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NCLAT allowed the appeal and set aside NCLT's order admitting a s.9 IBC application and initiating CIRP against the corporate debtor. It held that there was no privity of contract between the operational creditor and the corporate debtor, as both had separate contracts with the Trust/Hospital, and the agreement between the Trust and the corporate debtor expressly negated any agency or sub-management arrangement. Services were rendered by the operational creditor to the Trust/Hospital, not to the corporate debtor; hence the alleged claim could not constitute "operational debt" under s.5(21) IBC. The corporate debtor had no direct liability towards the operational creditor.
NCLAT allowed the appeal and set aside NCLT's order admitting a s.9 IBC application and initiating CIRP against the corporate debtor. It held that there was no privity of contract between the operational creditor and the corporate debtor, as both had separate contracts with the Trust/Hospital, and the agreement between the Trust and the corporate debtor expressly negated any agency or sub-management arrangement. Services were rendered by the operational creditor to the Trust/Hospital, not to the corporate debtor; hence the alleged claim could not constitute "operational debt" under s.5(21) IBC. The corporate debtor had no direct liability towards the operational creditor.
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