# In the matter of Shaila Hospitality Private Limited

> NCLT judgment dated 2024-04-03. Citation: TCN-2024-NCLT-01858. M/s. Shree Sai Decorators, the Operational Creditor (OC), filed an application under Section 9…

- **Court:** NCLT
- **Order date:** 3 Apr 2024
- **Citation:** TCN-2024-NCLT-01858
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shaila-hospitality-private-limited-14ddecd4

## Summary

### Background

M/s. Shree Sai Decorators, the Operational Creditor (OC), filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Shaila Hospitality Private Limited, the Corporate Debtor (CD), for initiating Corporate Insolvency Resolution Process (CIRP). The OC claimed that the CD defaulted on a payment of Rs. 1,00,00,000/- (One Crore Rupees) as of 30.08.2021. The OC and CD had entered into a Conducting Agreement dated 18.08.2017, where the OC was required to keep an interest-free security deposit of Rs. 1,10,00,000/- with the CD. The OC made payments totaling one crore rupees, and the balance of ten lakh rupees was agreed to be paid later. The OC vacated the premises on 30.08.2021, and the CD was required to refund the security deposit but failed to

…

## Facts

M/s. Shree Sai Decorators (Operational Creditor - OC) and Shaila Hospitality Private Limited (Corporate Debtor - CD) entered into a Conducting Agreement on 18.08.2017. As per the agreement, the OC was to provide an interest-free security deposit of Rs. 1,10,00,000/- to the CD. The OC paid Rs. 1,00,00,000/- to the CD in installments between 17.07.2017 and 16.08.2017. The balance of Rs. 10,00,000/- was to be paid later, but it was not. The OC vacated the premises on 30.08.2021 and handed over possession to the CD. The CD was required to refund the security deposit of Rs. 1,00,00,000/- to the OC upon vacating the premises. The CD failed to refund the security deposit. The OC issued a demand notice dated 28.01.2023 to the CD, which was received on 02.02.2023. The CD did

…

## Issues and analysis

### Issue 1: Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, is …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016, allows an operational creditor to

…

**Reasoning:** The court observed that the OC had established the existence of an operational debt, a

…

**Interpretation:** Section 9 provides the mechanism for operational creditors to trigger the CIRP

…

**Application:** The court applied Section 9 to the facts of the case, noting that the OC had

…

## Parties

- **Judges:** SHRI. K R SAJI…; Madhu S…
- **Appellants:** Shree Sai…
- **Respondents:** Shaila Hospitality…

## Timeline

- **2017-08-18 — Conducting Ag…**: Operational Creditor (OC) and Corporate Debtor…
- **2017-07-17 — Security Deposi…**: Operational Creditor (OC) started paying the security deposit to the Corporate Debtor…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shaila-hospitality-private-limited-14ddecd4