TaxTMI 
TaxTMI 
2022 (11) TMI 506
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.... from the Corporate Debtor, the Appellant on 28.03.2016 advanced an amount of Rs.60 lakhs to the Respondent - Corporate Debtor for aviation related services, which services were not provided by the Corporate Debtor nor the advance paid by the Appellant was refunded. After payment of the advance amount, there has been several emails correspondence between the Appellant and the officials of the Corporate Debtor. The advance payment made by the Appellant to the Corporate Debtor was reflected in the Balance Sheets of the Corporate Debtor as on 31.03.2016 under the head current liabilities. The amount of Rs.60 lakhs was continuously shown as advance received from the customers during 2015-16, 2016-17 and 2017-18. The Appellant on 08.11.2017 wrote to the Corporate Debtor to return back the amount at the earliest. (ii) On 26.03.2019, the Appellant filed a complaint against the Corporate Debtor with the Registrar of Companies Delhi and Haryana, where entire sequence of the facts was narrated and prayer was made to carry on investigation, so the amount of Rs.60 lakhs be refunded and action be taken against the Director, agents and officials of the Corporate Debtor. (iii) O....
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....dvance payment for goods and services is an Operational Debt, hence, the very foundation of the order of the Adjudicating Authority is knocked out and the Application under Section 9 was liable to be admitted. 5. The learned Counsel for the Respondent refuting the submission of learned Counsel for the Appellant contends that there is no evidence on record to indicate that there is any contract between the Appellant and the Corporate Debtor. In Section 9 Application, the Appellant has come up with a case that the amount of Rs.60 lakhs was advanced on the assurance/ advice of direct dealing with the Corporate Debtor, but in the Appeal, now the Appellant has improved its case by stating that the amount of Rs.60 lakhs was advanced under an oral contract with the Corporate Debtor. It is submitted that there being no privity of contract between the Appellant and the Corporate Debtor, advance payment of Rs.60 lakhs cannot be held to be an Operational Debt. It is further submitted that Application filed by the Appellant under Section 9 was barred by limitation and the submission was raised before the Adjudicating Authority that Application was barred by limitation, but in the impugned o....
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....l Creditor, details of correspondence after payment by the Operational Creditor to the Corporate Debtor has been detailed. The copy of the complaint dated 26.03.2019 was part of Section 9 Application and the same has been filed as Annexure A-5 to the Appeal. In paragraph 9 of the complaint, correspondence between Appellant and the Corporate Debtor has been mentioned. On 13.04.2016, an email was forwarded on behalf of Corporate Debtor to one Shri Sushil Kumar [email protected] contained following: "13-04-2016 DAISY CHIPSAN daisy@chipsan .com Sushil Kumar/F&A/ Group <sushilkumar@ punjlloyd.com> Please forward me the Agreement copy. It may be noted that the Agreement desired by my client was agreement with the Respondent Company." 11. There has been repeated correspondence as encapsulated in the complaint, which indicate that there has been correspondence and various requests from the Operational Creditor to the Corporate Debtor with regard to goods and services. Thus, the correspondence as encapsulated shows that an amount of Rs.60 lakhs was advanced for providing goods and services to the Corporate Debtor. Neither goods and services could be provided, nor any ....
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.... be the supplier or receiver. Such an interpretation is also supported by the observations in the BLRC Report, which specifies that operational debt is in relation to operational requirements of an entity. 50.2. Second, Section 8(1) IBC read with Rule 5(1) and Form 3 of the 2016 Application Rules makes it abundantly clear that an operational creditor can issue a notice in relation to an operational debt either through a demand notice or an invoice. As such, the presence of an invoice (for having supplied goods or services) is not a sine qua non, since a demand notice can also be issued on the basis of other documents which prove the existence of the debt. This is made even more clear by Regulations 7(2)(b)(i) and (ii) of the 2016 CIRP Regulations which provide an operational creditor, seeking to claim an operational debt in a CIRP, an option between relying on a contract for the supply of goods and services with the corporate debtor or an invoice demanding payment for the goods and services supplied to the corporate debtor. While the latter indicates that the operational creditor should have supplied goods or services to the corporate debtor, the former is broad enough to ....