Good afternoon! The counsel seeks permission to address the bench as your honour.

Much Obliged.

Your Honour, My name is Ashhab Khan and I am the counsel 1 on behalf of applicant Lilip
Thomas in the case of Lilip Thomas v. State Bank of Malta and Ors. I will be addressing issues 1
and 4 and subsequently my counsel Ms. Namrata Gandhi will be addressing issue 2 and 3.
Therefore I request the court to take arguments accordingly.

If your honour is well versed with the facts of the case, I seek permission to move with my first
submission.

(Brief Facts: Ted airways is an aviation company owned by Mr. Lilip Thomas in Malta. It
entered into CLA with SBM and Shawn and Mac enterprises. In 2008 ted aiways went into loss
due to merger with ting tisher airlines. SBM and other creditors without complying with the
arbitration clause in the CLA filed application under S. 7 & 9 IBC wherein SBM is claiming
1000cr of loss of business revenue and 400cr of operational debt.)

Much Obliged.

Your my first submission is regarding the maintainability of the instant SLP. It is humbly
submitted that the court may admit the SLP as there exists extraordinary circumstances and
substantial question of law in the instant case.

Article 136 of the constitution may be invoked when there exist exceptional circumstances.

In the present case, Malta is considered to be a tourist country and the aviation industry plays an
important role in the economy of the country due to its linkage with the tourism sector. It
contended that there exist exceptional circumstances in the instant case and initiating a CIRP
against TED Airways serves more harm than good since, admission of resolution proceedings
and the consequent list of liquidation may severely hamper prospects of economic growth.
The NCLT order causes not just an infirmity in the corporate crisis of the company in the instant
case but may cause a macroeconomic disorder. The SC in UOI v. Swadeshi Cotton Mills
intervened and admitted the SLP considering effect of the company on the economic process of
the country. Also, this is a unique circumstance, wherein a creditor has burdened an
economically ailing entity with illegitimate claims depicting the mala fide intent to gain control
of the company as opposed to resolution/restructuring of debt.

Now coming second limb of the issue. It is submitted before the honourable court that there
exists substantial question of law in the instant case. In Chunilal Mehta & Sons, ltd v. Century
Spinning &Manufacturing Co, ltd, the Apex Court observed that the proper test for determining
whether a substantial question of law is involved is whether it is of general public importance or
directly affects rights of the parties or is unsettled in the sense of the fact that courts hold
alternative views. NCLT Del- Dinesh Chand Jain v Fantastic Builddon- arbitration clause
doesn’t has effect on the application filed under and Delhi HC- Kadimi International v. Emaar
Mgf Land ltd-arbitration has effect on the application filed and should be considered before
filing the application so it is apparent that this issue is unsettle as there are alternative views of
the NCLT and HC on it. The NCLT failed to appreciate the existence of arb clause in the CLA
which affects the principle of party autonomy and contractual rights of the party. It is contended
that this matter poses a crucial question in the insolvency landscape viz. treatment of contractual
rights vis-à-vis statutory right under section 7 of the IBC. Furthermore, whether loss business
revenue can be claimed as financial debt offers a substantial question of law likely to affect
business and insolvency transactions across the country and hence, deserves consideration by
this Hon’ble Court.

Now if your honour doesn’t have any further question I would like to move to the next issue
which is issue 4 concerning the claim of operational debt by the Respondent.

Operational Debt
It is humbly contended before the honble court that the application filed by Respondent 1,
claiming operational debt should be dismissed as there exists a dispute of the amount of debt.
The petitioner doesn’t share consensus over the amount claimed i.e. 400(OD). My contention is
divided into 2 parts, the first concerning the 400 cr of operational debt claimed and next
regarding the dismissal of this application due to existence of dispute over the amount of debt
claimed.

#1

Operation creditor is defined as any person to whom operational debt is owed, legally assigned
or transferred under section 5(20) of IBC and Operational debt under section 5(21) IBC is a debt
wrt goods and servicers including employment or dues to be paid to central or state government.
It is contended that respondent 1 doesn’t cannot be claim operational debt as it is not an
operational creditor under IBC.
In Vinod Awasthy v. AMR Infrastructure Limited, NCLT, Principal Bench, New Delhi while
dismissing the Petition observed that the framers of the IBC had not intended to include within
the expression of an ‘operation debt’ a debt other than a financial debt. Therefore, an operational
debt would be confined only to four categories as specified in Section 5(21) of the IBC like
goods, services, employment and government dues.
In Apex Court judgement, Raghunath Rai Bareja v. Punjab National Bank held that the literal
construction of a statute is the only mode of interpretation when the statute is clear and
unambiguous. Hence in order to fall within the four corners of “operational creditor” as per
section 9 of the IBC it must be shown that operational creditor is a person to whom an
“operational debt” is owned or it is legally assigned/transferred.
It is finally submitted that, in the light of above submissions Respondent 1 cannot be categorized
as an “operational creditor” and the claim of Rs.400 crores cannot come under definition of
“operational debt” under IBC making the claim invalid and it should be dismissed.
#2

It contended before the court that the existence of dispute calls for dismissal of the application
claiming operational debt.
Dispute is defined under S.5(6) of IBC which includeds dispute over the amount of debt.
In Mobilox Innovative Private Limited V. Kirusa Software Private Limited, the court while
interpreting the term ‘dispute’ held that definition of ‘dispute’ is ‘inclusive’ and not ‘exhaustive’
and it has to be given wide meaning provided it is relatable to definition under Section 5(6) of
IBC. In the case of K. Kishan vs. M/s. Vijay Nirman Company Pvt. Ltd. where Hon'ble Supreme
Court has observed that and I quote "Even if it be clear that there be a record of an operational
debt, it is important that the said debt be not disputed. If disputed within the parameters laid
down in Mobilox Innovations, an insolvency petition cannot be proceeded with further."

It is further submitted that NCLT Delhi, in the case of Jetsetgo Aviation Services Pvt. Ltd. v.
Ligare Aviation held that: “it is always open to the 'Corporate Debtor' to take the plea of
'existence of dispute' before the Adjudicating Authority, which alone can be a ground to reject
the application filed under Section 9 of the Code.”

It is most respectfully submitted that in the light of above submissions, the application filed by
Respondent 1 should be dismissed for the ‘existence of dispute’ over the amount of debt claimed
by the creditor i.e. Rs.400 crores of operational debt claimed.

If your honour doesn’t have any question I would like to conclude my submissions.