# In the matter of Eco Rich Cosmetic India Private Limited TCP No. 892-IBC-NCLT-MB-MAH-2017

> NCLT judgment dated 2018-04-26. Citation: TCN-2018-NCLT-01497. The case originates from a winding-up petition filed by Prime Products (Operational Creditor)…

- **Court:** NCLT
- **Order date:** 26 Apr 2018
- **Citation:** TCN-2018-NCLT-01497
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/eco-rich-cosmetic-india-private-limited-tcp-no-892-ibc-nclt-mb-mah-2017-9fddd6aa

## Summary

### Background

The case originates from a winding-up petition filed by Prime Products (Operational Creditor) against Eco Rich Cosmetic India Private Limited (Corporate Debtor) in the Bombay High Court under Section 433(e) of the Companies Act, 1956. Following the enactment of the Insolvency and Bankruptcy Code, 2016, the petition was transferred to the NCLT, Mumbai Bench. The Operational Creditor then furnished Form No. 5 under Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, initiating proceedings under Section 9 of the IBC.

## Facts

Prime Products, an Operational Creditor engaged in manufacturing soft drinks and PET bottles, had a business relationship with Eco Rich Cosmetic India Private Limited, the Corporate Debtor. In April 2015, the Debtor approached the Creditor for business. The Debtor placed a purchase order (no. 1516010 dated 2015-04-15) for PET bottles and caps, with payment terms of 30 days from delivery. The Creditor supplied goods worth ₹11,64,081/- between May and July 2015, with the last order received on 2015-07-16. The Debtor acknowledged receipt of the goods and invoices but failed to make payments. On 2015-10-27, the Debtor forwarded a ledger account confirming the balance and admitting liability. In January 2016, the Debtor issued two post-dated cheques for ₹1,75,000 each,

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## Issues and analysis

### Issue 1: Whether the nature of the debt is an 'Operational Debt' as defined under section 5 (21) of the …

**Ratio:** Section 5(21) of the Insolvency and Bankruptcy Code, 2016 defines 'operational debt' as a

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**Reasoning:** The court considered the facts and circumstances, including the supply of goods by the

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**Interpretation:** The court interpreted Section 5(21) to determine if the debt arising from the

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

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## Parties

- **Judges:** M.K. Sh…; Bhaskara Pantula…
- **Appellants:** Prime Pro…
- **Respondents:** Eco Rich Cosmetic…; M/s. Eco Rich…

## Timeline

- **2016-09-22 — Winding-up Petition…**: Prime Products filed a winding-up petition against Eco Rich Cosmetic India Private…
- **2017-03-20 — Form No. 5 Fu…**: The Operational Creditor furnished Form No. 5 under Rule 6 of the Insolvency and…

## 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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