# In the matter of S.K. Masala and Foods Ltd. C.P. No. (IB) 468-9-NCLT-AHM-2018

> NCLT judgment dated 2019-09-17. Citation: TCN-2019-NCLT-01415. The case involves an application filed by C. Girdharlal Gheewala, an operational creditor,…

- **Court:** NCLT
- **Order date:** 17 Sept 2019
- **Citation:** TCN-2019-NCLT-01415
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sk-masala-and-foods-ltd-cp-no-ib-468-9-nclt-ahm-2018-082e8d01

## Summary

### Background

The case involves an application filed by C. Girdharlal Gheewala, an operational creditor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, against S.K. Masala & Food Ltd., the corporate debtor. The operational creditor claimed an outstanding debt of Rs. 26,09,959/- for the supply of cashew kernels. The corporate debtor issued post-dated cheques, which were dishonored, and later deposited Rs. 25,000/-. A Memorandum of Understanding (MoU) was executed, but subsequent cheques were also dishonored. A notice was issued under section 138 (B) of the Negotiable Instruments Act, 1881.

## Facts

C. Girdharlal Gheewala, an operational creditor, filed an application against S.K. Masala & Food Ltd., the corporate debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016. The operational creditor claimed an outstanding debt of Rs. 26,09,959/- for supplying cashew kernels. The invoices were dated 19.09.2017. The corporate debtor issued post-dated cheques amounting to Rs. 26,09,959/-, which were dishonored, except for one cheque of Rs. 5,00,000/-. The corporate debtor deposited Rs. 25,000/-. A Memorandum of Understanding (MoU) was executed, but subsequent cheques were also dishonored. A notice was issued under section 138 (B) of the Negotiable Instruments Act, 1881. The respondent did not file any reply or raise any dispute regarding the operational

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## Issues and analysis

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

**Ratio:** Section 4 of the Insolvency and Bankruptcy Code defines the threshold for initiating the

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**Reasoning:** The adjudicating authority considered the documentary evidence and found that the

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**Interpretation:** The term 'operational debt' is interpreted as a debt in respect of the

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**Application:** In this case, the debt arose from the supply of cashew kernels, which

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## Parties

- **Judges:** Manorama…; Chockalingam…
- **Appellants:** C. Girdharlal…
- **Respondents:** S.K. Masala &…
- **Advocates:** Ishan…; Amrish G…

## Timeline

- **2017-09-19 — Invoices…**: Applicant supplied cashew kernels and issued two invoices both dated 19.09.2017 amounting…
- **2017-10-16 — Post-Dated Cheques…**: Corporate debtor issued post-dated cheques dated 16.10.2017, 17.10.2017, 18.10.2017,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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