# In the matter of Varun Beverages Limited C.P. No. IB-1016  (ND)-2019

> NCLT judgment dated 2019-12-17. Citation: TCN-2019-NCLT-00144. The case involves an application filed by Ms. Renu Shukla, a partner in Mahadeo Traders,…

- **Court:** NCLT
- **Order date:** 17 Dec 2019
- **Citation:** TCN-2019-NCLT-00144
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/varun-beverages-limited-cp-no-ib-1016-nd-2019-151206d7

## Summary

### Background

The case involves an application filed by Ms. Renu Shukla, a partner in Mahadeo Traders, seeking to initiate a corporate insolvency resolution process against Varun Beverages Limited under Section 9 of the Insolvency and Bankruptcy Code, 2016. Mahadeo Traders claimed that Varun Beverages owed them Rs. 38,90,000/- plus interest, related to investments made for a distributorship agreement with Pepsico. The corporate debtor, Varun Beverages, denied the existence of the debt, claiming that Mahadeo Traders' claim was for recovery of investment and damages due to alleged termination of the distributorship.

## Facts

Ms. Renu Shukla, a partner in the partnership firm M/s. Mahadeo Traders, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate a corporate insolvency resolution process against M/s. Varun Beverages Limited. Mahadeo Traders claimed that Varun Beverages owed them Rs. 38,90,000/- plus interest, representing investments made to fulfill the requirements for a sole distributorship agreement with Pepsico. These investments included expenses for preparing a shed, security deposits, purchase of a Tata Truck, and cash investments. A distributorship agreement existed between the operational creditor and Pepsico, granting sole distribution rights to Mahadeo Traders. Varun Beverages allegedly took over the business interest of distributing

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## Issues and analysis

### Issue 1: Whether the Petitioner can claim to be an Operational creditor under the Distribution Agreement …

**Ratio:** An operational creditor is defined under the IBC as a person to whom an operational debt

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**Reasoning:** The court found that the petitioner's claim was not for goods or services provided to the

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**Interpretation:** The court interpreted the definition of 'operational creditor' under the IBC to

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**Application:** The court applied this interpretation to the facts, finding that the

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## Parties

- **Judges:** (Dr.) P.S.N…; V.K. SUB…
- **Appellants:** M/S Renu…
- **Respondents:** Varun Beverages…

## Timeline

- **2013-08-28 — Formation of Partnership…**: Mahadeo Traders, the partnership firm, was formed with two partners, Smt. Renu Shukla and…
- **2015-02-24 — Distribution A…**: Distribution Agreement dated 24.02.2015 executed between the firm Mahadev Traders and the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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