596
July 13 To July 19, 2019 u Taxmann’s Corporate Professionals Today u Vol. 45 u 70on behalf of corporate debtor for spectrum
trading. The Said amount was withheld by
operational - creditor from total consideration
of 4022.75 crores payable to corporate debtor
under STA. Due to difference on certain
points, there was a fall out of said STA and
bank guarantee stood cancelled.
Out of withheld amount of 453.73 crores,
operational - creditor retained 112 crores
recoverable from corporate - debtor in
another transaction and balance amount
was remitted to corporate debtor. It was a
case of Resolution Professional that stage
of admission of claims had not reached, as
stage ought to be Liquidation proceedings
and operational - creditor didn’t have right
for equitable set off at Corporate Insolvency
Resolution Process (CIRP) stage.
The NCLT stated that there is no specific bar
or barrier in the Insolvency and Bankruptcy
Code, 2016 that up to CIRP process only gross
amount/claims are to be taken into account
and netting is permissible only in case of start
of liquidation. Also, operational - creditor had
lodged its claims in Form B which was a
‘proof of claim by operational creditor except
workmen and employees’, under regulation
7 of IBBI (Insolvency Resolution Process of
Corporate Persons) Regulations, 2016 wherein
set-off of mutual credits or mutual debits
were to be informed and accordingly to be
claimed during CIRP. Since submission of
Form B by operational creditor had given an
entitlement of netting off amount and thus,
during CIRP operational creditor was legally
entitled to set off 112 crores while making
a payment of amount retained out of total
consideration. Overduetowardsgoodssuppliedwould
be rationalope debt;CIRPwastobe
admittedondefaultinpaymentBonus Plastics (P.) Ltd. v. Gopala Polyplast
Ltd. [2019] 106 taxmann.com 222 (NCLT -
Ahd.)
The operational creditor was manufacturer and
exporter of synthetic filament yarn, narrow
woven fabric, polyester webbings etc. The
Operational creditor supplied polypropylene
multifilament yarn to the corporate debtor. The
Corporate debtor made only part payment.
Despite issuance of section 8 notice by operational
creditor, the corporate debtor had not made
payment of outstanding amount nor raised
any dispute. Subsequent to initiation of instant
insolvency proceedings by the operational
creditor, the corporate debtor approached
the operational creditor for settlement of
outstanding amount. In pursuance to same,
the corporate debtor made payment of two
instalments but failed to make payment of
remaining amount.
The NCLT held that since amount due to
operational creditor from corporate debtor was
in respect of supply of goods, amount claimed
by operational creditor from corporate debtor
would be operational debt. The tribunal held
that the execution of settlement agreement
itself confirmed that operational debt was due
and payable. And therefore, the instant CIRP
application filed by operational creditor being
complete in all respect was to be admitted.
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