# In the matter of Singhal Strips Ltd.

> NCLT judgment dated 2023-10-30. Citation: TCN-2023-NCLT-00985. M/s Jindal Stainless Ltd. filed a Company Petition under Section 9 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 30 Oct 2023
- **Citation:** TCN-2023-NCLT-00985
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/singhal-strips-ltd-9306862e

## Summary

### Background

M/s Jindal Stainless Ltd. filed a Company Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against M/s Singhal Strips Limited, seeking initiation of Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed a default of Rs. 1,08,26,175.63/-. The NCLT Delhi initially rejected the application due to a pre-existing dispute, but NCLAT overturned this decision. The Adjudicating Authority then revived the application.

## Facts

M/s Jindal Stainless Ltd. (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against M/s Singhal Strips Limited (Corporate Debtor) for initiation of CIRP due to unpaid operational debt. The Operational Creditor and Corporate Debtor had a business relationship since 2011, involving the supply of stainless steel and a job conversion agreement. The Operational Creditor claimed a default of Rs. 1,08,26,175.63/- based on seven unpaid invoices. A demand notice was issued on 22.05.2019. The Corporate Debtor claimed that five invoices were paid and adjusted via RTGS and debit notes, and that a counter claim of Rs. 1.20 Crores existed for job work done. The NCLT initially rejected the application due to a pre-existing

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## Issues and analysis

### Issue 1: Whether there is an ‘Operational Debt' exceeding Rs. …

**Ratio:** Section 5(21) of the Insolvency and Bankruptcy Code, 2016 defines ‘Operational Debt' as a

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**Reasoning:** The Adjudicating Authority analyzed the definition of 'Operational Debt' under Section

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**Interpretation:** The definition of 'Operational Debt' is interpreted broadly to include debts

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**Application:** The Adjudicating Authority found that the debt claimed by the Operational

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## Parties

- **Judges:** MAHENDRA KHANDELWA…; RAHUL BHA…
- **Appellants:** M/s Jindal…
- **Respondents:** M/s Singhal…

## Timeline

- **2019-05-22 — Demand N…**: Operational Creditor sent a Demand…
- **2019-06-03 — Reply to Deman…**: Corporate Debtor filed a…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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