A Del Credere Agent who has paid to Principal Supplier the outstanding amount due from Buyer(Corporate Debtor) is an Operational Creditor, an application u/s 7 is not maintainable – Madras Chemicals & Polymers Vs. Vijay Aqua Pipes Pvt. Ltd. – NCLAT Chennai
In this case, the Section 7 application filed by a Del Credere Agent was dismissed by NCLT, Chennai Bench. In appeal, NCLAT held that:
(i) The default which took place pertaining to the supply of goods comes within the definition of Operational Debt as per Section 5(21) of the Code, 2016 and hence, Section 9 of the Code, 2016 attracts in an unambiguous manner. Viewed in that perspective, the debt in the present case, cannot be termed as Financial Debt, as per Section 5 (8) of the Code, 2016, in the considered opinion of this Tribunal.
(ii) In the instant case, the default arose in relation to the supply of PVC Suspension Resin (Goods) to the Corporate Debtor and as such, the amount claimed to be in default by the Corporate Debtor as on 20.07.2019 amounting to Rs.1,23,14,186.94/-, is an Operational Debt and for the said Operational Debt, only an application under Section 9 of the Code will apply.
(iii) Upheld the decision of the NCLT.
