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Profit-Sharing Disputes Not Operational Debt Under IBC: NCLAT Delhi

Case Law Details

TaxGuru Citation
2025 taxguru.in 1528
Case Name
Prashanth Shekara Shetty Vs Alcuris Healthcare Private Limited (NCLAT Delhi)
Date of Judgement/Order
Only available for paid members
Courts
Delhi NCLAT, NCLAT
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Prashanth Shekara Shetty Vs Alcuris Healthcare Private Limited (NCLAT Delhi)

National Company Law Appellate Tribunal (NCLAT), Delhi, has set aside the initiation of Corporate Insolvency Resolution Process (CIRP) against Alcuris Healthcare Pvt. Ltd. The case arose from a dispute between Alcuris Healthcare and ABMAY Health Ventures LLP, which had entered into a joint venture agreement for operating a cardiology unit. The National Company Law Tribunal (NCLT) Mumbai had earlier admitted a Section 9 application under the Insolvency and Bankruptcy Code (IBC) filed by Alcuris Healthcare, treating the outstanding dues as operational debt. However, the NCLAT ruled that the agreement reflected a profit-sharing arrangement rather than a service-provider relationship, making it ineligible for CIRP under IBC.

The case revolved around the nature of the contractual relationship between the two parties. The appellant argued that the agreement clearly described both parties as “general profit-sharing partners,” and their collaboration involved joint control, shared responsibilities, and collective decision-making over the heart center’s operations. The tribunal noted that the existence of shared profits and losses indicated a partnership rather than a debtor-creditor relationship. Additionally, disputes had arisen over profit-sharing calculations, operational issues, and tax deductions, further complicating the claim that the amount due constituted operational debt.

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Author Info

CA Sandeep Kanoi
Qualification: CA in Job / Business
Company: Taxguru Consultancy
Location: Mumbai, Maharashtra
Articles Published: 21,137

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