# In the matter of Global Proserv Limited CP No. 1548-IBC-NCLT-MB-MAH-2017

> NCLT judgment dated 2018-02-23. Citation: TCN-2018-NCLT-01778. The case pertains to an application filed under Section 9 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 23 Feb 2018
- **Citation:** TCN-2018-NCLT-01778
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/global-proserv-limited-cp-no-1548-ibc-nclt-mb-mah-2017-5f6ea675

## Summary

### Background

The case pertains to an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by M/s. Auspice Trading Private Limited (Operational Creditor) against M/s. Global Prosery Limited (Corporate Debtor) for initiating the Corporate Insolvency Resolution Process (CIRP) due to an alleged default in payment of an operational debt. The Operational Creditor claimed that the Corporate Debtor defaulted on payments amounting to ₹9,02,01,328/-. The Operational Creditor had supplied materials to the Corporate Debtor, and disputes arose regarding the placed order, leading to the cancellation of the order. Subsequently, the Corporate Debtor proposed a Share Purchase Agreement, which the Operational Creditor accepted, purchasing shares amounting to ₹7,10,00,000/-.

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## Facts

M/s. Auspice Trading Private Limited (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against M/s. Global Prosery Limited (Corporate Debtor) for defaulting on an operational debt of ₹9,02,01,328/-. The Corporate Debtor was engaged in the supply of materials for telecom towers. The Operational Creditor had paid an advance of ₹16,83,61,328/- for business purchases. Due to issues between the Operational Creditor and its clients, the placed order was cancelled on 2013-11-19. The Debtor repaid ₹71,60,000/-. The Debtor proposed a Share Purchase Agreement on 2015-12-18, and the Operational Creditor purchased shares of M/s. European Projects & Avaition Limited for ₹7,10,00,000/-. The Debtor agreed to pay the remaining

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## Issues and analysis

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

**Ratio:** Section 5(21) of the Insolvency and Bankruptcy

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**Reasoning:** The court considered the fact that the Operational Creditor had issued valid purchase

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**Interpretation:** The court interpreted the definition of 'Operational Debt' under Section 5(21)

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**Application:** The court applied the definition of 'Operational Debt' to the facts of the

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## Parties

- **Judges:** M.K. Sh…; Bhaskara Pantula…
- **Appellants:** M/s. Auspice…
- **Respondents:** M/s. Global…

## Timeline

- **2013-11-19 — Order Cance…**: Operational Creditor cancelled the…
- **2015-12-18 — Share Purchase…**: Debtor proposed to enter into…

## 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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