For filing Complaint for recovery of money under IBC the one should be either financial creditor or operational creditor. To qualify as creditor in either of the category- financial or operational creditor the one must be qualified as per the definition of owing financial debt or operational debt. It is always been and debated issue that weather a particular nature of debt will be termed as d e b t under the IBC law or not.
Who is creditor?
“creditor” means any person to whom a debt is owed, it includes a financial creditor, an operational creditor, a secured creditor, an unsecured creditor and a decree-holder
What is Operational Debt?
“Operational debt” refers to debt which arises in respect of provision of goods or services including employment or a debt in respect of the dues arising under any law for the time being in force and payable to any Government or any local authority.
Gail Limited Vs Ajay Joshi
Similar controversy rise in the case of Gail Limited versus Ajay Joshi where in in the corporate debtor was into agreement with Gail Limited to consume/receive the minimum guaranteed quantity of natural gas. In this case unlimited is corporate applicant and Ajay Joshi is appointed resolution professional when Gail Limited has filed its claim as operational creditor with the resolution professional but the same has been rejected by resolution Professional saying that it has no direct Nexus with provision of goods or services rather the claim is just against the guarantee that it corporate debtor will pay for the minimum quantity of natural gas to be consumed.
When the matter went to NCLT for its consideration, then NCLT has took reliance on NCLT, Allahabad Bench, in Axis Bank v. GODPL [CP(IB) No. 25/ALD/2017, dated 10-10-2017] and Exim Bank Ltd. v. JEKPL (P.) Ltd. [CP (IB) No. 25/ALD/2017, dated 17-10-2017], it is hereby directed that RP in the present matter would reconsider its decision and to treat the present application as an operational creditor and its claim as operational debt, being similar to the stand taken by other Resolution professional based on similar footing and terms and conditions of the contract agreement with the present applicant.
Therefore, Obligation under “TAKE OR PAY” agreement is pronounced as operational debt.
Disclaimer:–The article is intended for the awareness and education of the readers, if any of reader is intended to use above in any legal work, it is advisable that before placing their reliance on it they reconfirm it from the legal experts.
ABOUT AUTHOR:- Rajul Jain (CA, MCOM, LLB, MBA, CNPO, CPFA, NCFM) is Chartered Accountant and Legal Consultant, academically he is highly qualified and have gone through various certifications. He extensively speaks and writes on finance, taxation and legal matters. The author can be reached at email@example.com