# In the matter of Fort Gloster Industries Ltd. CP (IB) No. 61-KB-2018

> NCLT judgment dated 2018-08-09. Citation: TCN-2018-NCLT-00961. Jayanta Kumar Panja, an ex-employee of Fort Gloster Industries Limited, filed an application…

- **Court:** NCLT
- **Order date:** 9 Aug 2018
- **Citation:** TCN-2018-NCLT-00961
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/fort-gloster-industries-ltd-cp-ib-no-61-kb-2018-87ac58bf

## Summary

### Background

Jayanta Kumar Panja, an ex-employee of Fort Gloster Industries Limited, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against the company. The application was based on the corporate debtor's default in payment of Rs. 1,13,946/- towards gratuity, which the applicant claimed as an operational debt.

## Facts

Jayanta Kumar Panja, an ex-employee of Fort Gloster Industries Limited, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against the company. The basis for the application was the non-payment of Rs. 1,13,946/- towards gratuity. The applicant claimed this unpaid gratuity constituted an operational debt. The corporate debtor acknowledged the debt on 03/04/2016 but failed to pay, citing financial difficulties and the pending sanction of a BIFR Revival Scheme. The applicant issued a demand notice dated 06/11/2017, which was received by the corporate debtor. The corporate debtor contended that the application was not maintainable as the applicant was not an operational creditor and

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## Issues and analysis

### Issue 1: Whether the unpaid gratuity amount of Rs. 1,13,946/- constitutes an 'operational debt' under the …

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

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**Reasoning:** The court reasoned that any dues owed by an employer to an employee become a debt within

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**Interpretation:** The interpretation of 'operational debt' is broad enough to include dues

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

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## Parties

- **Judges:** Jinan…
- **Appellants:** Jayanta Kumar…
- **Respondents:** Fort Gloster…
- **Advocates:** Nikunj B…; Urmila Chak…; +2 more

## Timeline

- **2016-04-03 — Acknowledgment…**: Corporate debtor acknowledged the debt…
- **2017-11-06 — Demand Notice…**: Applicant issued a demand…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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