# In the matter of Tathya Engineering & Infraproject Private Limited CP (IB) 1630-MB-2017

> NCLT judgment dated 2018-11-16. Citation: TCN-2018-NCLT-00322. The case involves an application under Section 9 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 16 Nov 2018
- **Citation:** TCN-2018-NCLT-00322
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/tathya-engineering-infraproject-private-limited-cp-ib-1630-mb-2017-5f53cfbb

## Summary

### Background

The case involves an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, by M/s. Narsinha Engineering Private Limited (Operational Creditor) against M/s. Tathya Engineering & Infraproject Private Limited (Corporate Debtor). The Operational Creditor supplied loose parts of Ghati Sheds to the Corporate Debtor based on oral orders. The Corporate Debtor failed to make full payment for the supplied goods, leading to a default. The Operational Creditor initially filed a Summary Suit which was decreed in their favor, but the Debtor still failed to honor the decree. Subsequently, the Operational Creditor issued a demand notice under the Companies Act, 1956, and later a demand notice under Section 8 of the Insolvency and Bankruptcy Code.

## Facts

M/s. Narsinha Engineering Private Limited (Operational Creditor) supplied loose parts of Ghati Sheds to M/s. Tathya Engineering & Infraproject Private Limited (Corporate Debtor) based on oral orders. The Operational Creditor raised invoices totaling ₹ 1,15,32,808/- for the supplies. The Corporate Debtor made part-payments amounting to ₹ 94,20,227/-, leaving an outstanding principal amount of ₹ 21,12,581/- excluding interest. The Debtor issued three cheques, one for ₹ 20,00,000/- dated 2009-07-24 and two for ₹ 15,00,000/- each dated 2010-08-05, which were dishonored. The Operational Creditor filed a Summary Suit (no. 41/2012) with the Jt. CJSD, Nashik, Maharashtra, which was decreed in their favor on 2012-09-04, ordering the Debtor to pay ₹ 33,64,395/-. The Debtor

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## Issues and analysis

### Issue 1: Whether the Operational Creditor has established the existence of an operational debt as defined …

**Ratio:** Section 5(21) of the Insolvency and Bankruptcy Code defines 'operational debt' as a claim

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**Reasoning:** The court noted that the Operational Creditor had supplied goods to the Corporate Debtor,

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**Interpretation:** The interpretation of Section 5(21) is that any debt arising from the supply of

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**Application:** In this case, the Operational Creditor supplied 'loose parts of Ghati Sheds' to

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## Parties

- **Judges:** M.K. Sh…
- **Appellants:** M/s. Narsinha…
- **Respondents:** M/s. Tathya…

## Timeline

- **2009-07-24 — Cheque I…**: The Debtor issued a…
- **2010-08-05 — Cheques I…**: The Debtor issued two…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(21) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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