Technical Guidance Agreement Sufficient to Establish Operational Debt Without Invoices: NCLAT

Lyka Labs Ltd. Vs Modi Lifecare Industries Ltd. (NCLAT Delhi) The NCLAT Delhi allowed the appeal filed by Lyka Labs Ltd. against rejection of its Section 9 insolvency application and held that invoices were not mandatory for establishing operational debt under the Technical Guidance Agreement (TG Agreement). The dispute arose from a TG Agreement dated 14.09.2012 between Lyka Labs Ltd. and Modi Lifecare Industries Ltd. Under the agreement, Modi Lifecare was required to pay minimum royalty fees or 5% of total sales value, whichever was higher, for specified periods. Due to financial difficulties...