Transit Geo System Integrators Private Limited vs Stahl Tecniks Private Limited

PER SHRI L. N. GUPTA, MEMBER (T)

The present petition is filed under Section 9 of Insolvency and Bankruptcy Code, 2016 (for brevity ‘IBC, 2016’) read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 by M/s Transit Geo System Integrators Private Limited (for brevity ‘Applicant’) through its Director Mr. Dipesh Shashikant Dasadia, who is duly authorized vide their Board Resolution with a prayer to initiate the Corporate Insolvency process against M/s Stahl Tecniks Private Limited (for brevity ‘Corporate Debtor’).

The Operational Creditor namely, M/s Transit Geo System Integrators Private Limited is a Private Company incorporated under the provisions of the erstwhile Companies Act, 1956 on 03.04.2010 with CIN U29100GJ2010PTC060137 having its registered office at C/18, Shivkrupa Society, Amba Nagar, U.M. Road Surat, Gujarat-395017.

The Corporate Debtor namely, M/s Stahl Tecniks Private Limited is a Private Company incorporated under the erstwhile Companies Act, 1956 on 05.06.1984 with CIN U74899DL1984PLC018316 having its registered office at 2^nd Floor, Plot No. 10, LSC, Pocket B-1, Vasant Kunj, New Delhi-110070.

The Authorized Share Capital of the Corporate Debtor is Rs.5,00,000/- and Paid-up Share Capital of the Company is Rs.3,80,000/- as per the Master Data of the Corporate Debtor.

That this Petition filed under Section 9 of IBC, 2016 was argued for the very first time on 11.08.2021. That during the course of preliminary hearing, a question was raised by this Bench that as to how the “debt” claimed in Part-IV of the Application is covered under the ambit of “Operational Debt” ? That the arguments were heard on this limited aspect and the matter was reserved to test the maintainability of the present Application.

That the following has been stated by the Applicant in Part IV of the Application. The scanned copy of the Part- IV is reproduced below :

That from perusal of the Part-IV of the Application, it is observed that the entire claim of the Operational Creditor is based on the Assessment Order dated 28.03.2017 passed by the Sales Tax Department. It has been stated that the demand raised by the Sales Tax Department of Rs.9,87,823/- was paid by the Operational Creditor on behalf of the Corporate Debtor. That the Final Notice of Assessment under the CST Act. 1956, issued by the Sales Tax Department to the Applicant has been placed on record, scanned copy of which is reproduced overleaf :

That during the course of hearing it was submitted by the Ld. Counsel appearing for the Applicant that the aforesaid debt claimed is an “Operational debt” since the same is arising out of the dues payable to the Sales Tax Department of the State Government.

Here, the issue which emerges for our adjudication is – whether the Sales Tax Demand paid by the Operational Creditor can be claimed as reimbursement from a Corporate Debtor as an “Operational Debt” ?

After hearing submissions of the Applicant and perusing the Application and documents placed on record, we observe that in order to adjudicate the issue, it is necessary to visit the definition of “Operational Debt” as defined under Section 5(21) of IBC, 2016. The same is reproduced below:

From bare perusal of Section 5(21) of the Code, it is observed that three types of debts are covered under the definition of “Operational Debt”, which are as follows :

As the “Operational Debt” is to be claimed by an “Operational Creditor”, we, therefore, refer to the definition of the Operational Creditor as defined under Section 5(20) of the Code. The same is reproduced below:

That in the instant case, as evident from Final Notice of Assessment (Supra), the Tax Demand has been raised by the Sales Tax Department against the Operational Creditor and not against the Corporate Debtor.

That although the definition of the Operational Debt includes the dues arising under any law in force and recoverable by the Central Government or State Government or any local authority, in our considered view, the dues payable to the Government can be claimed by the Government only in the capacity of the Operational Creditor.

The payment of Tax Demand made and discharged by the Applicant herein to the State Government will not result in automatic assignment or transfer of such payment/debt to the Corporate Debtor and therefore, Operational Creditor cannot claim the same as reimbursement from the Corporate Debtor as the Operational Debt.

Therefore, we conclude that the amount shown in part IV of the application as defaulted amount, basing on the Final Notice of Assessment dated 28.03.2017, is neither arising out of provision of goods and services nor is a claim in respect of employment nor it represents the dues payable to the Government, is not an Operational Debt within the meaning of Section 5(21) of the IBC, 2016 and therefore, the applicant is not the operational creditor u/s 5(20) of IBC 2016. Accordingly, the present Application filed under Section 9 of IBC, 2016 is not maintainable and hence, dismissed.

However, nothing expressed in this order shall be construed as an expression of opinion and would result in restraining the applicant herein to seek remedy/agitate before any other forum.