Whether funds infused as share capital or otherwise given as loan can be treated as Operational Debt for the purposes of pursuing an application under Section 9 of the Code – Gopakumar Puthan Kattoor Vs. Oil Tools International Services Pvt. Ltd. – NCLT Mumbai Bench
In this case, a CIRP application has been filed by invoking the provisions of Section 9 the Code. The Adjudicating Authority held that looking at the case from any angle i.e. either the money was given for allotment of shares or as loan, it would not be covered under the definition of operational debt in terms of Section 5(21). Therefore, in our considered view, no case is made out to initiate proceedings under Section 9 of the Code as the Petitioner has failed to prove that the nature of the debt claimed as an operational debt which is defined in terms of Section 5(21) of the Code as a claim in respect of the provision of goods or services including employment or a debt in respect of payment of dues arising under the law for the time being in force and payable to the Central Government, State Government or any local Authority.
