# In the matter of South Sea Distilleries and Breweries Pvt. Ltd.

> NCLT judgment dated 2024-02-07. Citation: TCN-2024-NCLT-02732. M/s. Kesar Tubes, an operational creditor, filed an application under Section 9 of the…

- **Court:** NCLT
- **Order date:** 7 Feb 2024
- **Citation:** TCN-2024-NCLT-02732
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/south-sea-distilleries-and-breweries-pvt-ltd-84694efc

## Summary

### Background

M/s. Kesar Tubes, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. South Sea Distilleries & Breweries Pvt. Ltd., the corporate debtor, for defaulting on a payment of ₹2,09,19,049/- as of 06.04.2020. The corporate debtor had placed a purchase order on 26.03.2022 for the supply of SS Steel Coil Grade 304. The petitioner claimed that despite raising an invoice for ₹3,23,37,007/-, only ₹1,14,17,958/- was paid, leaving an outstanding balance. The corporate debtor contested the claim, stating that it had made full payment for the goods actually supplied and that the petitioner was demanding payment based on a purchase order

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## Facts

M/s. Kesar Tubes (Operational Creditor/Petitioner) filed an application under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. South Sea Distilleries & Breweries Pvt. Ltd. (Corporate Debtor) for a default of ₹2,09,19,049/- as of 06.04.2020. The Corporate Debtor placed a purchase order on 26.03.2022 for SS Steel Coil Grade 304. The Petitioner claimed an amount of ₹3,23,37,007/- was due, but only ₹1,14,17,958/- was paid. The Corporate Debtor contended that it had paid for all goods supplied and the claim was based on a purchase order for which no supplies were made. The Petitioner issued invoices 2114 and 2115 dated 06.04.2022, totaling ₹1,14,17,958/-, which the Corporate Debtor paid

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## Issues and analysis

### Issue 1: Whether the Petitioner, M/s. Kesar Tubes, has established a valid operational debt against the …

**Ratio:** An operational debt arises from the provision of goods or services. The operational

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**Reasoning:** The Tribunal observed that the Petitioner failed to demonstrate any claim for goods

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**Interpretation:** Section 5(20) of the IBC defines an 'operational creditor' as a person to whom

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**Application:** In this case, the Petitioner's claim was based on a purchase order for which

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## Parties

- **Judges:** Charanjeet Singh…; LAKSHMI G…
- **Appellants:** M/s. Kesar…
- **Respondents:** M/s. South Sea…

## Timeline

- **2020-04-06 — Date of D…**: Alleged date of default of…
- **2022-03-26 — Purchase Ord…**: Corporate Debtor placed purchase order on the Petitioner for supply of SS Steel Coil…

## 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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