# In the matter of Mahendrakumar Babulal Jewels Pvt. Ltd. CP (IB) No. 408-9-NCLT-AHM-2018

> NCLT judgment dated 2018-11-16. Citation: TCN-2018-NCLT-00319. The case involves an application filed by M/s. D.K. Jewellers, an operational creditor, against…

- **Court:** NCLT
- **Order date:** 16 Nov 2018
- **Citation:** TCN-2018-NCLT-00319
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mahendrakumar-babulal-jewels-pvt-ltd-cp-ib-no-408-9-nclt-ahm-2018-f9c242e4

## Summary

### Background

The case involves an application filed by M/s. D.K. Jewellers, an operational creditor, against M/s. Mahendrakumar Babulal Jewels Private Limited (MBPL), the corporate debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, for initiation of the corporate insolvency resolution process. D.K. Jewellers claimed that MBPL defaulted on payments for supplied jewellery, including 22 and 24 carat gold items and diamonds. The operational creditor asserted that the corporate debtor acknowledged the debt through regular balance confirmations and ledger entries. The total outstanding amount was Rs. 54,20,017/-, excluding interest at 18% per annum. The applicant contended that the corporate debtor was liquidating assets to defeat the claims of operational creditors.

## Facts

M/s. D.K. Jewellers, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the corporate insolvency resolution process against M/s. Mahendrakumar Babulal Jewels Private Limited (MBPL), the corporate debtor. MBPL was incorporated on 04.01.2011 with a share capital of Rs. 60,000,000/-. D.K. Jewellers supplied jewellery, including 22 and 24 carat gold items and diamonds, to MBPL. The total outstanding debt was Rs. 54,20,017/-, excluding interest at 18% per annum. MBPL acknowledged the debt through balance confirmations, the most recent being on 31.07.2018. D.K. Jewellers issued a demand notice under Section 8 of the IBC on 16.08.2018, which MBPL did not respond to within the statutory time limit. MBPL

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## Issues and analysis

### Issue 1: Whether the debt claimed by the applicant constitutes an 'operational debt' as defined under the …

**Ratio:** Section 5(21) of the IBC defines 'operational debt' as a debt in respect of the supply of

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**Reasoning:** The Adjudicating Authority observed that the amount due to the applicant from the

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**Interpretation:** The interpretation of 'operational debt' under Section 5(21) is broad and

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**Application:** In this case, the debt arose from the supply of jewellery by D.K. Jewellers to

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## Parties

- **Judges:** Manorama…
- **Appellants:** D.K. Jewe…
- **Respondents:** Mahendrakumar…
- **Advocates:** Shashvata…; Jaimin…

## Timeline

- **2011-01-04 — Incorporation of…**: M/s. Mahendrakumar Babulal Jewels…
- **2018-07-31 — Balance Confi…**: Respondent submitted…

## 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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