

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## Parties

- **Judges:** A.I.S. C…; Kanthi Na…; +2 more
- **Appellants:** M.S.…
- **Respondents:** Kiran Global Chem…; TVG Lim…
- **Advocates:** Krishnendu…; Ravi Ragh…; +7 more

## Timeline

- **2016-01-01 — Enactment…**: The Insolvency and Bankruptcy…
- **2017-04-10 — Engagement…**: Engagement letter dated 10th April, 2017 was…

## 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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