# In the matter of APL Metals Limited

> NCLT judgment dated 2024-01-09. Citation: TCN-2024-NCLT-03236. Sri Jaiprakash Jaiswal, the Sole Proprietor of OM Traders, filed an application under Section 9…

- **Court:** NCLT
- **Order date:** 9 Jan 2024
- **Citation:** TCN-2024-NCLT-03236
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/apl-metals-limited-f3dc242c

## Summary

### Background

Sri Jaiprakash Jaiswal, the Sole Proprietor of OM Traders, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against APL Metals Limited, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed a default of Rs. 2,14,99,995.73, including principal and interest. The Corporate Debtor contested the application, citing an ongoing Income Tax Department investigation that raised concerns about bogus purchases by the Operational Creditor.

## Facts

Sri Jaiprakash Jaiswal, the Sole Proprietor of OM Traders (Operational Creditor), filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against APL Metals Limited (Corporate Debtor). The Operational Creditor claimed a default of Rs. 2,14,99,995.73, including a principal amount of Rs. 2,08,62,129 and interest calculated at 18% per annum, amounting to Rs. 6,37,866.73 as of 28.02.2022. The default allegedly occurred between 24.11.2021 and 24.12.2021, based on invoices raised by the Corporate Debtor. A demand notice dated 01.03.2022 was served on the Corporate Debtor on 02.03.2022, but no reply was received. The Corporate Debtor argued that the Operational Creditor and its group entities were under investigation by the Income Tax Department for

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## Issues and analysis

### Issue 1: Whether the claim of the Operational Creditor can be considered a valid operational debt for the …

**Ratio:** The existence of a genuine dispute regarding the debt precludes the initiation of CIRP

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**Reasoning:** The NCLT reasoned that the Income Tax Department's findings of bogus purchases raised a

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**Interpretation:** The court interpreted the term 'dispute' under the I&B Code to include

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**Application:** The court applied the ratio to the facts of the case, noting that the Income

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## Parties

- **Judges:** BIDISHA BA…; D. Ar…
- **Appellants:** Jaiprakash…
- **Respondents:** APL Metals…
- **Advocates:** Shaunak…; Kanishk Ke…; +7 more

## Timeline

- **2021-11-01 — Corporate Debtor…**: The Corporate Debtor approached the…
- **2021-11-23 — Purchase Order…**: Corporate Debtor placed purchase orders…

## 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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