# In the matter of Chiral Bio Sciences Ltd. CP(IB) No. 239-9-HDB-2017

> NCLT judgment dated 2022-02-15. Citation: TCN-2022-NCLT-04144. Mylan Laboratories Ltd, the operational creditor, filed a petition under Section 9 of the…

- **Court:** NCLT
- **Order date:** 15 Feb 2022
- **Citation:** TCN-2022-NCLT-04144
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/chiral-bio-sciences-ltd-cpib-no-239-9-hdb-2017-a6d55b28

## Summary

### Background

Mylan Laboratories Ltd, the operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Chiral Bio Sciences Ltd, the corporate debtor, for failing to discharge a debt of Rs. 2,06,40,794.07. This amount included a principal of Rs. 1,15,77,479.07 and interest at 18% p.a. from 14.10.2012 until the filing date of 15.05.2017, after deducting a part payment of Rs. 5,00,000 made on 27.03.2015. The debt arose from a purchase order placed by Chiral Bio Sciences for 5612 kgs of 4-CHLORO-2-TRIFLLORO ACETYL ANILINE HCL Hydrate on 28.07.2012, later amended on 02.08.2012. Despite supplying the material, Mylan Laboratories was not paid. The corporate debtor admitted its liability in a letter dated 23.04.2013 but failed to pay. A

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## Facts

Mylan Laboratories Ltd. (Operational Creditor) supplied 5612 kgs of 4-CHLORO-2-TRIFLLORO ACETYL ANILINE HCL Hydrate to Chiral Bio Sciences Ltd. (Corporate Debtor) based on a purchase order dated 28.07.2012, amended on 02.08.2012. Invoice No.7512101241, dated 14.08.2012, was raised for Rs.1,15,77,479.07, payable within 60 days (by 13.10.2012). The Corporate Debtor failed to pay. On 23.04.2013, the Corporate Debtor admitted the debt but cited inability to pay. A statutory notice was issued under Sections 433 & 434 of the Companies Act, 1956. The Corporate Debtor, in a letter dated 23.10.2013, admitted liability and inability to pay. A Company Petition C.P.No.216 of 2014 was filed in the High Court, admitted on 20.11.2014, but later withdrawn. The Corporate Debtor

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## Issues and analysis

### Issue 1: Whether an operational debt exists as defined …

**Ratio:** An operational debt is defined under Section 5(21) of the IBC as a claim in respect of

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**Reasoning:** The court examined the purchase order, invoices, and delivery documents to establish that

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**Interpretation:** The court interpreted the definition of 'operational debt' broadly to include

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**Application:** In this case, the court found that the supply of 4-CHLORO-2-TRIFLLORO ACETYL

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. VEERA BRAHMA…
- **Appellants:** Mylan Laboratories…
- **Respondents:** Chiral Bio…

## Timeline

- **2012-07-28 — Purchase…**: Chiral Bio Sciences placed a purchase order for 5612 kgs of 4-CHLORO-2-TRIFLLORO ACETYL…
- **2012-08-02 — Amended Purcha…**: The purchase order was subsequently…

## 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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