# In the matter of Fortis Clinical Research Ltd. (IB)-617-(ND)-2018

> NCLT judgment dated 2018-07-16. Citation: TCN-2018-NCLT-01135. The case involves an application filed by Sun Pharmaceutical Industries Ltd. (erstwhile Ranbaxy…

- **Court:** NCLT
- **Order date:** 16 Jul 2018
- **Citation:** TCN-2018-NCLT-01135
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/fortis-clinical-research-ltd-ib-617-nd-2018-a3f079ca

## Summary

### Background

The case involves an application filed by Sun Pharmaceutical Industries Ltd. (erstwhile Ranbaxy Laboratories Ltd.) as an Operational Creditor against Fortis Clinical Research Ltd., the Corporate Debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Operational Creditor claimed an operational debt of Rs. 5,95,27,000/- due from the Corporate Debtor. A Master Service Agreement was executed between the parties on 23.04.2010 for conducting Bioavailability/Bioequivalence studies. An amendment agreement was also executed terminating the Master Service agreement, where the Corporate Debtor agreed to refund Rs. 7 crores by 31st December, 2015. The Corporate Debtor made a part payment of Rs. 1,04,73,000/-, leaving the outstanding balance.

## Facts

Sun Pharmaceutical Industries Ltd. (formerly Ranbaxy Laboratories Ltd.) is an Operational Creditor engaged in pharmaceutical formulations. Fortis Clinical Research Ltd. is a Corporate Debtor engaged in clinical research. A Master Service Agreement was executed on 2010-04-23 between the parties for Bioavailability/Bioequivalence studies. An amendment agreement terminated the Master Service Agreement, with the Corporate Debtor agreeing to refund Rs. 7 crores by 2015-12-31. The Corporate Debtor made a part payment of Rs. 1,04,73,000/-, leaving an outstanding balance of Rs. 5,95,27,000/-. The Operational Creditor issued a demand notice on 2018-04-16, which was not replied to. The Corporate Debtor opposed the petition, claiming it was time-barred. The Operational Creditor

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## Issues and analysis

### Issue 1: Whether the petition filed by the Operational Creditor is maintainable under Section 9 of the …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016 allows an operational creditor to

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**Reasoning:** The court considered the submissions made by the Operational Creditor's counsel and the

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**Interpretation:** Section 9 provides a mechanism for operational creditors to recover their dues

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**Application:** The court applied Section 9 to the facts of the case and found that the

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## Parties

- **Judges:** Ina Mal…
- **Appellants:** M/s. Sun Pharmaceu…
- **Respondents:** M/s. Fortis…

## Timeline

- **2010-04-23 — Master Service…**: A Master Service Agreement was executed between Ranbaxy Laboratories Ltd. and Fortis…
- **2011-06-20 — Amended Agr…**: An amendment agreement was executed, terminating the Master Service Agreement, where the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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