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2023 (8) TMI 1304 - AT - Insolvency and BankruptcyCIRP - Del Credere Agent Agreement, entered into between the ‘Appellant’ and the ‘Principal' - Commercial Borrowing - Financial Debt’, due and payable by the ‘Respondent / Corporate Debtor’ or not - HELD THAT:- A perusal of the ‘Del Credere Agency Agreement’, dated 04.04.2017, entered into between ‘M/s. Chemplast Sanmar Limited’, and ‘M/s. Madras Chemicals & Polymers’ (‘Appellant / Firm’), represented by its ‘Proprietor’ Mr. Ashok Gupta (the ‘Agent’), in Clause 1, it is mentioned that the ‘Company’, hereby appoints ‘M/s. Madras Chemicals & Polymers (‘Agent’, as ‘Del Credere Agent’), to sell the said Products, manufactured by the ‘Company’, on ‘principal to principal basis’, in the City of Chennai and its Suburbs, Tamil Nadu, and Customers, nominated by ‘Chemplast’, on a ‘non-exclusive basis’. It cannot be forgotten that the true relationship of ‘Agent’ and the ‘Principal’, is to be gathered from the nature of the ‘Contract’, its ‘Terms and Conditions’, and the ‘Terminology’, used by the ‘Parties’, is ‘not decisive’ of the ‘Legal Relationship’, as per decision of the Hon’ble Supreme Court of India in Snow White Industrial Corporation, Madras v. Collector of Central Excise, Madras [1989 (4) TMI 81 - SUPREME COURT]. It is to be remembered that the ‘Proceedings’, under I & B Code, 2016, are ‘summary in nature’, and it is not a ‘Debt Enforcement Procedure’. An ‘Adjudicating Authority’ / ‘Tribunal’, is not a ‘Recovery Forum’ or ‘Court’ and it does not determine any ‘Claim’ or ‘Suit’, in ‘Summary Proceeding’. No wonder, the ‘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 ‘maximization 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’. Going by the ‘Objective’ and ‘Scheme’ of the ‘I & B Code, 2016’, this ‘Tribunal’, on the basis of surrounding facts and circumstances of the instant case, in the teeth of Clause 15 of the ‘Del Credere Agency Agreement’, dated 04.04.2017 and keeping in mind of a prime fact that 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 I & B Code, 2016 and hence, Section 9 of the I & B Code, 2016, attracts in an ‘unambiguous manner’ - the ‘Debt’, in the present case, cannot be termed as ‘Financial Debt’, as per Section 5 (8) of the I & B Code, 2016, in the considered opinion of this ‘Tribunal’. Considering the spirit and tenor of the ‘Del Credere Agency Agreement’, dated 04.04.2017, this ‘Tribunal’, comes to a clear cut conclusion that in the instant case, the ‘Default’, arose in relation to the supply of ‘PVC Suspension Resin’ (‘Goods’), to the ‘Respondent / 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/- (vide ‘Part – IV’ of the ‘Application’, under ‘Particulars of Financial Debt’), is an ‘Operational Debt’, and for the said ‘Operational Debt’, only an ‘Application’, under Section 9 of the ‘Code’, will ‘apply’, as opined by this ‘Tribunal’. The conclusion arrived at, by the ‘Adjudicating Authority’ (‘National Company Law Tribunal’, Division Bench – I, Chennai), holding that the ‘Section 7 Application’ of ‘I & B Code, 2016’, is ‘not Maintainable’, and resultant dismissal of the same, are free from any ‘Legal Flaws’. Appeal dismissed.
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