# In the matter of Endless Properties Private Limited C.P. (IB) No. 737-KB-2019

> NCLT judgment dated 2019-08-21. Citation: TCN-2019-NCLT-01868. This case involves an application filed by Vaikunth Motor Finance Private Limited, the…

- **Court:** NCLT
- **Order date:** 21 Aug 2019
- **Citation:** TCN-2019-NCLT-01868
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/endless-properties-private-limited-cp-ib-no-737-kb-2019-37212b4e

## Summary

### Background

This case involves an application filed by Vaikunth Motor Finance Private Limited, the Operational Creditor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Endless Properties Private Limited, the Corporate Debtor, due to a default in payment of an operational debt amounting to Rs. 25,66,301. The Operational Creditor claims that the Corporate Debtor failed to pay the outstanding debt despite repeated requests and reminders. The debt arose from the sale of equity shares by the Operational Creditor to the Corporate Debtor.

## Facts

Vaikunth Motor Finance Private Limited (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Endless Properties Private Limited (Corporate Debtor). The application was based on a default in payment of an operational debt amounting to Rs. 25,66,301. The debt arose from the sale of 5,00,000 equity shares of Navketan Merchants Limited by the Operational Creditor to the Corporate Debtor. The Operational Creditor had transferred the equity shares to the Demat Account maintained by the Corporate Debtor on 03.03.2017. The Operational Creditor maintained a ledger account of the Corporate Debtor from 03.03.2017 to 21.01.2019. Despite repeated requests, the debt

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## Issues and analysis

### Issue 1: Whether the transaction of sale of Equity …

**Ratio:** Section 5(21) of the Insolvency and Bankruptcy Code defines 'Operational Debt' as a claim

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**Reasoning:** The court reasoned that to initiate CIRP under Section 9 of the I&B Code, the claim

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**Interpretation:** The interpretation of 'Operational Debt' hinges on whether the underlying

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**Application:** In this case, the court applied the definition of 'goods' from the Sale of

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## Parties

- **Judges:** Jinan…
- **Appellants:** Vaikunth Motor…
- **Respondents:** Endless Properties…

## Timeline

- **2017-03-03 — Equity Shares…**: Operational Creditor transferred equity shares to the Demat Account of the Corporate…
- **2017-03-03 — Invoice…**: Invoice raised by the Operational…

## 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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