2020 (10) TMI 389 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Debt or not - courier service agreement for delivery service - existence of debt and dispute or not - HELD THAT - The operational debt means a claim, in respect of the provision of goods or services including employment or a debt in respect of the payment of dues arising under any law for the time being enforce and payable to the Central Government, any State Government or any Local Authority and debt as a defined under Section 3(11) means a liability or obligation in respect of a claim which is due from any person and includes a financial debt or the operational debt and the claim is defined under Section 3(6) which shows that it means a right to payment whether or not such right is reduced to judgment fix, disputed, undisputed, legal, equitable, secured or unsecured or right to remedy for breach of contract under any law for the time being enforce, If such breach give rise to right to payment - in the case in hand, the applicant filed an application under Section 9 of the IBC which relates to the operational debt which is defined under Section 5(21) of the IBC and it is a claim in respect of provision of goods or services including employment or a debt in respect of the payment of dues arising under any law for the time being enforce. Therefore, only those claim in respect of which the provisions of goods or services including employment are provided comes under the definition of operational debt or if it is a debt in respect of the payment of dues arising under any law for the time being enforce and payable to the Central Government, any State Government or any Local Authority. In view of Section 5(21) the amount which the applicant claim does not come under the definition of operational debt and since the amount claimed by the applicant does not come under the definition of operational debt. Therefore, the applicant cannot be treated as Operational Creditor under Section 5(20) of the IBC because the Operational Creditor means a person to whom an operational debt is owed and include any person to whom such debt has been legally assigned or transferred - there is force in the contention raised on behalf of the Ld. Counsel appearing for the Corporate Debtor that the claim of the applicant does not come under the definition of Operational debt and the applicant is not the Operational Creditor. The present application is not maintainable and liable to be dismissed - Application dismissed.

Issues Involved:
1. Whether the applicant qualifies as an Operational Creditor under Section 5(20) of the Insolvency and Bankruptcy Code, 2016 (IBC).
2. Whether the amount claimed by the applicant constitutes an operational debt under Section 5(21) of the IBC.
3. The implications of the courier service agreement between the parties.
4. The existence and implications of any disputes regarding the reconciliation of accounts.

Detailed Analysis:

Issue 1: Whether the applicant qualifies as an Operational Creditor under Section 5(20) of the IBC.
The applicant, Netmeds Marketplace Limited, claimed to be an Operational Creditor under Section 5(20) of the IBC, asserting that Madhatters Voyage Private Limited (Corporate Debtor) owed them a debt. The Corporate Debtor contested this, arguing that the applicant did not provide any goods or services to them, thus not qualifying as an Operational Creditor. The Tribunal examined the definitions under Section 5(20) and concluded that the applicant did not meet the criteria of an Operational Creditor because they were not the provider of services in this context.

Issue 2: Whether the amount claimed by the applicant constitutes an operational debt under Section 5(21) of the IBC.
The applicant claimed an amount of ?50,19,042 as operational debt, arising from the courier services agreement. The Corporate Debtor argued that the amount did not qualify as operational debt since the services were rendered by the Corporate Debtor to the applicant, not the other way around. The Tribunal referred to the definitions of "operational debt" and "claim" under Sections 5(21) and 3(6) respectively and concluded that the amount claimed did not constitute operational debt because it did not arise from the provision of goods or services by the applicant.

Issue 3: The implications of the courier service agreement between the parties.
The agreement dated 06.03.2018 outlined the obligations of the Corporate Debtor to provide courier services, including delivering shipments, handling cash on delivery (COD) payments, and returning undelivered shipments. The applicant argued that the Corporate Debtor's failure to remit the COD amounts constituted a breach of their obligations under the agreement. The Tribunal reviewed the agreement and found that the services were provided by the Corporate Debtor, not the applicant, thereby supporting the Corporate Debtor's contention that the applicant was not an Operational Creditor and the claimed amount was not operational debt.

Issue 4: The existence and implications of any disputes regarding the reconciliation of accounts.
The Corporate Debtor contended that there were ongoing disputes regarding the reconciliation of COD payments, which had been communicated to the applicant. The applicant denied this, asserting that they had repeatedly sent reminders and updated the pending amounts. The Tribunal noted that the existence of such disputes further complicated the matter and indicated that the appropriate remedy would be a civil suit rather than proceedings under the IBC.

Conclusion:
The Tribunal concluded that the applicant did not qualify as an Operational Creditor and the amount claimed did not constitute operational debt under the IBC. Consequently, the application under Section 9 of the IBC was dismissed. The Tribunal did not address other issues raised by the parties, deeming them irrelevant given the primary findings.

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