The court affirmed that operational debt exists and is due prior to the 25.03.2020 cut-off, allowing for initiation of CIRP despite Corporate Debtor’s claims of pre-existing disputes.

ORDER

1. The instant application was filed on 19.03.2021 by M/s Mahaveer Medicare (hereinafter referred to as ’Operational Creditor/ Applicant) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred as the “I & B Code, 2016”) read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred as “the Rules”). The prayer made therein is to initiate Corporate Insolvency Resolution Process (hereinafter referred as ‘CIRP’) against M/s Rancom Healthcare Private Limited (hereinafter referred as ‘Respondent-Corporate Debtor’) due to default in payment of total outstanding amount of Rs. 11,11,63,901 /- (Rupees Eleven Crores Eleven Lakhs, Sixty-Three Thousand Nine Hundred One) with the date of default mentioned in the application as 25.09.2018.

2. As stated in the application, the Operational Creditor i.e. M/s Mahaveer Medicare, is an all-India consignee agent of Cipla Limited engaged in the business of marketing, sale and distribution of pharmaceutical products, including generic 3 medicines (hereinafter referred to as ’Products’) manufactured by Cipla Limited, all over India, through its sub-agents located in various cities across their country.

3. The Corporate Debtor i.e. M/s Rancom Healthcare Pvt. Ltd. is a sub-agent of Cipla Ltd. with which the Operational Creditor entered into an Sub-Agency Tripartite Agreement (hereinafter referred to as ’Agreement’) dated 11.04.2016, between Cipla Limited, the Operational Creditor and Corporate Debtor, wherein the Corporate Debtor was appointed as a sub-agent on a non- exclusive basis in terms of clause 3.1 for the purpose of sale/distribution/ marketing of pharmaceutical products to semi wholesalers, stockiest and distributors. Copy of the Agreement dated 11.04.2016 has been annexed as ‘Annexure-A’ with the Application.

4. It is further stated in the application that the Operational Creditor possesses a comprehensive data entry software known as INTERACT which is designed for managing records and accounts related to various operations, distribution, marketing, and sales of Products. This software serves as a centralized platform accessed by all appointed sub-agents, mandating them to input data 4 regarding sales, collections, and product-related records. Both Cipla and the Operational Creditor utilize INTERACT for data entry and retrieval, facilitating access to information submitted by sub- agents, including opening balances, quantities of Products received and sold, realized revenues, and remaining stock balances for Products dispatched by the Operational Creditor. According to the Agreement, during the Financial Year 2018-19, the Operational Creditor transferred Products valued at Rs. 18,46,25,310/- from its Jaipur depot to the Corporate Debtor’s facility in Lucknow on a periodic basis. Copy of few invoices and delivery challan receipts evidencing products arte annexed as Annexure -’B1 to B31’ & ’C1 to C8’ respectively with the Application.

5. It is further stated in the application that the Corporate Debtor got engaged in the sale of these Products. However, the Corporate Debtor has defaulted in fulfilling its obligation to remit the complete value of the gross sales of the Products, thereby violating Clause 14.1 of the Agreement as per which sale of every month by the Corporate Debtor is to be remitted by 25th day of every month to the account