# In the matter of National Commodities Management Services Limited CP (IB) No.1224-MB-IV-2022

> NCLT judgment dated 2023-07-04. Citation: TCN-2023-NCLT-02705. Flourish Capital and Management Consulting Private Limited, the Operational Creditor, filed a…

- **Court:** NCLT
- **Order date:** 4 Jul 2023
- **Citation:** TCN-2023-NCLT-02705
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/national-commodities-management-services-limited-cp-ib-no1224-mb-iv-2022-abc53c5c

## Summary

### Background

Flourish Capital and Management Consulting Private Limited, the Operational Creditor, filed a Company Petition under Section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC), seeking initiation of Corporate Insolvency Resolution Process (CIRP) against National Commodities Management Services Limited, the Corporate Debtor. The petition claimed an amount of Rs. 10,57,80,000/-, including an advance of Rs. 6,15,00,000/- and interest at 18% per annum from 21.05.2018 to 21.05.2022. The Operational Creditor stated that NCML KB Limited, a subsidiary of the Corporate Debtor, approached them to acquire land, and the Operational Creditor purchased the land on behalf of NCML KB Limited. An indemnity agreement was executed between NCML KB Limited and the Operational Creditor

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## Facts

Flourish Capital and Management Consulting Private Limited (Operational Creditor) filed a petition against National Commodities Management Services Limited (Corporate Debtor) under Section 9 of the IBC, 2016, seeking initiation of CIRP. The claim was for Rs. 10,57,80,000/-, including an advance of Rs. 6,15,00,000/- and interest. The Operational Creditor claimed that NCML KB Limited, a subsidiary of the Corporate Debtor, approached them to acquire land in Bihar. The Operational Creditor purchased the land on behalf of NCML KB Limited, and an indemnity agreement was executed between NCML KB Limited and the Operational Creditor on 18.07.2018. The Corporate Debtor acknowledged receiving advance payments on 26.07.2020. The Operational Creditor sent a demand notice on

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## Issues and analysis

### Issue 1: Whether the Operational Creditor has successfully demonstrated that the Corporate Debtor was under …

**Ratio:** The burden of proof lies on the Operational Creditor to establish that a debt exists and

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**Reasoning:** The NCLT found that the Operational Creditor failed to provide sufficient evidence to

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**Interpretation:** The legal principle is that the Operational Creditor must establish a clear

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**Application:** In this case, the NCLT applied the principle by examining the evidence

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## Parties

- **Judges:** Prabhat…; KISHORE VEMULAPALL…
- **Appellants:** Flourish Capital…
- **Respondents:** National Commoditi…

## Timeline

- **2018-07-18 — Indemnity Ag…**: Indemnity agreement executed between NCML KB…
- **2018-05-21 — Advance Payment Period…**: Start date for calculating…

## 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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