Ranual Technology (P) Ltd. v. Calprin ADS (P) Ltd.

INSOLVENCY AND BANKRUPTCY CODE, 2016

--Initiation of corporate insolvency resolution process by operational creditor--Application filed against non-repayment of accommodation loanNon-supply of goods or rendering services to corporate debtor--Payment owed from corporate debtor not considered an operational debt--Where operational creditor filed an application under section 9 against corporate debtor on the ground that the corporate debtor had committed default in repayment of accommodation loan, but the operational creditor had neither supplied any goods nor had rendered any service to acquire status of an “operational creditor”, therefore, the payment owed from the corporate debtor would not be considered an operational debt, thus, the application was dismissed. --Director of corporate debtor requested to operational creditor to provide an accommodation loan, which was provided by the operational creditor. Operational creditor requested the corporate debtor to liquidate loan amount, but no payment was made by the corporate debtor. Therefore, the operational creditor filed an application under section 9 for initiation of corporate insolvency resolution process against corporate debtor. Held: Operational creditor had come out with a case that it had provided the accommodation loan to the corporate debtor, but the operational creditor was not a banking company or financial institution. It had no license to do the business of money lending. Further that, the operational creditor had neither supplied any goods nor had rendered any service to acquire the status of an “operational creditor”. Therefore, the payment owed from the corporate debtor would not be consi¬dered an operational debt and recovery of such amount towards loan account could not be redressed before this forum invoking provisions of section 9. Hence, the application was dismissed.

Insolvency and Bankruptcy Code, 2016 Section 9