# In the matter of Sesa International Limited C.P. (IB) No. 1741-KB-2019

> NCLT judgment dated 2023-01-03. Citation: TCN-2023-NCLT-05209. Matashree Mercantile Private Limited filed a Company Petition under Section 9 of the Insolvency…

- **Court:** NCLT
- **Order date:** 3 Jan 2023
- **Citation:** TCN-2023-NCLT-05209
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sesa-international-limited-cp-ib-no-1741-kb-2019-db51e84c

## Summary

### Background

Matashree Mercantile Private Limited filed a Company Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Sesa International Limited, seeking initiation of Corporate Insolvency Resolution Process (CIRP). The operational creditor claimed a default of Rs. 17,73,04,657.53 plus interest, arising from a contract for the supply of iron ore fines. The corporate debtor allegedly failed to supply the materials despite receiving an advance payment of Rs. 15,00,00,000. The operational creditor contended that the corporate debtor requested termination of the contract due to a shortage of supply, and subsequently failed to refund the advance amount.

## Facts

Matashree Mercantile Private Limited (Operational Creditor) filed a petition against Sesa International Limited (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Operational Creditor and Corporate Debtor entered into a sale contract on February 22, 2019, for the purchase of 1,00,000 MT of Iron Ore Fines. The Operational Creditor made an advance payment of Rs. 15,00,00,000 in two tranches: Rs. 10,00,00,000 on February 25, 2019, and Rs. 5,00,00,000 on March 6, 2019. The contract stipulated that the Corporate Debtor should aim to supply the materials within three months of the advance payment date, with a final delivery deadline of six months from the receipt of the full advance. The Operational Creditor claimed that the Corporate Debtor

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## Issues and analysis

### Issue 1: Whether the advance payment by the Operational Creditor to the corporate debtor for supply of goods …

**Ratio:** The Hon'ble Supreme Court in M/s Consolidated Construction Consortium Limited v. M/s

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**Reasoning:** The court referred to the Supreme Court's judgment to establish that a demand notice can

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**Interpretation:** The interpretation of 'operational debt' is broad enough to include all forms

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**Application:** The court applied the Supreme Court's ruling to the present case, acknowledging

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## Parties

- **Judges:** RohitKa…; Balraj…
- **Appellants:** Matashree…
- **Respondents:** Sesa International…
- **Advocates:** Ranit…; Namrata…; +5 more

## Timeline

- **2019-02-22 — Sale Con…**: Sale contract entered into between Matashree Mercantile Private Limited and Sesa…
- **2019-02-25 — Advance Payment…**: Matashree Mercantile Private Limited made an advance payment of Rs. 10,00,00,000 to Sesa…

## 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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