# In the matter of Oriflame India Private Limited

> NCLT judgment dated 2024-04-30. Citation: TCN-2024-NCLT-01516. Mack Star Marketing Private Ltd. filed an application under Section 9 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 30 Apr 2024
- **Citation:** TCN-2024-NCLT-01516
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/oriflame-india-private-limited-1a0f94cc

## Summary

### Background

Mack Star Marketing Private Ltd. filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Oriflame India Private Limited, citing a default in payment of Rs. 1,52,55,394/- related to a leave and license agreement. Oriflame disputed the claim, stating that there were existing disputes regarding the license fee and that they were subject to an interpleader suit before the Bombay High Court. The NCLT considered the submissions of both parties, including procedural defects raised by Oriflame and the conflicting demands for payment from Mack Star, Suraksha ARC, and the Income Tax Department.

## Facts

Mack Star Marketing Private Ltd. (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Oriflame India Private Limited (Corporate Debtor) for an alleged default of Rs. 1,52,55,394/-. The debt pertained to a leave and license agreement where Mack Star permitted Oriflame to use office space in Andheri East. A leave and license agreement was executed on 31.01.2011, and a subsequent agreement on 12.01.2018 reduced the monthly fee to Rs. 11,75,300. Mack Star instructed Oriflame on 28.02.2019 to deposit payments into a specified ICICI bank account. Oriflame was depositing the license fee in the Yes Bank account as designated by Applicant Mack Star. Oriflame

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## Issues and analysis

### Issue 1: Whether the claim of the Applicant qualifies as an 'Operational Debt' as defined in Section 5(21) …

**Ratio:** The NCLAT in the case of Jaipur Trade Expocentre Private Limited (Company Appeal

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**Reasoning:** The tribunal relied on the NCLAT's decision in Jaipur Trade Expocentre Private Limited,

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**Interpretation:** Section 5(21) of the IBC defines 'operational debt'. The interpretation

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**Application:** Applying the ratio to the present case, the NCLT rejected the Corporate

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## Parties

- **Judges:** Ramalingam…; AVINASH K.…
- **Appellants:** Mack Star…
- **Respondents:** Oriflame India…

## Timeline

- **2011-01-31 — Leave and License…**: Applicant and Corporate Debtor entered into a leave and license agreement and an…
- **2018-01-12 — Subsequent Ag…**: Applicant and Corporate Debtor executed a subsequent agreement reducing the monthly fee…

## 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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