Consolidated Construction Consortium Limited Vs Hitro Energy Solutions Private Limited (Supreme Court of India)
Facts- Project was executed by the appellant with Chennai Metro Rail Limited (CMRL). Accordingly, CMRL placed an order for supply of light fittings. In turn, the appellant placed orders with the Proprietary Concern, which was the supplier of Thorn Lighting India Private Limited
The Proprietary Concern requested the appellant for an advance payment of Rs 50,00,000. CMRL issued a cheque of Rs 50,00,000 in favor of the respondent, with the condition that the delivery of the light fittings should be in compliance with the schedule provided by the appellant.
On 02.01.2014, CMRL informed the appellant that the project they had been working on stood terminated. According to the appellant, this information was communicated to the Proprietary Concern on the same day. However, this has been denied by the respondent.
Thereafter, the Proprietary Concern deposited the cheque issued by CMRL and withdrew the amount of Rs 50,00,000. Since the project had been terminated, CMRL informed the appellant that the amount would be deducted from the dues payable to it unless the amount was returned. The appellant paid the amount of Rs 50,00,000 to CMRL and intimated this to the Proprietary Concern and requested them to make the payment.
On 18.07.2017, the appellant sent a Form-3 Demand Notice u/s 8 of the IBC to the respondent, where the amount of the debt is noted as Rs 83,13,973, inclusive of interest. The respondent denied that any debt was owed by them to the appellant. Thereafter, the appellant filed its application u/s 9 of the IBC read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules 2016 on 01.11.2017. The NCLT admitted the application u/s 9 of the IBC, declared a moratorium under Section 14 of the IBC and appointed an IRP. The present appeal arises from the decision of NCLAT.
Conclusion- In the present case, the appellant clearly sought an operational service from the Proprietary Concern when it contracted with them for the supply of light fittings. Further, when the contract was terminated but the Proprietary Concern nonetheless encashed the cheque for advance payment, it gave rise to an operational debt in favor of the appellant, which now remains unpaid. Hence, the appellant is an operational creditor under Section 5(20) of the IBC.
Held that the appellant is an operational creditor under the IBC, since an ‘operational debt’ will include a debt arising from a contract in relation to the supply of goods or services from the corporate debtor.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
This judgement has been divided into the following sections to facilitate analysis:
PART A
