Corporate Debtor Being an Agent Not Responsible For Non-Supply of Materials by Third Party: NCLT

The Mumbai bench of the National Company Law Tribunal (NCLT) ruled that a corporate debtor acting as an agent is not responsible for the non-supply of materials by third parties. The bench dismissed a Corporate Insolvency Resolution Process (CIRP) petition filed by JM Steels against Nirav Metals Pvt. Ltd. for ?3.63 crores. The operational creditor paid an advance for materials that were not delivered. The corporate debtor argued it was merely an agent between the creditor and the actual supplier, Orbit Electromech India Pvt. The Tribunal found a pre-existing dispute and ruled that the corporate debtor was not liable for the non-supply.