TaxTMI 
TaxTMI 
2020 (1) TMI 1248
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.... office at Dubai and having identification No. 561386769. 3. The respondent/corporate debtor is a company registered under the Companies Act, incorporated on 05.08.2005 having identification No. U24230GJ2005PLC046560 and having registered office at Sarkhej-Gandhinagar Highway, Ahmedabad, Gujarat State. Authorised share capital of the respondent company is Rs. 3,00,00,000/- and paid up share capital is Rs. 1,86,83,000/-. 4. The applicant/operational creditor company is exclusive distributor of the corporate debtor's products for supermarkets, groceries and HORECA channel. That, the corporate debtor had contacted the applicant for exclusive distribution of its products in the territory of UAE. That, upon entering into a Memorandum of Understanding (hereinafter referred to as MoU) dated 15.01.2015, the applicant was distributing the products manufactured and packed by the respondent company in the brand name "Bajaj Veola" in UAE territory. That, it was also agreed between the parties that the marketing costs such as consumer promotion, primary displays etc. incurred by the applicant were to be reimbursed by the corporate debtor. 5. The applicant/operational creditor has s....
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....tor. That, in reply, the corporate debtor vide email dated 18.05.2016 agreed to transfer AED 45,000 to applicant before the end of May, 2016 and even promised to provide a schedule of balance payment of debit note claims and to liquidate the stock at discounted rate of 25% off. That, as no definite answer was forthcoming from the corporate debtor, the applicant sent email dated 30.05.2016 asking to confirm any one of the option and to transfer AED 45,000 towards part payment and accordingly the corporate debtor had transferred the said amount on 31.05.2016. Upon receiving a reminder from the applicant dated 13.06.2016 towards marketing expenses, the corporate debtor vide email dated 19.06.2016 had stated that it will provide a date of transfer towards balance payment and liquidation of the stock. 8. It is further stated by the applicant that despite strenuous efforts to settle the issue and even after so many email communication, no consensus was being reached between the parties. That the corporate debtor sent an email to the applicant on 19.05.2017 stating that the corporate debtor has ended its business with the applicant amicably and by its consent contrary to the fact that ....
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....mburse entire claim amount of Rs. 74,77,200/- (Rupees seventy-four lacs seventy-seven thousand two hundred only) along with interest @ 18% per annum from the date of default as well as entire litigation cost. 14. In support of its claim, the operational creditor has annexed to the application copy of all related documents like copy of invoices, demand notice, e-mail communication, MOU etc. 15. The respondent/corporate debtor filed affidavit in reply inter alia raising the following objections: - (i) the instant application is not maintainable as there exists a prior dispute between the parties; (ii) the debit notes raised by the petitioner are wholly untenable and illegal; (iii) there is no acceptance/admission of debt as claimed by the petitioner; Findings 16. Heard learned lawyers appearing for both the sides, also seen the documents annexed to the application. 17. On perusal of the record it is found that the instant case is arising out of MOU dated 15.01.2015 which was terminated on 14.01.2016 as per clause 3.1 of the MOU which is reproduced here below: - 3.1 VV & Sons is appointed as the Exclusive Distributor in the Territory and fo....
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....itor, means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred". iii. "Operational Debt", as per section 5(21), "Operational Debt, means a claim in respect of the provision of goods or services including employment or a debt in respect of repayment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any Local Authority". 21. On perusal of the above definition it shows that the debt can be considered as an "operational debt" provided the claim arises out of the provisions of goods or services including employment or a debt in respect of the payment of dues arising under any law for the time being in force and payable to either the Central Government, any State Government or any Local Authority. 22. Thus, it is clearly seen from the above definition that there is no relation of operational creditor and corporate debtor. Operational creditor never supplied any goods and/or rendered services to the corporate debtor. However, the instant case is arising out of breach of MOU and certain promises made by the respondent. Even as pe....
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.... by the debtor or the Corporate debtor as the case may be". 26. The Hon'ble Supreme Court in the matter of Swiss Ribbon Pvt. Ltd. & Ors. Vs. Union of India & ors., observed that "an Operational Debt would include claim in respect of the provision of goods and services, including employment or a debt in respect of payment of dues arising under any law and payable to the Guarantor or any local authority. Thus, there is no "Operational Debt" for which the applicant can claim himself to be the "Operational Creditor". 27. Objective of the I & B Code is to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the priority of payment of government dues and to establish an Insolvency and Bankruptcy Fund, and matters connected therewith or incidental thereto. An effective legal framework for timely resolution of insolvency and bankruptcy would support development of credit markets and encourage ent....