# In the matter of Avadh Rail India Limited CP-691-(IB)-CB-2017

> NCLT judgment dated 2018-02-08. Citation: TCN-2018-NCLT-01863. The case involves an application filed under Section 9 of the I&B Code, 2016, by Mr. Kamal…

- **Court:** NCLT
- **Order date:** 8 Feb 2018
- **Citation:** TCN-2018-NCLT-01863
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/avadh-rail-india-limited-cp-691-ib-cb-2017-084efa12

## Summary

### Background

The case involves an application filed under Section 9 of the I&B Code, 2016, by Mr. Kamal Chand (the operational creditor) against M/s. Avadh Rail Infra Limited (the corporate debtor). The operational creditor's service was terminated by the respondent company, leading to a civil suit filed by the applicant in the High Court of Madras for compensation. The High Court decreed the suit in favor of the applicant, directing the respondent to pay a sum of Rs. 23,24,938.12 with interest. The corporate debtor filed a counter, stating they had filed an appeal in OSA No. 123 of 2012, with a condition that the respondent deposit Rs. 10 lakhs. The High Court stayed the order in CS No. 429/2000. The appeal was later dismissed for default, and a restoration petition was filed,

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## Facts

Mr. Kamal Chand (Operational Creditor) filed an application under Section 9 of the I&B Code, 2016 against M/s. Avadh Rail Infra Limited (Corporate Debtor). The Operational Creditor's service was terminated by the Respondent Company, leading to a Civil Suit (C.S. No. 429/2000) in the High Court of Madras for compensation. The High Court decreed the suit on 07.06.2011, ordering the Respondent to pay Rs. 23,24,938.12 with interest. The Corporate Debtor filed an appeal (OSA No. 123 of 2012) with a condition to deposit Rs. 10 lakhs, resulting in a stay of the High Court's order. The appeal was dismissed for default, and a restoration petition is pending. The Applicant appropriated the Rs. 10 lakhs deposit. The Corporate Debtor denied the debt, claiming the application

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor under Section 9 of the I&B Code, 2016 …

**Ratio:** Section 9 of the I&B Code, 2016 allows an operational creditor to initiate corporate

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**Reasoning:** The Adjudicating Authority considered the documents and submissions made by both parties

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**Interpretation:** Section 9 provides the mechanism for operational creditors to recover their

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**Application:** The Adjudicating Authority found that the Operational Creditor had met the

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## Parties

- **Judges:** K. Anantha…; S. VIJAYARA…
- **Appellants:** Mr.Kamal…
- **Respondents:** M/s. Madras…; M/s. AVADH RAIL…
- **Advocates:** Shri. Aashish…; Shri. R…

## Timeline

- **2000-01-01 — Civil Suit…**: Applicant filed a Civil Suit in C.S. No. 429/2000 before the High Court of Madras praying…
- **2011-06-07 — High Court…**: The High Court decreed the suit, directing the Respondent to pay Rs. 23,24,938.12 with…

## 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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