# In the matter of Sankalp Paper Industries Private Limited C.P. No. (IB) 606-9-NCLT-AHM-2018

> NCLT judgment dated 2019-12-16. Citation: TCN-2019-NCLT-00165. Radiance Corporation, an operational creditor, filed a petition under Section 9 of the…

- **Court:** NCLT
- **Order date:** 16 Dec 2019
- **Citation:** TCN-2019-NCLT-00165
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sankalp-paper-industries-private-limited-cp-no-ib-606-9-nclt-ahm-2018-84a9e76d

## Summary

### Background

Radiance Corporation, an operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Sankalp Papers Industries Pvt. Ltd, the corporate debtor, due to non-payment of a security deposit of Rs. 15,00,000. Radiance Corporation provided services as an indent agent for importing waste paper to Sankalp Papers Industries from Canada. A dispute arose regarding the quality of the imported goods and demurrage charges, leading to the corporate debtor withholding the security deposit.

## Facts

Radiance Corporation, a proprietorship firm, acted as an indent agent for Sankalp Papers Industries Pvt. Ltd, importing waste paper from Canada. A security deposit of Rs. 15,00,000 was provided by Radiance Corporation to Sankalp Papers Industries. The corporate debtor, Sankalp Papers Industries, withheld the security deposit, claiming that the goods were of sub-standard quality and that Radiance Corporation failed to prepare the documentation properly on time and because of that the respondent had to suffer huge demurrage charges. Radiance Corporation claimed the deposit was refundable upon completion of shipments. The corporate debtor admitted to the liability in its audited balance sheet for the period 2018-19. The corporate debtor claimed that representatives from

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## Issues and analysis

### Issue 1: Whether there is an "operational debt" as …

**Ratio:** The Insolvency and Bankruptcy Code, 2016 defines 'operational debt' as a claim in respect

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**Reasoning:** The court considered the documents and submissions to determine if the debt claimed by

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**Interpretation:** The term 'operational debt' is interpreted broadly to include debts arising

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**Application:** The court found that the debt claimed by Radiance Corporation, arising from

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## Parties

- **Judges:** Manorama…; Chockalingam…
- **Appellants:** Radiance Corporati…
- **Respondents:** Sankalp Papers…
- **Advocates:** Vijay B. Umbacleiz…; Khyati Pu…; +4 more

## Timeline

- **1996-05-17 — Incorporation of…**: Sankalp Papers Industries Pvt. Ltd. was…
- **2018-03-26 — Letter Agr…**: Letter dated 26.03.2018 signed by both parties agreeing to provide Rs. 15,00,000/- for…

## Legal provisions

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

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