# In the matter of Praveen Kumar Mundra VS CIL Securities Ltd. CA(AT)(Insolvency) No.  89-2019

> NCLAT judgment dated 2019-05-14. Citation: TCN-2019-NCLAT-00558. Praveen Kumar Mundra, claiming to be an Operational Creditor of CIL Securities Limited…

- **Court:** NCLAT
- **Order date:** 14 May 2019
- **Citation:** TCN-2019-NCLAT-00558
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/praveen-kumar-mundra-vs-cil-securities-ltd-ca-a131862a

## Summary

### Background

Praveen Kumar Mundra, claiming to be an Operational Creditor of CIL Securities Limited (Corporate Debtor), filed an appeal against an order dated December 10, 2018, where his application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (I&B Code) was rejected. The Appellant contended that the Corporate Debtor failed to make payment for services provided until February 28, 2018, with an outstanding due of Rs. 3,26,807.12, confirmed by the Corporate Debtor's ledger account. The Corporate Debtor expressed willingness to process the invoices if the Appellant registered under the GST Act, 2017. The Adjudicating Authority refused to entertain the application under Section 9 of the I&B Code, considering the Corporate Debtor's readiness to pay subject to GST

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## Facts

Praveen Kumar Mundra (Appellant), claiming to be an Operational Creditor of CIL Securities Limited (Corporate Debtor), filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (I&B Code) for unpaid services. The Corporate Debtor allegedly owed Rs. 3,26,807.12 for services provided until February 28, 2018. The Corporate Debtor acknowledged the debt but conditioned payment on the Appellant's registration under the GST Act, 2017. The Adjudicating Authority rejected the application. The Corporate Debtor offered a Demand Draft for Rs. 3,36,978.48 (issued March 5, 2019) through HDFC Bank in favor of 'Peenus Investments' (Operational Creditor). The Appellant refused to accept the Demand Draft, stating the offer was not made when the application was

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was correct in rejecting the Appellant's application under …

**Ratio:** The Adjudicating Authority has the discretion to reject an application under Section 9 of

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**Reasoning:** The Adjudicating Authority considered the Corporate Debtor's willingness to pay the

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**Interpretation:** Section 9 of the I&B Code allows an operational creditor to initiate

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**Application:** In this case, the Corporate Debtor was willing to pay the amount subject to GST

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## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…; +1 more
- **Appellants:** Praveen Kumar…
- **Respondents:** CIL Securities…; CIL Securities…

## Timeline

- **2018-12-10 — Order Da…**: Order dated 10th December, 2018, whereby application under Section 9 of the ‘Insolvency…
- **2018-02-28 — Services Provi…**: Services provided till 28th February, 2018 for which there is an outstanding due amount…

## 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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