# In the matter of MPS Car Care and Services Private Limited C.P. No. 2480-IBC-MB-2018

> NCLT judgment dated 2023-04-11. Citation: TCN-2023-NCLT-03870. The case involves a petition filed by 3M India Limited, the Operational Creditor, under Section…

- **Court:** NCLT
- **Order date:** 11 Apr 2023
- **Citation:** TCN-2023-NCLT-03870
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/mps-car-care-and-services-private-limited-cp-no-2480-ibc-mb-2018-9fa8ccab

## Summary

### Background

The case involves a petition filed by 3M India Limited, the Operational Creditor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against MPS Car Care & Services Private Limited, the Corporate Debtor, for defaulting on a payment of Rs. 1,44,23,432.48. The Corporate Debtor opposed the admission of the petition, claiming a dispute existed because the Operational Creditor allegedly failed to remit VAT payments to the department and that the Corporate Debtor had made payments of Rs. 21,00,000/- despite the defaults committed by the Operational Creditor. The Operational Creditor contended that a demand notice was issued to the Corporate Debtor, which went unanswered.

## Facts

3M India Limited, the Operational Creditor, filed a company petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against MPS Car Care & Services Private Limited, the Corporate Debtor. The petition was based on the Corporate Debtor's failure to pay an outstanding amount of Rs. 1,44,23,432.48. The Corporate Debtor filed an affidavit in reply, claiming that a dispute existed because the Operational Creditor had failed to remit VAT payments to the department. The Corporate Debtor also claimed to have made payments of Rs. 21,00,000/- despite the Operational Creditor's defaults. The Operational Creditor pointed out that the Corporate Debtor had admitted to the invoices and the default in their

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a default in making payment of the operational debt to the …

**Ratio:** The Insolvency and Bankruptcy Code, 2016, defines 'default' as non-payment of debt when

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**Reasoning:** The NCLT was convinced that there was an 'Operational debt' due and payable by the

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**Interpretation:** The court interpreted the definition of 'default' under the IBC to include the

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**Application:** The court applied the definition of 'default' to the facts of the case and

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## Parties

- **Judges:** H.V. Subb…; Madhu S…
- **Appellants:** 3M Indi…
- **Respondents:** MPS Car Care &…; MPS Car Care &…

## Timeline

- **2017-10-03 — Demand N…**: Operational Creditor issued a Demand…
- **2018-06-28 — Filing of Company…**: The company petition was filed…

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