# In the matter of Dutt Capital Advisors Pvt. Ltd.

> NCLT judgment dated 2023-07-18. Citation: TCN-2023-NCLT-02472. The case involves a petition filed by Ashu Dutt, an Operational Creditor, under Section 9 of…

- **Court:** NCLT
- **Order date:** 18 Jul 2023
- **Citation:** TCN-2023-NCLT-02472
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/dutt-capital-advisors-pvt-ltd-5dc49f4e

## Summary

### Background

The case involves a petition filed by Ashu Dutt, an Operational Creditor, under Section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC), seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Dutt Capital Advisors Private Limited, the Corporate Debtor. The Operational Creditor claimed a default amount of Rs. 39,72,39,391/-. The Corporate Debtor was allegedly unable to pay compensation to the Applicant, leading to the execution of Secured Debt Agreements dated 30.09.2014 for payment of Rs.13.5 Crores. The amount was due on 01.12.2015 with an interest of 18% for any delay. The Applicant claimed that the Corporate Debtor failed to repay the outstanding amounts, leading to the filing of the application under Section 9 of the IBC.

## Facts

Ashu Dutt, an Operational Creditor, filed a petition under Section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC), seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Dutt Capital Advisors Private Limited, the Corporate Debtor. The claim was for Rs. 39,72,39,391/- in default, comprising principal and interest. The Corporate Debtor was engaged in advisory/consulting services. Secured Debt Agreements dated 30.09.2014 were executed for payment of Rs.13.5 Crores, due on 01.12.2015, with 18% interest for delay. The Corporate Debtor failed to pay, leading to the application. The agreement dated 30.09.2014 discharged the Corporate Debtor from the Operational debt by acknowledgement of liability of secured loan, which is a financial debt. There

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## Issues and analysis

### Issue 1: Whether the application filed under Section 9 of the IBC is maintainable when the Operational Debt …

**Ratio:** An application under Section 9 of the Code can be filed by an Operational Creditor to

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**Reasoning:** The court reasoned that the agreement dated 30.09.2014 discharged the Corporate Debtor

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**Interpretation:** The interpretation is that once an operational debt is converted into a secured

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**Application:** In this case, the agreement dated 30.09.2014 converted the operational debt

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## Parties

- **Judges:** Prabhat…; KISHORE VEMULAPALL…
- **Appellants:** Ashu…
- **Respondents:** Dutt Capital…; Dutt Capital…

## Timeline

- **2019-10-31 — Company Petiti…**: The Company Petition is filed on 31.10.2019 claiming an amount of Rs.39,72,39,391/- in…
- **2014-09-30 — Secured Debt A…**: The Applicant had executed Secured Debt Agreements dated 30.09.2014 with Corporation…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 242 — Power to remove difficulties](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-242)

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