Tribunal: Applicant granted financial debt status as Operational Creditor for unpaid charges

The Tribunal ruled in favor of the Applicant, determining that the claim should be considered as a financial debt due to the debtor-creditor relationship established. The Applicant was recognized as an Operational Creditor for unpaid freight charges and operational costs. The delay in claim submission was condoned, attributing it to lack of knowledge. The debt was classified as operational, supported by the collateral security provided. The Liquidator was directed to verify claims and the Corporate Debtor's balance sheet, with the Applicant instructed to submit necessary documentation. The application was disposed of with these directives.

---

---

Issues Involved:
1. Rejection of the Applicant's claim as a Financial Creditor.
2. Rejection of the Applicant's claim as an Operational Creditor.
3. Delay in submission of claims by the Applicant.
4. Classification of debt as Financial or Operational.

Detailed Analysis:

1. Rejection of the Applicant's claim as a Financial Creditor:
The Applicant, TVS Motor Company Limited, challenged the decision of the Liquidator of Kalisma Steel Pvt. Ltd., which rejected its claim as a Financial Creditor. The Applicant contended that it had provided financial assistance to the Corporate Debtor by transferring a loan amount of Rs. 2 Crore, which was acknowledged by the Corporate Debtor with an agreement to repay with interest at 12% per annum. The Liquidator, however, rejected this claim, stating that the debt was in the nature of an advance for the supply of goods and not a financial debt. The Tribunal, upon examining the documents, concluded that the relationship between the Corporate Debtor and the Applicant was that of Debtor and Creditor, and thus, the claim should be considered as financial debt.

2. Rejection of the Applicant's claim as an Operational Creditor:
The Applicant also claimed to be an Operational Creditor, citing unpaid freight charges and other operational costs. The Liquidator rejected this claim, arguing that as per the Audited Books of Accounts, TVS Motors was a debtor, not a creditor. The Tribunal, referencing the Supreme Court's judgment in M/s Consolidated Construction Consortium Ltd. v. M/s Hitro Energy Solutions (P) Ltd., determined that a debt arising from a contract related to the supply of goods or services qualifies as an operational debt. Therefore, the Tribunal recognized the Applicant as an Operational Creditor.

3. Delay in submission of claims by the Applicant:
The Applicant submitted its claims after the deadline, arguing that it was unaware of the liquidation order due to being located out of state and only learned about it on 19.06.2021. The Liquidator had made a public announcement on 26.04.2021, with the last date for submission of claims being 22.05.2021. The Tribunal acknowledged the Applicant's lack of knowledge and condoned the delay, directing the Liquidator to consider the claims.

4. Classification of debt as Financial or Operational:
The Liquidator classified the debt as an advance for the supply of goods, not a financial debt, and rejected the claim due to the absence of essential documentation like a loan agreement or promissory note. The Tribunal, however, found that the advance payment made by the Applicant for the supply of goods constitutes an operational debt, as per the Supreme Court's interpretation in relevant cases. Additionally, the Tribunal noted that the shares pledged as collateral security were provided by the Promoter in an official capacity, thereby creating a security interest in favor of the Applicant, making it a Secured Creditor under Section 3 (30) of IBC, 2016.

Conclusion:
The Tribunal directed the Liquidator to verify the claims and the balance sheet of the Corporate Debtor, and the Applicant to submit relevant purchase orders and clauses. The application was disposed of with these directions.

---