# In the matter of Hotel East Palace Private Limited C.P. (IB) No. 115-KB-2019

> NCLT judgment dated 2019-08-07. Citation: TCN-2019-NCLT-02068. The case involves an application for the initiation of a corporate insolvency resolution…

- **Court:** NCLT
- **Order date:** 7 Aug 2019
- **Citation:** TCN-2019-NCLT-02068
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/hotel-east-palace-private-limited-cp-ib-no-115-kb-2019-cad23fec

## Summary

### Background

The case involves an application for the initiation of a corporate insolvency resolution process by an Operational Creditor, Arup Kumar Gupta, against the Corporate Debtor, M/S. Hotel East Palace Private Limited, under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Operational Creditor claimed that the Corporate Debtor had approached them to handle and settle litigation filed by Punjab National Bank regarding a business loan. The Operational Creditor sent an email detailing their fee schedule, which the Corporate Debtor allegedly accepted. The Operational Creditor then engaged advocates and raised a bill of Rs. 10,50,000/-. However, the Corporate Debtor failed to pay the bills despite several requests, leading the Operational Creditor to issue a demand

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## Facts

Arup Kumar Gupta, an Operational Creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against M/S. Hotel East Palace Private Limited, the Corporate Debtor. The Corporate Debtor had approached the Operational Creditor to handle litigation with Punjab National Bank. The Operational Creditor sent a fee schedule via email, which the Corporate Debtor allegedly accepted through a letter dated 11th July, 2018. The Operational Creditor raised a bill of Rs. 10,50,000/-. The Corporate Debtor failed to pay the bill despite requests. A demand notice was sent on 22nd December, 2018, and received by the Corporate Debtor on 26th December, 2018. The Corporate Debtor did not appear before the Tribunal despite being served notice, leading to

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## Issues and analysis

### Issue 1: Whether the Operational Creditor has successfully proven the existence of an operational debt due …

**Ratio:** The burden of proof lies on the Operational Creditor to establish the existence of an

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**Reasoning:** The court found that the Operational Creditor failed to provide sufficient evidence to

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**Interpretation:** The Insolvency and Bankruptcy Code requires the Operational Creditor to

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**Application:** In this case, the Operational Creditor failed to provide sufficient evidence to

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## Parties

- **Judges:** Jinan…; Harish Chander…
- **Appellants:** Arup Kr.…
- **Respondents:** M/S. HOTEL EAST…; Hotel East…

## Timeline

- **2018-06-28 — Operational Creditor…**: The Operational Creditor sent an email to the Corporate Debtor detailing the schedule of…
- **2018-07-11 — Corporate Debtor's…**: The Corporate Debtor allegedly accepted the fee schedule of the Operational Creditor…

## 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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