Del Credere Agent Who Paid Principal For Corporate Debtor’s Default Can Initiate CIRP U/S 9 IBC: NCLT Kolkata - 2025-09-21

NCLT Admits Insolvency Plea by Del Credere Agent, Cites Right to Recover Dues Paid on Behalf of Debtor

Kolkata: The National Company Law Tribunal (NCLT), Kolkata Bench, comprising Smt. Bidisha Banerjee (Judicial Member) and Cmde. Siddharth Mishra (Technical Member) , has admitted a petition to initiate Corporate Insolvency Resolution Process (CIRP) against Samarth Fablons Private Limited. The Tribunal affirmed that a Del Credere Agent (DCA), who has paid the principal supplier for goods on behalf of a defaulting corporate debtor, qualifies as an 'Operational Creditor' and can initiate proceedings under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC).

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Background of the Case

The petition was filed by Kushal Polysacks Pvt. Ltd. (the Operational Creditor) against Samarth Fablons Private Limited (the Corporate Debtor) for a default amounting to ₹18,26,33,734.

The relationship between the parties stemmed from a Del Credere Associate Agreement dated June 22, 2010, between Kushal Polysacks and Indian Oil Corporation Limited (IOCL). Under this agreement, Kushal Polysacks acted as a DCA for IOCL. Samarth Fablons purchased polymer granules from IOCL, tagging Kushal Polysacks as its DCA.

As per the agreement, the DCA was responsible for ensuring timely payment to IOCL within 48 hours of an invoice being raised on the buyer (Samarth Fablons). If the buyer defaulted, the DCA was contractually obligated to pay IOCL and then recover the amount from the buyer. Kushal Polysacks claimed it had to pay IOCL due to Samarth Fablons' persistent defaults over several years, leading to the outstanding debt.

Key Arguments from Both Sides

Operational Creditor's Stance

Kushal Polysacks, represented by Sr. Adv. D. N. Sharma, argued:

* As a DCA, it stood as a guarantor for payments owed by Samarth Fablons to IOCL.

* Clause 5.2.5 of the DCA Agreement explicitly made the recovery of money from the customer the exclusive responsibility of the DCA.

* The debt is an 'operational debt' as it arises from payments made for goods supplied.

* Samarth Fablons had admitted a portion of the debt in an email dated July 4, 2023.

* The Corporate Debtor's claims of a family settlement and pending civil suits were an afterthought and did not constitute a "pre-existing dispute" relevant to the operational debt.

Corporate Debtor's Defence

Samarth Fablons, represented by Sr. Adv. Ratnanko Banerji, raised several objections:

* Maintainability: The petition was not validly authorized as the directors who signed the authorizing resolution had since resigned.

* Locus Standi: Kushal Polysacks was merely an agent of IOCL and, under Section 230 of the Indian Contract Act, 1872, an agent cannot personally enforce contracts on behalf of the principal.

* Pre-existing Disputes: Long-standing family disputes between the promoters of both companies, pending in civil courts, were the real issue, and the IBC was being used as a recovery tool.

* Lack of Invoices: The Operational Creditor failed to attach the specific unpaid invoices to its demand notice, which is a procedural necessity.

Tribunal's Analysis and Key Findings

The NCLT methodically addressed the issues raised by the Corporate Debtor and delivered a detailed analysis.

On Authorization and Agency

The Tribunal found that the authorization to file the petition was validly granted on November 18, 2022, when the concerned directors were in office, and there was no evidence of it being subsequently revoked.

Crucially, the bench interpreted the DCA Agreement to determine the true nature of the relationship. It held:

"A bare perusal of the Clauses extracted supra would exemplify and demonstrate that this DCA Agreement confers all the rights upon the IOCL, the principal and Kushal the present OC, acts as an Agent. The Agreement empowers the present OC alone to recover the dues from an allocated customer of IOCL. Such overt clause in the DCA agreement empowers the OC the sole Authority to file the present proceedings against the CD."

The NCLT concluded that the DCA Agreement effectively created a contract of guarantee under Section 126 of the Indian Contract Act. Kushal Polysacks (the surety) guaranteed to IOCL (the creditor) the payment of dues from Samarth Fablons (the principal debtor). The agreement explicitly assigned the right to sue the debtor to the DCA, making the petition maintainable.

On Pre-existing Disputes

The Tribunal dismissed the argument of pre-existing disputes, noting that the civil suits for family settlement were filed long after the business relationship under the DCA agreement began and did not concern the operational debt in question. Citing the Supreme Court in Swiss Ribbons , the NCLT reiterated that it is not empowered to adjudicate on matters of set-off or counterclaims.

Final Decision and Implications

Finding the debt and default to be established and rejecting the Corporate Debtor's objections, the NCLT admitted the petition. It initiated the CIRP against Samarth Fablons Private Limited and appointed Mr. Swarup Ghosh as the Interim Resolution Professional (IRP).

The order imposes a moratorium under Section 14 of the IBC, freezing any legal actions against the company and transferring its management to the IRP. This judgment reinforces the legal standing of Del Credere Agents within the IBC framework, clarifying that their role as guarantors who pay on behalf of a defaulter entitles them to seek resolution as Operational Creditors.