# In the matter of Shaifali Rolls Ltd. C.P. (I.B) No. 162-9-NCLT-AHM-2018

> NCLT judgment dated 2018-09-14. Citation: TCN-2018-NCLT-00753. M/s. SMC Industries Limited filed an application under Section 9 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 14 Sept 2018
- **Citation:** TCN-2018-NCLT-00753
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shaifali-rolls-ltd-cp-ib-no-162-9-nclt-ahm-2018-a95ef4b6

## Summary

### Background

M/s. SMC Industries Limited filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of corporate insolvency resolution process against M/s. Shaifali Rolls Private Ltd. The applicant claimed that they were engaged in the job of pulverizing coal and used to carry out job work for the respondent, raising invoices for the same. The applicant submitted that an amount of Rs. 4,08,000/- was due from the respondent towards different invoices raised from 12.05.2017 onwards.

## Facts

M/s. SMC Industries Limited (SMC) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) against M/s. Shaifali Rolls Private Ltd. (Shaifali Rolls). SMC claimed to be an operational creditor of Shaifali Rolls, stating that they provided job work services related to pulverizing coal and raised invoices for these services. SMC asserted that Shaifali Rolls owed them Rs. 4,08,000/- for invoices raised from May 12, 2017, onwards. Shaifali Rolls admitted to owing the amount but cited financial difficulties due to a fall in steel prices and low-cost Chinese products, proposing to pay Rs. 25,000/- per month without interest from October 1, 2018. SMC issued a demand notice on February 15, 2018, for the unpaid operational debt. The application was

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## Issues and analysis

### Issue 1: Whether the amount claimed by the Applicant from the Respondent is an operational debt within the …

**Ratio:** The amount due to the Applicant from the Respondent is in respect of supply of goods and

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**Reasoning:** The court reasoned that the debt arose from the supply of goods and provision of

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**Interpretation:** Section 5(21) defines 'operational debt' as a debt in respect of the provision

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**Application:** The court applied this interpretation to the facts of the case, noting that the

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## Parties

- **Judges:** Harihar Prakash…; Manorama…
- **Appellants:** SMC Industries…
- **Respondents:** Shaifali Rolls…
- **Advocates:** KUNALP VA…; Hiten P…

## Timeline

- **2017-05-12 — Invoices…**: Applicant started raising…
- **2018-02-15 — Demand Notice…**: Applicant issued a demand notice to the…

## 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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