Transline Technologies Limited Vs Experio Tech Private Limited (NCLT Delhi)
The National Company Law Tribunal (NCLT) Delhi dismissed a Section 9 insolvency petition filed by Transline Technologies Limited against Experio Tech Private Limited. Transline, claiming to be an operational creditor, sought to initiate Corporate Insolvency Resolution Process (CIRP) against Experio for an alleged outstanding debt of Rs. 3.87 crore. Transline argued that it supplied electronic equipment to Experio under a business agreement, for which five invoices remained unpaid. Experio, however, contested the claim, arguing that the relationship was not that of creditor and debtor but rather a joint venture or profit-sharing arrangement.
Transline contended that it provided electronic items and IT solutions to Experio, raising invoices for the supplied equipment. Experio, while admitting receipt of the goods and invoices, argued that a Memorandum of Understanding (MoU) existed between the parties, which characterized their relationship as a collaborative venture. Experio claimed that this MoU, dated September 3, 2021, established an exclusive arrangement where Experio would procure materials exclusively from Transline, and both parties would share profits equally. Experio further submitted that Transline had failed to supply certain items on time, leading to the cancellation of a tender and subsequent losses for Experio, for which they had issued debit notes.
The NCLT analyzed the submissions and the MoU, noting that the agreement stipulated profit-sharing and joint responsibilities for supplying to third parties. This arrangement, the tribunal observed, differed significantly from a typical debtor-creditor relationship. The NCLT relied on the NCLAT’s decision in Prashanth Shekara Shetty v. Alcuris Healthcare, which held that when shared control, joint investment, and profit/loss sharing are evident, the relationship is more akin to a partnership or joint venture than an operational creditor-debtor one. The NCLT concluded that the transactions between Transline and Experio were not simply the provision of goods or services, but rather a collaborative business undertaking.
The NCLT also noted that Experio, in its reply to the Section 8 notice, claimed that a full and final settlement had occurred, and that Transline had subsequently taken back materials. Furthermore, the NCLT pointed out that Transline had allegedly delayed supplying certain goods under a purchase order, potentially contributing to the dispute. Based on these findings, the NCLT determined that Transline did not qualify as an “operational creditor” as defined under Section 5(20) of the Insolvency and Bankruptcy Code, 2016, a crucial requirement for initiating CIRP under Section 9. The NCLT emphasized that the profit-sharing arrangement was inconsistent with a standard operational debt. Therefore, the tribunal dismissed Transline’s petition, concluding that the fundamental criteria for initiating CIRP were not met.
FULL TEXT OF THE NCLT JUDGMENT/ORDER
