The term ‘goods’ u/s Section 5(20) and (21) of IBC, 2016 cannot be given an independent meaning de hors the term ‘provision’ being prefixed to the said definition – M/s. NCC Infrastructure Holdings Ltd. Vs. M/s. TAQA India Power Ventures Pvt. Ltd. – NCLT Chennai Bench
It is no doubt that as per the definition of ‘Goods’ under Section 2(7) of the Sale of Goods Act, 1930 includes stocks and shares. However, the term ‘goods’ cannot be given an independent meaning de hors the term ‘provision’ being prefixed to the said definition. In any case, as per the SPA dated 19.09.2012, the Corporate Debtor has agreed to pay the sum in exchange of the shares being transferred by the Operational Creditor. In the present case, as per the SPA, it is the Corporate Debtor who has agreed to buy the shares by paying the money to the Operational Creditor and that the Operational Creditor has not provided any goods to the Corporate Debtor but in turn it is the Corporate Debtor who has agreed to pay the money for the shares held by the Operational Creditor.
Further, viewed from another perspective, as to the facts of the present case, the right to claim money from the Corporate Debtor emanates from a SPA dated 19.09.2012, pursuant to which the Corporate Debtor had acquired the shares from the Operational Creditor. The transaction as transpired between the parties could have been treated as an ‘operational debt’ had it occurred in the ‘ordinary course of business’ of trading in shares by one seller and another purchaser, in which context the expression ‘shares’ would partake the characteristics of ‘goods’ as envisaged under the Sale of Goods Act, 1930. However, it is not so in the present case and the parties to the present proceedings are governed by a Share Purchase Agreement’, and non – adherence / violation of the said terms and conditions envisaged thereunder, cannot be, under any circumstances, be treated as a claim in respect of the provision of goods’ as defined under Section 5(21) of IBC, 2016. Thus, for the aforestated reasons, we are of the considered view that the alleged ‘debt’ as claimed by the Operational Creditor in the present Application does not fall within the definition of the expression ‘operational debt’ as defined under Section 5(21) of the IBC, 2016.(p14-17)
