# In the matter of RCI Industries & Technologies Limited

> NCLT judgment dated 2023-11-10. Citation: TCN-2023-NCLT-00775. The case involves an application (IA-1990/2023) filed by M/s. Mudraksh Investfin Private…

- **Court:** NCLT
- **Order date:** 10 Nov 2023
- **Citation:** TCN-2023-NCLT-00775
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/rci-industries-technologies-limited-5bac7728

## Summary

### Background

The case involves an application (IA-1990/2023) filed by M/s. Mudraksh Investfin Private Limited under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking reliefs related to their classification as an Operational Creditor. The Operational Creditor, M/s. Standard Chartered Bank Singapore (Limited), had initiated insolvency proceedings against the Corporate Debtor, M/s. RCI Industries and Technologies Limited, which were admitted on 25.11.2022. The applicant's grievance stems from being categorized as an Operational Creditor by the Resolution Professional, despite claiming to be an assignee of a Financial Debt. The applicant contends that the debt assigned to them by SBI Global Factors Limited and DBS Bank India Ltd should be considered a financial debt.

## Facts

M/s. Standard Chartered Bank Singapore (Limited) initiated insolvency proceedings against M/s. RCI Industries and Technologies Limited, which were admitted on 2022-11-25. M/s. Mudraksh Investfin Private Limited filed an application (IA-1990/2023) contesting their classification as an Operational Creditor. The applicant claims to be an assignee of a financial debt originally owed by the Corporate Debtor to SBI Global Factors Limited and DBS Bank India Ltd. These financiers had provided factoring services to the Corporate Debtor's suppliers through Mynd Solutions Pvt. Ltd. The Corporate Debtor purchased ferrous and non-ferrous products from BC Power Controls Ltd. The applicant submitted its claim in Form-C dated 2022-12-13. The Resolution Professional informed the

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## Issues and analysis

### Issue 1: Whether the debt assigned to the Applicant qualifies as a Financial Debt under Section 5(8) of the …

**Ratio:** The legal principle applied is the definition of 'financial debt' and 'operational debt'

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**Reasoning:** The court reasoned that the original liability arose in respect of an operational debt,

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**Interpretation:** The court interpreted that discounting the trade receivable of the supplier

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**Application:** The court applied the principle to the facts by stating that the assignment and

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## Parties

- **Judges:** BACHU VENKAT…; ATUL CHAT…
- **Appellants:** M/s. Mudraksh…
- **Respondents:** M/s. RCI INDUSTRIE…; Brijesh Singh…

## Timeline

- **2016-01-01 — Insolvency and…**: Insolvency and Bankruptcy…
- **2022-11-25 — Admission of Ap…**: Application filed by M/s. Standard Chartered Bank Singapore (Limited) against M/s. RCI…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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