# In the matter of Juggilal Kamlpat Jute Mills Company Ltd CA No.(IB) 36-ALD-2017

> NCLT judgment dated 2017-04-28. Citation: TCN-2017-NCLT-00882. The J.K. Jute Mills Mazdoor Morcha, an operational creditor, filed an application under Section…

- **Court:** NCLT
- **Order date:** 28 Apr 2017
- **Citation:** TCN-2017-NCLT-00882
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/juggilal-kamlpat-jute-mills-company-ltd-ca-noib-36-ald-2017-593570ad

## Summary

### Background

The J.K. Jute Mills Mazdoor Morcha, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Juggilal Kamlpat Jute Mills Company Ltd., the corporate debtor, for non-payment of operational debts, specifically worker dues. The operational creditor claimed that the corporate debtor defaulted in making payments of operational debts/worker dues to the applicant's Union. The application was filed based on a demand notice issued to the corporate debtor in Form No. 3 of the Insolvency and Bankruptcy Code, 2016, demanding payment of its operational debts amounting to Rs. 131.90 Crores. The corporate debtor disputed the delivery of the demand notice and raised

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## Facts

J.K. Jute Mills Mazdoor Morcha, representing workers, filed an application to initiate CIRP against Juggilal Kamlpat Jute Mills Company Ltd. for unpaid worker dues amounting to Rs. 131.90 Crores. The operational creditor issued a demand notice on 14.03.2017, claiming dues under various labor laws. The corporate debtor disputed the delivery of the demand notice, claiming it was received on 21.03.2017. The corporate debtor also filed a civil suit on 21.03.2017 against the worker's union. The corporate debtor argued that the worker's union lacked locus standi and that the dues were disputed and related to a period when the factory was closed. The corporate debtor had a pending reference before the BIFR, and a writ petition was pending before the Allahabad High Court

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## Issues and analysis

### Issue 1: Whether the application filed by the operational creditor is maintainable under Section 9 of the …

**Ratio:** The Adjudicating Authority under the Insolvency and Bankruptcy Code is not expected to go

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**Reasoning:** The NCLT reasoned that the dues claimed by the operational creditor were disputed and

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**Interpretation:** Section 9 of the Insolvency and Bankruptcy Code allows an operational creditor

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**Application:** The NCLT applied the ratio to the facts of the case, noting that the dues were

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## Parties

- **Judges:** Harihar Prakash…
- **Appellants:** J.K. Jute Mills…
- **Respondents:** Juggilal Kamlapat…

## Timeline

- **2017-03-14 — Demand Notice…**: The operational creditor, J.K. Jute Mills Mazdoor Morcha, issued a demand notice to the…
- **2017-03-21 — Civil Suit…**: The corporate debtor, Juggilal Kamlpat Jute Mills Company Ltd., filed a civil suit…

## 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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