# In the matter of PJM Minerals and Industries Private Limited IA 458-2021 in CP (IB) No. 976-MB-IV-2020

> NCLT judgment dated 2023-04-28. Citation: TCN-2023-NCLT-03578. AMC Chemicals Private Limited, the Operational Creditor/Applicant, filed an application under…

- **Court:** NCLT
- **Order date:** 28 Apr 2023
- **Citation:** TCN-2023-NCLT-03578
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/pjm-minerals-and-industries-private-limited-ia-458-2021-in-cp-ib-no-976-mb-iv-20-d80113ed

## Summary

### Background

AMC Chemicals Private Limited, the Operational Creditor/Applicant, filed an application under Section 9 of the Insolvency & Bankruptcy Code, 2016 (I&B Code) against PJM Minerals and Industries Private Limited, the Corporate Debtor, for initiating the Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed that the Corporate Debtor failed to supply the remaining raw materials after receiving advance payments, leading to an outstanding debt of Rs. 1,78,51,034/-. The Corporate Debtor argued that the application was not maintainable as it was for the recovery of advance money and not an operational debt, and that they continued to supply goods even after the alleged default date.

## Facts

AMC Chemicals Private Limited (Operational Creditor) filed an application under Section 9 of the I&B Code against PJM Minerals and Industries Private Limited (Corporate Debtor) for initiating CIRP. The Operational Creditor claimed an outstanding debt of Rs. 1,78,51,034/- for the non-supply of Manganese Oxide Powder after receiving advance payments. The Corporate Debtor argued that the application was for recovery of advance money, not an operational debt, and that they continued supplying goods even after the alleged default date of 15.02.2020 until 01.03.2020. The Operational Creditor issued a demand notice on 29.07.2020. The Corporate Debtor claimed the demand notice was wrongfully issued. The Operational Creditor filed the application on 11.08.2020, before the

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## Issues and analysis

### Issue 1: Whether an advance amount paid for the supply of goods can be considered an operational debt under …

**Ratio:** The Hon'ble Supreme Court in Consolidated Construction Consortium Ltd. v. Hitro Energy

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**Reasoning:** The court relied on the precedent set by the Supreme Court, which clarified that advance

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**Interpretation:** This interpretation clarifies that advance payments made for the supply of

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**Application:** In this case, the advance payment made by the Operational Creditor to the

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## Parties

- **Judges:** Prabhat…; KISHORE VEMULAPALL…
- **Appellants:** AMC Chemicals…
- **Respondents:** PJM Minerals and…

## Timeline

- **2020-07-23 — Board Reso…**: The Operational Creditor filed a Board Resolution in support of authorization in favor of…
- **2020-07-29 — Demand N…**: The Operational Creditor issued a Demand Notice in terms of Section 8 of the Insolvency…

## 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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