# In the matter of R K Manufacturing Co. Ltd. C.P. (I.B) No. 387-9-NCLT-AHM-2019

> NCLT judgment dated 2020-08-19. Citation: TCN-2020-NCLT-00820. M/s. Mewar Technocast Private Limited (CP (IB) No. 387/NCLT/AHM/2019) and M/s. Mewar Hi-Tech…

- **Court:** NCLT
- **Order date:** 19 Aug 2020
- **Citation:** TCN-2020-NCLT-00820
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/r-k-manufacturing-co-ltd-cp-ib-no-387-9-nclt-ahm-2019-0dbe8dd6

## Summary

### Background

M/s. Mewar Technocast Private Limited (CP (IB) No. 387/NCLT/AHM/2019) and M/s. Mewar Hi-Tech Engineering Limited (CP (IB) No. 388/NCLT/AHM/2019) filed petitions under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate corporate insolvency resolution process against R.K. Manufacturing Co. Ltd. The claims relate to the refund of advance money paid for the purchase and supply of machinery. Mewar Technocast Private Limited placed an order on 03.10.2016 and Mewar Hi-Tech Engineering Limited placed an order on 04.10.2016, both with R.K. Manufacturing Co. Ltd. for the supply of 'Vertical Turning Lathe 3 Mtr.' and made advance payments. The machinery was to be delivered within one month from the date of advance payment, with the balance payment due upon

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## Facts

M/s. Mewar Technocast Private Limited (CP (IB) No. 387/NCLT/AHM/2019) placed order No. P00911 dated 03.10.2016 with R.K. Manufacturing Co. Ltd. for the purchase and supply of 'Vertical Turning Lathe 3 Mtr.' and made an advance payment of Rs. 25,00,000/- (50% of the total payment). M/s. Mewar Hi-Tech Engineering Limited (CP (IB) No. 388/NCLT/AHM/2019) placed order No. P07531 dated 04.10.2016 with R.K. Manufacturing Co. Ltd. for the purchase and supply of 'Vertical Turning Lathe 3 Mtr.' and made an advance payment of Rs. 26,00,000/- (50% of the total payment). The purchase orders stipulated that the machinery should be delivered within one month from the date of advance payment, with the balance 50% payment to be made upon delivery. R.K. Manufacturing Co. Ltd. failed to

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## Issues and analysis

### Issue 1: Whether the advance amount paid for getting supply of goods or services can be considered as …

**Ratio:** An 'Operational Creditor' is defined as a person to whom an operational debt is owed, and

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**Reasoning:** The Adjudicating Authority reasoned that the creditors (Mewar Technocast Private Limited

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**Interpretation:** The interpretation of 'operational debt' requires an actual provision of goods

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**Application:** In this case, since R.K. Manufacturing Co. Ltd. did not supply the machinery

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## Parties

- **Judges:** Manorama…; Chockalingam…
- **Appellants:** M/s. Mewar…
- **Respondents:** M/s. R.K.…

## Timeline

- **2016-10-03 — Purchase Order by Mewar…**: Mewar Technocast Private Limited placed order…
- **2016-10-04 — Purchase Order by Mewar…**: Mewar Hi-Tech Engineering Limited placed order…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(20) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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