# In the matter of EMCO Ltd. C.P.(IB)-2849-(MB)-2018

> NCLT judgment dated 2019-07-22. Citation: TCN-2019-NCLT-02395. Jet Roadlines (India) Pvt. Ltd., an operational creditor, filed a petition under Section 9 of…

- **Court:** NCLT
- **Order date:** 22 Jul 2019
- **Citation:** TCN-2019-NCLT-02395
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/emco-ltd-cpib-2849-mb-2018-1a2d4469

## Summary

### Background

Jet Roadlines (India) Pvt. Ltd., an operational creditor, filed a petition under Section 9 of the Insolvency & Bankruptcy Code, 2016 against EMCO Ltd., the corporate debtor, due to an outstanding operational debt of ₹62,20,321 plus interest of ₹15,69,492, totaling ₹77,89,813. The operational creditor is in the business of supporting and auxiliary transport activities, while the corporate debtor is involved in manufacturing electric motors, generators, and transformers. The debt fell due between 2016-11-22 and 2018-03-31. The operational creditor issued a demand notice on 2018-06-14 after the corporate debtor failed to pay the outstanding amount.

## Facts

Jet Roadlines (India) Pvt. Ltd., the operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against EMCO Ltd., the corporate debtor, for an outstanding operational debt. The debt amounted to ₹62,20,321 plus interest of ₹15,69,492, totaling ₹77,89,813. Jet Roadlines is involved in supporting and auxiliary transport activities, while EMCO Ltd. manufactures electric motors, generators, and transformers. The debt fell due between 2016-11-22 and 2018-03-31. The operational creditor issued a demand notice in Form No.3 on 2018-06-14. EMCO Ltd. replied on 2018-06-22, stating that the claimed amount did not match their books of accounts. The operational creditor argued that the corporate debtor did not provide any elucidation

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted as defined under Section 3(12) of the Insolvency & …

**Ratio:** Section 3(12) of the Insolvency & Bankruptcy Code, 2016 defines 'default' as

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**Reasoning:** The court considered the totality of the facts and circumstances and found that the

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**Interpretation:** The interpretation of Section 3(12) requires the court to determine if a debt

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**Application:** In this case, the operational creditor provided invoices and other documents to

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## Parties

- **Judges:** M.K. Sh…
- **Appellants:** Jet Roadlines…
- **Respondents:** EMCO…

## Timeline

- **2016-11-22 — Debt Due Dat…**: The debt amount fell due…
- **2018-03-31 — Debt Due Da…**: The debt amount fell…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3(12) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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