# In the matter of Neumec Estate Developers LLP CP (IB) No.2290-2019

> NCLT judgment dated 2020-04-30. Citation: TCN-2020-NCLT-01389. The case involves two company petitions (CP (IB) No.2290/2019 and CP (IB) No.2508/2019) filed…

- **Court:** NCLT
- **Order date:** 30 Apr 2020
- **Citation:** TCN-2020-NCLT-01389
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/neumec-estate-developers-llp-cp-ib-no2290-2019-157847f5

## Summary

### Background

The case involves two company petitions (CP (IB) No.2290/2019 and CP (IB) No.2508/2019) filed by Dhaval Ranchhod Patel and Ranchhod Ganesh Patel, respectively, against Neumec Estate Developers LLP, the corporate debtor. The petitioners, originally tenants, entered into an agreement with the corporate debtor and the owner of the premises for permanent alternate accommodation on July 21, 2011. The agreement stipulated that the corporate debtor would demolish the existing structure, construct flats of 350 sq ft for each petitioner, and provide temporary transit accommodation compensation until the flats were handed over with an occupancy certificate. The corporate debtor completed construction and handed over flats to other tenants in December 2016 but failed to obtain an

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## Facts

Dhaval Ranchhod Patel and Ranchhod Ganesh Patel (the petitioners) were tenants in a building complex. On July 21, 2011, the petitioners, Neumec Estate Developers LLP (the corporate debtor), and the owner of the premises entered into an agreement for permanent alternate accommodation. The corporate debtor agreed to demolish the existing structure and construct flats measuring 350 sq ft for each petitioner. The corporate debtor also agreed to pay compensation for temporary transit accommodation until the flats were handed over with an occupancy certificate. In December 2016, the corporate debtor completed construction and handed over flats to other tenants, but the petitioners refused to take possession because the corporate debtor failed to obtain an occupancy

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## Issues and analysis

### Issue 1: Whether the compensation claimed by the petitioners qualifies as an 'operational debt' under …

**Ratio:** For an amount to be classified as an operational debt under the I&B Code, it must

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**Reasoning:** The court reasoned that the compensation claimed by the petitioners was essentially

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**Interpretation:** The interpretation of 'operational debt' under Section 5(21) of the I&B

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**Application:** In this case, the court applied the ratio by determining that the compensation

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## Parties

- **Judges:** Smt Suchitra…; V. Nallasen…
- **Appellants:** Dhaval Ranchhod…
- **Respondents:** Neumec Estate…
- **Advocates:** Archana R…; Rajan Ag…

## Timeline

- **2011-07-21 — Agreement for Alternate…**: The petitioners, the corporate debtor, and the owner of the premises entered into an…
- **2016-12-01 — Construction C…**: The corporate debtor completed construction and handed over flats to other tenants, but…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3(6) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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