J U D G M E N T

(Hybrid Mode)

Per: Barun Mitra, Member (Technical)

The present appeal, preferred under Section 61 of the Insolvency and Bankruptcy Code, 2016 (‘IBC’ in short) arises from the Order dated 31.10.2025 (hereinafter referred to as the ‘Impugned Order’) passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench) in CP(IB) No. 250/AHM/2023. By the said impugned order, the Adjudicating Authority dismissed the Section 9 application filed by the Appellant/Operational Creditor-JS Steel Co. Ltd. seeking initiation of Corporate Insolvency Resolution Process (‘CIRP’ in short) against the Respondent/Corporate Debtor-Amod Stampings Private Limited. Being aggrieved by the dismissal of its Section 9 application and the findings recorded therein, the Appellant has come up in appeal.

2. Coming to the brief factual matrix of the matter at hand, it is relevant to notice that the Appellant-Operational Creditor and the Respondent-Corporate Debtor had entered into a business arrangement since 2021, in pursuance of which the Corporate Debtor had issued a purchase order dated 08.09.2021 to the Operational Creditor for supply of electrical silicon steel sheets. The Operational Creditor thereafter commenced supply of goods which were shipped from abroad and the transactions between the parties were governed by ‘CFR INCO TERMS’. Two of these consignments were shipped by the Operational Creditor from China for which supply, payments were also made by the Corporate Debtor. However, the Corporate Debtor defaulted in making payment for the third consignment sent by the Operational Creditor which was covered under invoice dated 16.09.2022 which was for an amount of USD 353,534.50 (approximately Rs. 2.92 Cr.). These goods had been duly shipped from China and had reached Nava Sheva Port in India. In terms of the agreed payment mechanism, the Banker of the Operational Creditor having forwarded the requisite documents to the Banker of the Corporate Debtor, the payment fell due in October, 2022. The Corporate Debtor had filed the Bill of Entry on 03.10.2022 but allegedly neither took steps to get the goods cleared nor released the payment thereof to the Appellant. The non-payment of the dues was taken up by the Appellant with the Corporate Debtor but as the amounts remained unpaid, the Appellant issued a Section 8 Demand Notice on 26.06.2023 for recovery of outstanding operational debt of USD 353,534.50 with interest thereon. The Corporate Debtor sent a Notice of Dispute on 04.07.2023 raising issues pertaining to the quality of goods supplied for not being in conformity of contractual specification. The Appellant thereafter filed an application under Section 9 of the IBC claiming operational debt alongwith interest. However, the Adjudicating Authority dismissed the Section 9 application vide impugned order dated 31.10.2025 on grounds of pre-existing dispute between the parties. Aggrieved by the impugned order, the present appeal has been preferred by the Appellant-Operational Creditor.

3. Making submissions on behalf of the Appellant, Shri Jagvir Singh Ld. Counsel for the Appellant stated that the Adjudicating Authority had erroneously rejected the Section 9 application when there was a clear default on the part of the Corporate Debtor in making payment of the outstanding dues and invoices. It was also submitted that the Adjudicating Authority had failed to take into consideration the fact that the supplies were made by the Appellant in terms of CFR contract which contract clearly imposes an absolute obligation upon the buyer to take delivery of goods upon loading on the ship. In the present case, since the Operational Creditor had loaded the goods in the ship at the port of shipment, the title of the goods and risk stood transferred to the Corporate Debtor. The debt had therefore become due and payable on the expiry of 7 days from the submission of documents to the Bank. It was contended that the Adjudicating Authority had erred