Case Note & Summary
The appeal was filed under Section 61 of the Insolvency and Bankruptcy Code, 2016, against an order dated 04.07.2025 by the National Company Law Tribunal, Jaipur Bench, which admitted a Section 9 application for initiating Corporate Insolvency Resolution Process (CIRP) against M/s Jhandewalas Foods Limited. The Corporate Debtor had business dealings with Param Dairy Limited, which claimed an operational debt of Rs. 3.83 Cr, including principal and interest, due to unpaid invoices for butter and ghee supplied. The Corporate Debtor disputed the claim, citing pre-existing disputes regarding the quality of goods and accounting discrepancies. The Adjudicating Authority rejected these disputes and admitted the application, leading to the present appeal by the suspended management of the Corporate Debtor. The Appellant argued that the admission of the application was erroneous due to substantial pre-existing disputes, including the supply of defective goods and failure to adjust returned items in the ledger. The Respondent contended that the disputes were fabricated to delay proceedings and that the Corporate Debtor acknowledged the debt through part payments. The Tribunal analyzed the evidence, including laboratory test reports and correspondence, concluding that no genuine pre-existing dispute existed prior to the Demand Notice. The Tribunal upheld the Adjudicating Authority's decision, stating that all conditions for triggering CIRP were met, and dismissed the appeal without costs.
Headnote
A) Insolvency Law - Admission of Section 9 Application - Pre-existing Dispute - No genuine pre-existing dispute discernible - Insolvency and Bankruptcy Code, 2016, Section 9 - The Adjudicating Authority admitted the Section 9 application as there was no credible evidence of a pre-existing dispute prior to the Demand Notice, fulfilling all requisite conditions for triggering CIRP. Held that the appeal was dismissed as no substantial dispute existed (Paras 1-20).
Issue of Consideration
Whether there was any discernible pre-existing dispute surrounding the debt claimed to be due and payable by the Corporate Debtor which exceeded the threshold limit of Rs.1 Cr.
Final Decision
The Tribunal dismissed the appeal, upholding the Adjudicating Authority's order admitting the Section 9 application, stating that all requisite conditions for triggering CIRP were fulfilled. The appeal was dismissed without costs.
Law Points
- Insolvency and Bankruptcy
- Corporate Insolvency Resolution Process
- Pre-existing Dispute
- Operational Debt
- Demand Notice
