# In the matter of Contexus Resource Management Pvt. Ltd. CP (IB) No.29-ALD-2022

> NCLT judgment dated 2023-05-02. Citation: TCN-2023-NCLT-03494. The case involves an application filed under Section 9 of the Insolvency & Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 2 May 2023
- **Citation:** TCN-2023-NCLT-03494
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/contexus-resource-management-pvt-ltd-cp-ib-no29-ald-2022-1f17ac94

## Summary

### Background

The case involves an application filed under Section 9 of the Insolvency & Bankruptcy Code, 2016, by M/s Hi-Tech Steel Services Ltd. (Operational Creditor) against M/s Contexus Resource Management Pvt. Ltd. (Corporate Debtor) for initiating Corporate Insolvency Resolution Process (CIRP) due to a default in payment of $137,520 (INR Rs. 1,03,27,408.20 as on 24.12.2021). The Operational Creditor, based in the United Kingdom, claimed that the Corporate Debtor failed to supply steel coils after receiving an advance payment. The Corporate Debtor shared a Bill of Lading which turned out to be forged, leading to the termination of the contract by the Operational Creditor.

## Facts

M/s Hi-Tech Steel Services Ltd. (Operational Creditor), based in the United Kingdom, entered into a contract with M/s Contexus Resource Management Pvt. Ltd. (Corporate Debtor) for the purchase of 400 tones of steel coils for $458,400. The Operational Creditor paid 30% of the contract price, amounting to $137,520 (INR Rs. 1,03,27,408.20 as on 24.12.2021), as an advance payment on 06.05.2021. On 26.05.2021, the Corporate Debtor shared a Bill of Lading and requested the remaining payment. The Operational Creditor claimed that the Bill of Lading was forged, and the consignment could not be inspected. The Operational Creditor terminated the contract on 24.06.2021 and requested a refund of the advance payment. The Corporate Debtor did not respond. The Operational Creditor

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## Issues and analysis

### Issue 1: Whether the debt in question qualifies as an 'operational debt' under Section 5(21) of the …

**Ratio:** An advance payment made to a corporate debtor for the supply of goods or services, which

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**Reasoning:** The court relied on the Hon'ble Supreme Court's judgment, which stated that the phrase

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**Interpretation:** The term 'operational debt' is interpreted to include claims that have a nexus

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**Application:** In this case, the advance payment was made for the supply of steel coils. Since

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## Parties

- **Judges:** Praveen…; Ashish…
- **Appellants:** M/S HI-TECH STEEL…
- **Respondents:** M/S CONTEXUS…; Abhinav…

## Timeline

- **2021-05-06 — Advance P…**: Operational Creditor paid $137,520 as…
- **2021-05-26 — Bill of Ladin…**: Corporate Debtor shared a Bill of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(20) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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