# In the matter of Daya Engineering Work Pvt. Ltd.  Vs UIC Udyog Ltd.  CP (IB) No. 547-KB-2017

> NCLT judgment dated 2018-05-16. Citation: TCN-2018-NCLT-01399. M/s. Daya Engineering Works Private Limited, claiming to be an operational creditor, filed an…

- **Court:** NCLT
- **Order date:** 16 May 2018
- **Citation:** TCN-2018-NCLT-01399
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/daya-engineering-work-pvt-ltd-vs-uic-udyog-ltd-cp-22d1a81b

## Summary

### Background

M/s. Daya Engineering Works Private Limited, claiming to be an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against M/s. UIC Udyog Limited, seeking to initiate Corporate Insolvency Resolution Process (CIRP). Daya Engineering Works alleged that UIC Udyog made short supplies of HTS wire, despite receiving advance payments for purchase orders placed in the financial year 2014-15. The corporate debtor, UIC Udyog, contested the application, arguing that the application was not in the prescribed format, contained misleading facts, and lacked proper authorization. They also claimed that Daya Engineering Works owed them money for supplies made.

## Facts

Daya Engineering Works Pvt. Ltd. (the applicant) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against UIC Udyog Limited (the corporate debtor/respondent). Daya Engineering Works claimed that it was an operational creditor because UIC Udyog had made short supplies of HTS wire after receiving advance payments. An advance of Rs. 4,14,42,916/- was paid on 04/03/2015. UIC Udyog supplied materials valued at Rs. 4,02,33,473/-, leaving a balance of Rs. 12,09,443/-. Daya Engineering Works issued a legal notice on 22nd May, 2017, demanding payment. UIC Udyog contended that the application was not in the prescribed format, contained misleading facts, and lacked proper authorization. UIC Udyog also claimed that Daya Engineering Works owed them

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## Issues and analysis

### Issue 1: Whether Daya Engineering Works qualifies as an operational creditor under the Insolvency and …

**Ratio:** An "operational creditor" means a person to whom an operational debt is owed

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**Reasoning:** The court found that Daya Engineering Works was a purchaser of goods from UIC Udyog, not

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**Interpretation:** The definition of operational creditor requires a direct provision of goods or

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**Application:** In this case, Daya Engineering Works was seeking a refund of an advance payment

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## Parties

- **Judges:** Jinan…; Madan B.…
- **Appellants:** Daya Engg Works…
- **Respondents:** UIC Udyog L…; UIC Udyog…

## Timeline

- **2014-01-01 — Financial…**: Purchase orders placed by the operational…
- **2015-03-04 — Advance P…**: Operational creditor paid an amount of Rs.…

## 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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