# In the matter of Associated Machinery Corporation Limited CP (IB) 297-ALD-2018

> NCLT judgment dated 2018-12-04. Citation: TCN-2018-NCLT-00199. Metco Tracom Pvt Ltd, styling itself as an Operational Creditor, filed a petition under Section…

- **Court:** NCLT
- **Order date:** 4 Dec 2018
- **Citation:** TCN-2018-NCLT-00199
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/associated-machinery-corporation-limited-cp-ib-297-ald-2018-3d7e47fa

## Summary

### Background

Metco Tracom Pvt Ltd, styling itself as an Operational Creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process against M/s Associated Machinery Corporation Limited, referred to as the Corporate Debtor. The petitioner claimed that it had placed an order for the supply of machinery worth Rs. 2,36,50,000/- and paid an advance of Rs. 35,47,500/-. The respondent allegedly failed to deliver the machinery and subsequently issued dishonored cheques to M/s Sanjay Associates Pvt Ltd, a sister concern of the petitioner, towards repayment of the advance.

## Facts

Metco Tracom Pvt Ltd (Petitioner) filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 against M/s Associated Machinery Corporation Limited (Respondent), seeking to initiate Corporate Insolvency Resolution Process. The Petitioner claimed to be an Operational Creditor, asserting that the Respondent owed an operational debt. The Petitioner placed an order for the supply of machinery worth Rs. 2,36,50,000/- and paid an advance of Rs. 35,47,500/- on May 6, 2017. The advance was paid from the account of M/s Sanjay Associates Pvt Ltd, a sister concern of the Petitioner. The Respondent failed to deliver the machinery by the agreed date of July 31, 2017. The Respondent issued two cheques in favor of M/s Sanjay Associates Pvt Ltd for Rs. 8,00,000/- and

…

## Issues and analysis

### Issue 1: Whether there exists an operational debt due from the respondent to the petitioner under Section …

**Ratio:** An operational debt is defined under Section 5(21) of the IBC as a claim in respect of

…

**Reasoning:** The court reasoned that the advance payment was made by M/s Sanjay Associate Pvt Ltd, not

…

**Interpretation:** The court interpreted the definition of operational debt and operational

…

**Application:** The court applied the definition of operational debt to the facts of the case,

…

## Parties

- **Judges:** BIKKI RAVEENDRA…; Saroj Ra…
- **Appellants:** METCO TRACOM PVT.…
- **Respondents:** M/S ASSOCIATED…

## Timeline

- **2017-05-06 — Advance P…**: Petitioner paid 15% advance amount i.e. 35,47,500/- out of the total amount of Rs.…
- **2017-07-31 — Delivery…**: Respondent agreed to deliver the machine within three months i.e. on 31st July, 2017 at…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(20) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/associated-machinery-corporation-limited-cp-ib-297-ald-2018-3d7e47fa