# In the matter of Stone India Ltd. CP (IB) No. 203-KB-2018

> NCLT judgment dated 2018-07-17. Citation: TCN-2018-NCLT-01132. Debashis Chakravarty, an operational creditor, filed an application under Section 9 of the…

- **Court:** NCLT
- **Order date:** 17 Jul 2018
- **Citation:** TCN-2018-NCLT-01132
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/stone-india-ltd-cp-ib-no-203-kb-2018-61050863

## Summary

### Background

Debashis Chakravarty, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate a corporate insolvency resolution process against Stone India Limited, the corporate debtor, due to unpaid salary arrears. Chakravarty, who served as Managing Director and CEO of Stone India Limited, resigned due to personal reasons but claimed that his salary from November 2016 onwards remained unpaid. The corporate debtor contested the application, alleging that the demand notice was invalid, liabilities increased due to the operational creditor's negligence, and an internal investigation revealed misconduct by the operational creditor.

## Facts

Debashis Chakravarty, the applicant, was employed as the Managing Director and CEO of Stone India Limited, the corporate debtor, effective from December 1, 2014. Due to personal reasons, Chakravarty resigned on May 11, 2017, and was relieved from his duties on July 10, 2017. Despite his resignation, his salary from November 2016 remained unpaid, leading him to issue a demand notice to the corporate debtor. The total dues claimed by Chakravarty amounted to Rs. 68,53,798 with 18% interest. The corporate debtor contested the application, alleging that the demand notice was invalid, liabilities increased due to the operational creditor's negligence, and an internal investigation revealed misconduct by the operational creditor, including demanding commissions from

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor under Section 9 of the Insolvency & …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016 allows an operational creditor to

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**Reasoning:** The court found that the applicant had successfully established that a debt exceeding Rs.

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**Interpretation:** Section 9 provides a mechanism for operational creditors to recover their dues

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**Application:** The court applied Section 9 to the facts of the case, finding that the

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## Parties

- **Judges:** Jinan…
- **Appellants:** Debashis Chakrabor…
- **Respondents:** Stone India…

## Timeline

- **2014-12-01 — Appointment of Debashis…**: Debashis Chakravarty was appointed as the Managing Director and CEO of Stone India…
- **2017-05-05 — Email regarding…**: Email from the applicant regarding…

## 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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