# In the matter of Bhagalpur Electricity Distribution Company Private Limited C.P (IB) No. 1673-KB-2019

> NCLT judgment dated 2022-10-12. Citation: TCN-2022-NCLT-00764. The case involves an application under Section 9 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 12 Oct 2022
- **Citation:** TCN-2022-NCLT-00764
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bhagalpur-electricity-distribution-company-private-limited-cp-ib-no-1673-kb-2019-6ab38baa

## Summary

### Background

The case involves an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, filed by Hasibul Hossain, Sole Proprietor of The Imperial Electric Company Private Limited (Operational Creditor), against Bhagalpur Electricity Distribution Company Private Limited (Corporate Debtor) for initiation of Corporate Insolvency Resolution Process (CIRP) due to unpaid operational debt. The Operational Creditor claimed a default amount of Rs. 1,64,23,282.81 based on work orders for maintenance and operation of the distribution system. The Corporate Debtor admitted liability but contested the maintainability of the application, citing that a sole proprietorship does not fall under the definition of 'Operational Creditor'.

## Facts

Hasibul Hossain, operating as The Imperial Electric Company Private Limited, provided services to Bhagalpur Electricity Distribution Company Private Limited under various work orders related to the maintenance and operation of the electricity distribution system in Bhagalpur. The Corporate Debtor cancelled the work orders in 2017, citing the termination of its contract with its principal employer. The Operational Creditor raised invoices for the work done, and payments were made between November 2014 and March 2018. A Memorandum of Understanding (MoU) was executed on March 27, 2018, where the Corporate Debtor agreed to pay Rs. 65,00,000/- in two installments to settle the dues. The Corporate Debtor paid Rs. 40,00,000/- but failed to pay the remaining Rs. 25,00,000/-,

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## Issues and analysis

### Issue 1: Whether the application filed by a Sole Proprietorship Firm is maintainable under Section 9 of the …

**Ratio:** The Hon'ble NCLAT in Neeta Saha vs. Mr. Ram Niwas Gupta has held that “on construing of

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**Reasoning:** The NCLT relied on the NCLAT's decision, which clarified that a Sole Proprietorship Firm

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**Interpretation:** Section 2(f) and Section 3(23) of the IBC, when read together, include Sole

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**Application:** The NCLT applied the NCLAT's ruling to the present case, holding that the

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## Parties

- **Judges:** RohitKa…; Balraj…
- **Appellants:** Hasibul H…
- **Respondents:** Bhagalpur…

## Timeline

- **2014-08-12 — Work Order…**: Work Order No. BEDCPL/KOL/IEC/14-15/001 issued for Operation and Maintenance of…
- **2017-08-18 — Work Order…**: Work Order No. BEDCPL/KOL/IEC/17-18/KOL/W.O/OPEX/)11 issued for Operation and Maintenance…

## 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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