Del credere agency for procurement and supply invoices treated as assigned operational debt; agent allowed to file IBC s.9 claim

The primary issue was whether the claim under a del credere agency agreement constituted an "operational debt" under ss. 5(20) and 5(21) IBC. The Tribunal held that the agreement transferred procurement, supply, invoicing, collection, and attendant statutory compliance/risk to the agent, amounting to assignment of operational debt; the agent therefore qualified as an operational creditor and could invoke s. 9, so the admission order was upheld. The objection based on absence of GST returns/e-way bills was rejected as Regulation 2B is merely procedural and the invoices, delivery records, payment material, and debtor admissions proved supply and liability. The privity objection was rejected as the arrangement was effectively tri-partite by request and conduct; the appeal was dismissed.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the debt claimed under the Del Credere arrangement constituted an "operational debt" and whether the claimant qualified as an "Operational Creditor" entitled to maintain an application under Section 9, notwithstanding that invoices were raised by the principal supplier and not by the claimant.

(ii) Whether contractual clauses restricting the agent from acting as legal representative "on behalf of" the principal barred the claimant from filing the insolvency application in its own capacity.

(iii) Whether the alleged non-filing of GST returns/e-way bills by the claimant defeated maintainability, or was merely procedural when other evidence established supply and liability.

(iv) Whether contempt was made out against the Resolution Professional for alleged wilful disobedience of the Tribunal's interim/stay-related directions regarding possession/operations of the corporate debtor's premises.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Operational debt and status as Operational Creditor under Del Credere arrangement

Legal framework (as discussed by the Tribunal): The Tribunal examined the definitions of "Operational Creditor" (a person to whom operational debt is owed, including one to whom such debt has been legally assigned/transferred) and "Operational Debt" (claim in respect of provision of goods/services).

Interpretation and reasoning: The Tribunal treated the Del Credere Agreement as transferring to the agent the commercial responsibility and risk for collection and customer default. It relied on the agreement clauses providing that: (a) the principal would issue invoices to customers through the agent; (b) the agent would be solely responsible for collection and would indemnify the principal against non-realisation; and (c) if customers defaulted, the agent would itself pay the outstanding amount (with interest/charges) as if the amount were due and payable by the agent. On these terms, the Tribunal held that the agent became the entity to whom the buyer's liability was owed in substance, and in any event fell within the definition of an assignee/holder of the operational claim for the purpose of Section 9. The Tribunal also relied on undisputed conduct: the corporate debtor requested registration "through" the agent, repeatedly paid the agent for nearly two years without objection, did not dispute receipt/utilisation of goods, and did not deny default/non-payment of the admitted dues.

Conclusion: The Tribunal conclusively held that the claimed amount was an operational debt and the Del Credere Agent qualified as an Operational Creditor entitled to maintain the Section 9 application; therefore the admission order warranted no interference on this ground.

Issue (ii): Effect of clauses prohibiting acting "on behalf of" the principal

Legal framework (as discussed by the Tribunal): The Tribunal considered the contractual clauses stating the agent/channel partner was not authorised to act as legal representative/agent "on behalf of" the principal except to the extent authorised, and could not assume obligations in the principal's name without permission.

Interpretation and reasoning: The Tribunal found these restrictions irrelevant to the maintainability of the insolvency application because the claimant did not file the proceeding as a legal representative "on behalf of" the principal. Rather, it filed in its own capacity as Operational Creditor under the Del Credere structure, where the agreement itself imposed financial liability on the agent upon the buyer's default, thereby giving the agent its own enforceable claim against the buyer. The Tribunal therefore rejected the argument that absence of authority to litigate for the principal barred the claimant's Section 9 application.

Conclusion: The Tribunal held the contractual non-representation clauses did not bar the claimant from initiating Section 9 proceedings in its own right as Operational Creditor under the Del Credere arrangement.

Issue (iii): Non-filing of GST returns/e-way bills by claimant

Legal framework (as discussed by the Tribunal): The Tribunal addressed the contention that procedural requirements relating to GST documents were not complied with and considered their role as verification aids.

Interpretation and reasoning: The Tribunal held the GST-related objection was misplaced, treating the requirement as procedural and intended to assist verification. It found that supply and liability were sufficiently established by the invoices and delivery documents, payment records, and the corporate debtor's own admissions, along with the Del Credere clause making the agent financially responsible for defaults. Consequently, lack of GST returns/e-way bills filed by the claimant did not negate the existence of operational debt or the claimant's entitlement to recover.

Conclusion: The Tribunal rejected the GST-document objection as non-fatal and upheld maintainability based on substantive evidence of supply, liability and default.

Issue (iv): Contempt-whether wilful disobedience by the Resolution Professional was established

Legal framework (as applied by the Tribunal): The Tribunal assessed whether the Resolution Professional's conduct amounted to wilful and intentional disobedience of operative directions of the Tribunal/Supreme Court orders, in light of the conditional nature of revival of stay and the pendency of clarification.

Interpretation and reasoning: The Tribunal found that there was a genuine controversy on dates and extent of takeover/control and that the Resolution Professional acted within the evolving directions. After the stay was vacated for non-deposit, the Resolution Professional resumed CIRP steps; after the conditional revival order, he awaited formal satisfaction/communication and sought clarification from the Tribunal. The Tribunal noted that it ultimately passed directions permitting the promoters to run operations with reporting/oversight arrangements and that the Resolution Professional's clarification request was bona fide. In these circumstances, the Tribunal held the element of wilful disobedience was not made out.

Conclusion: The Tribunal concluded that no contempt was established and dismissed the contempt petitions.

Final outcome (material to decision): The Tribunal upheld the admission of the Section 9 application by holding that the Del Credere Agent was an Operational Creditor and the claim constituted operational debt; it further held there was no contempt by the Resolution Professional. The appeal and the linked contempt proceedings were dismissed.

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