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NATIONAL COMPANY LAW TRIBUNAL
Bidisha Banerjee, Cmde Siddharth Mishra, JJ
Kushal Polysacks Pvt Ltd – Appellant
Versus
Shree Ram Electrocast (Jharkhand) Pvt. Ltd. – Respondent
C.P (IB) NO. 15/KB/2024 | I.A. (IB) NO. 370/KB/2025
Based on the provided legal document, the key points are as follows:
The application for initiating the Corporate Insolvency Resolution Process (CIRP) against Shree Ram Electrocast (Jharkhand) Pvt. Ltd. was filed by Kushal Polysacks Pvt. Ltd. (the Operational Creditor) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) (!) (!) .
The case involves an operational debt owed by the Corporate Debtor to the Operational Creditor under a Del Credere Agency Agreement, with unpaid dues amounting to Rs. 2,32,86,934/- as of June 30, 2023 (!) (!) .
The Operational Creditor acted as a Del Credere Agent for Indian Oil Corporation Limited (IOCL), guaranteeing payments for goods supplied to the Corporate Debtor, and has paid on behalf of the Corporate Debtor due to default (!) (!) (!) (!) .
The invoices for the supply of goods were raised by IOCL directly on the Corporate Debtor, with the OC tagged as the Del Credere Agent, and there was no dispute regarding these invoices from the Corporate Debtor (!) (!) (!) .
The Corporate Debtor admitted liability in its reply to statutory notices and via email, acknowledging the debt amount, which exceeds the threshold limit for insolvency proceedings (!) (!) (!) .
The Corporate Debtor attempted to claim set-offs based on family settlements and other disputes, but the Court found that such set-offs are outside the jurisdiction of the Adjudicating Authority under the IBC and that the debts are operational in nature (!) (!) (!) .
The authority to file the petition was validated through a Board Resolution dated 18.11.2022, authorizing Mr. Saumik Dutta to represent the Operational Creditor in insolvency proceedings. The Court confirmed that this authorization remained valid despite subsequent resignations of some directors (!) (!) (!) .
The relationship between the parties was interpreted as that of principal (IOCL) and agent (Kushal Polysacks), with the latter empowered under the Del Credere Agency Agreement to recover dues from the Corporate Debtor and to file proceedings in its own name (!) (!) (!) .
The Court found that the debt qualifies as an operational debt under the IBC, and the application meets the necessary criteria for admission. The debt is admitted by the Corporate Debtor, and there is no valid dispute regarding the amount owed (!) (!) (!) (!) (!) .
The Court ordered the initiation of CIRP, appointed an Interim Resolution Professional, and imposed a moratorium, with provisions for public announcement and the necessary procedural steps to be taken by the Resolution Professional (!) (!) (!) .
The order also included directions for the Operational Creditor to deposit expenses for the CIRP and for communication of the order to relevant parties (!) (!) .
The proceedings demonstrated that the debt is clear, admitted, and operational in nature, and that the petition was filed with proper authority. The Court dismissed the objections related to family disputes and set-off claims as outside its jurisdiction and irrelevant to the insolvency process (!) (!) (!) (!) .
In summary, the Court admitted the insolvency petition based on the undisputed operational debt owed by the Corporate Debtor to the Operational Creditor, validated the authority of the petitioner, and ordered the commencement of CIRP with appropriate procedural directions.
ORDER
Per: Bidisha Banerjee, Member (Judicial)
1. The Court congregated through a hybrid mode.
2. The Ld. Counsels of both the parties were heard.
3. This petition has been preferred by Kushal Polysacks Pvt. Ltd, hereinafter referred to as the ‘Operational Creditor/OC’ to seek initiation of Corporate Insolvency Resolution Process against respondent Shree Ram Electrocast, the ‘Corporate Debtor/CD’ under Section 9 of the Insolvency and Bankruptcy Code, 2016 , for brevity, ‘I&B Code’.
4. FACTS OF THE CASE:
4.1 OC is the Del Credere Agent (DCA) of Indian Oil Corporation Limited (IOCL), which will appear from DCA Agreement dated June 22, 2010 [Pg- 33-49 of CP). Object and purport of the DCA agreement is to stand guarantee for goods sold and delivered and to ensure timely payment to IOCL for and on behalf of the customers.
4.2 As per the norms of IOCL, M/s Shree Ram Electrocast (Jharkhand) Pvt Ltd (CD) purchased goods/polymer granules from the IOCL, tagging the OC as their DCA.
4.3 As per the DCA agreement, any purchaser of good is required to raise indent, through their DCA with the IOCL. On approval of the indent by the DCA, supply is effected by IOCL and IOCL raises invoice upon the purchaser, tagging the enlisted DCA. DCA is required to pay the Invoice within 48 hours, otherwise 36% interest will be charged upon the DCA or existing bank guarantee of DCA will be invoked.
4.4 Thus, the CD after tagging the OC, has been purchasing goods/polymer granules since the Financial Year 2021-22 to 2022-23 and OC has continuously paid the value of the goods by maintaining running and continuous account, and lastly found dues of Rs. 2,32,86,934/- as on 30th Junc 2023.
4.5 The CD was unable and neglected, to pay the amount even after repeated reminder from OC and Indian Oil due to which IOCL marked the CD as defaulter and banned it to lift any IOCL material Pan India basis since.
4.6 As OC is the DCA, invoices were raised by IOCL as annexed in CP at pages-57 to 70 and not by OC directly upon CD because of the special nature of the DCA Agreement.
4.7 Operational debt under section 5(21) of IBC refers to claim arising out of goods or services. In the present case, purchaser of goods/CD raised indents for purchasing granules upon IOCL through OC/DCA. Once IOCL approves the requisitioned indent received from CD and agrees to supply the goods, IOCL raises invoice upon CD with copy marked to the OC and on tagging the enlisted OC/DCA. The details of the invoices have been set out in the ledger statements which were all part of the statutory notice dated July 3, 2023 issued by OC upon CD.
4.8 The CD never raised any dispute against any single invoice raised by IOCL as mentioned in the ledger statements which were part of the statutory notice also.
4.9 That the IOCL followed SAP software whereby, each and every detail of the transaction always provided to CD which includes Invoices. Physical copy of the invoices always forwarded with the transporter and CD always confirmed the same.
4.10 As a Del Credere Agent (DCA) of Indian Oil Corporation Limited (IOCL) which will appear from DCA Agreement dated June 22, 2010 [Pg-33- 49 of CP), OC as DCA stood guarantee for payment of the total amount of value of the goods/polymer granules which was sold by IOCL to its customers. Reference is made to clause 5.1.1 of DCA Agreement at Pg-40 of CP.
4.11 As per clause 5.2 of DCA Agreement at pg-41 of CP, OC is solely responsible to recover dues from customers of IOCL
4.12 Payment made by OC on behalf of the CD to IOCL has been credited against the account of the CD and hence the present dues are limited between the CD and the OC. IOCL has already realized the default committed by the CD from the OC.
4.13 On September 23, 2021 CD being one of the customers of IOCL issued a letter to IOCL tagging OC as the authorized DCA in respect of the transaction for supply of goods by IOCL/seller to CD/buyer/customer [pg- 50 of CP). CD thereafter submitted document before IOCL and official email of
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