2017 (12) TMI 1141 - Tri - Companies Law

Corporate insolvency process - petitioner owning the status of operational creditor - proof of eligible debt - Held that - On reading the definition of operational creditor as envisaged in section 5(20), it is evident that the operational debt directly owed to a person or the operational debt assigned or transferred to a person alone will become operational creditor, not others. It is not the case of the petitioner that any of the creditors assigned or transferred their claim to the petitioner, therefore it cannot claim to itself that it is an operational creditor entitled to make claim for the dues purportedly payable by Crystal were paid by it. As long as debt has not been assigned or transferred to a person, such person cannot be called itself as Operational Creditor by voluntarily making payment of somebody else. Since the right of payment has not been assigned or transferred to this person (Petitioner), this Bench cannot read payments made by this Petitioner would become claim claimable against Crystal by the petitioner owning the status of operational creditor. On reading the provisions of law of this Code in semblance with facts of this case, it is hereby held that the claim made by the petitioner is not a debt, much less an operational debt owed to the petitioner by corporate debtor for want of existence of jural relationship of corporate debtor and operational creditor between them under this Code, henceforth this Petition is hereby dismissed with liberty to the Petitioner to approach before appropriate Forum.

Issues:
1. Whether the claim made by the petitioner falls within the ambit of operational debt as pleaded by the petitioner or not.
2. Whether the petitioner can claim the dues as payable to the petitioner considering it as an operational creditor.

Analysis:
1. The petitioner filed a Company Petition under section 9 of the Insolvency & Bankruptcy Code, 2016 against the Corporate Person for failing to repay dues. The petitioner claimed that the debts payable by the Corporate Person to various entities were paid by the petitioner, entitling them to initiate the insolvency resolution process against the Corporate Person. The petitioner argued that the debts paid were towards assessment bills, water bills, and other charges owed by the Corporate Person to different entities.

2. The petitioner asserted that as they had paid the dues on behalf of the Corporate Person and demanded repayment, the Corporate Person failed to comply, leading to the filing of the winding-up petition. The Corporate Person contended that the claim was not an operational debt as defined under the Insolvency & Bankruptcy Code and sought dismissal of the case on this ground.

3. The Tribunal examined the definition of operational debt under section 5(21) of the Code, which includes debts for goods supplied, services rendered, or dues payable to governmental authorities. The petitioner claimed that the dues paid to the entities fell under the third category of dues payable to governmental authorities, making them eligible for recovery from the Corporate Person.

4. However, the Tribunal noted that the dues paid to Marol Co-operative Industrial Estate and Tata Power did not qualify as dues payable to governmental authorities. While the dues to the Municipal Corporation of Greater Mumbai fell within the third category, the petitioner had combined debts from different categories into one claim, affecting the characterization of the claim as solely payable to governmental authorities.

5. The Tribunal further analyzed the definition of an operational creditor under section 5(20) of the Code, emphasizing that operational debts must be directly owed to a person or assigned/transferred to them. Since the petitioner had not received an assignment or transfer of the debts from the creditors, they could not claim to be an operational creditor entitled to the dues paid on behalf of the Corporate Person.

6. Consequently, the Tribunal held that the claim made by the petitioner did not constitute a debt or an operational debt owed to them by the Corporate Person. Due to the absence of a legal relationship between the Corporate Person and the petitioner as an operational creditor, the Tribunal dismissed the petition, granting liberty to the petitioner to seek appropriate recourse in the future.

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