# In the matter of Sashi Kanta Jha and Anr. vs. Devi Prasad and Ors.

> NCLAT judgment dated 2025-04-30. Citation: TCN-2025-NCLAT-00375. The appeal was filed by a suspended director of the corporate debtor, Juggilal Kamlapat Jute…

- **Court:** NCLAT
- **Order date:** 30 Apr 2025
- **Citation:** TCN-2025-NCLAT-00375
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/sashi-kanta-jha-and-anr-vs-devi-prasad-and-ors-31f1ed27

## Summary

### Background

The appeal was filed by a suspended director of the corporate debtor, Juggilal Kamlapat Jute Mills Company Limited (now Geo Jute Ltd.), challenging the order dated 19.01.2024 passed by the Adjudicating Authority (National Company Law Tribunal, Allahabad Bench, Prayagraj), which admitted a Section 9 application filed by Devi Prasad.

## Facts

The corporate debtor, JK Jute Mills Company Limited, was under BIFR from 1994 until 25.11.2016 when SICA was repealed.

A Section 9 application was filed by Devi Prasad, leading to the initiation of CIRP against the corporate debtor.

The Adjudicating Authority admitted the Section 9 application on 19.01.2024, holding that the operational creditor had proven the debt and default.

The appellant argued that the claim was not an operational debt and was barred by res judicata due to a previous application by JK Jute Mazdoor Morcha.

The respondent argued that the gratuity claim constituted an operational debt and there was no pre-existing dispute.

…

## Issues and analysis

### Issue 1: Whether the payment of gratuity claim by an operational creditor constitutes an operational debt …

**Ratio:** Yes, the payment of gratuity along with interest claimed by the R-1 is on the basis of

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**Reasoning:** The Tribunal relied on Section 5(21) of the IBC, which defines operational debt to

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**Interpretation:** The Tribunal interpreted the definition of operational debt broadly to include

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**Application:** The Tribunal applied this interpretation to the facts of the case, finding that

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Sashi Kan…; Acme Consultant…
- **Respondents:** Juggilal Kamlapat…; Geo Jute…; +3 more
- **Other parties:** JK Jute Mazdoor…
- **Advocates:** Abhijeet…; Anuj Ti…; +11 more

## Timeline

- **1994 — BIFR Refe…**: JK Jute Mills Company Limited filed Reference No. 149/1994 before the Board of Industrial…
- **2016-11-25 — SICA Rep…**: The Draft Representation Scheme before BIFR abated due to repeal of SICA with effect from…

## 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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