Back
2025 Supreme(Online)(NCLT) 67
NATIONAL COMPANY LAW TRIBUNAL
Shri. Prabhat Kumar, Justice V. G Bisht, JJ
Matha Metals and Sands – Appellant
Versus
KEC INTERNATIONAL LIMITED – Respondent
C.P. (IB) - 103/2025
For the Petitioner:Ajinkya Kurdukar
A petition under Section 9 of the Insolvency and Bankruptcy Code is unmaintainable if a pre-existing dispute exists regarding the operational debt.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 9 - Corporate Insolvency Resolution Process - Petition filed by Operational Creditor for non-payment of operational debt of Rs. 1,72,95,359.19/- - Corporate Debtor contended that payments were made and disputes existed regarding documentation - Court found that the Operational Creditor failed to provide necessary Royalty challans, indicating a pre-existing dispute - Petition dismissed due to non-occurrence of default. (Paras 2, 3, 5, 13, 15)
(B) Pre-existing dispute - The existence of a dispute prior to the issuance of demand notice under Section 8(1) of the Code renders the petition premature and unmaintainable. (Paras 3, 4)
Facts of the case:
The Operational Creditor claimed Rs. 1,72,95,359.19/- from the Corporate Debtor for goods supplied, while the Corporate Debtor argued that payments were made and required documents were not provided, thus disputing the claims.
Findings of Court:
The Operational Creditor did not provide necessary Royalty challans, and payments made by the Corporate Debtor indicated diligence in processing invoices.
Issues: Whether the Operational Creditor had established a default and if there were pre-existing disputes that rendered the petition unmaintainable.
Ratio Decidendi: The court ruled that the failure to submit required Royalty documents created a pre-existing dispute, making the petition premature under Section 9 of the Code.
Result: Petition dismissed.
ORDER
1. The instant petition is filed by Matha Metals and Sands (“Petitioner’/‘Operational Creditor”) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“Code”) Code r/w Rule 6(1) of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (“IBBI Rules”) to initiate Corporate Insolvency Resolution Process (“CIRP”) against M/S KEC International Limited (“Respondent/Corporate Debtor”) for non- payment of Operational Debt of Rs. 1,72,95,359.19/- (Rupees One Crore Seventy-Two Lakhs Ninety-Five Thousand Three hundred and Fifty-Nine Only), inclusive of interest.
Particulars of the Parties:
1. The Operational Creditor, Matha Metals and Sands (Sole Proprietor Mr. Justin K. George, PAN: ADKPG8256B), is a ‘Micro’ enterprise under the Micro, Small and Medium Enterprises Development Act, 2006 (“MSME Act, 2006”), having its registered office at Chamarajanagar, Mukkadahally, Karnataka- 571 128. The Operational creditor is engaged in the business of supply of sands, stones, clays and related products.
2. The Corporate Debtor, M/S KEC International Limited (CIN: L45200MH2005PLC152061), incorporated on 18.03.2005 under the Companies Act, 1956 is having its registered office at RPG House 463, Dr. Annie Basant Road, Worli, Mumbai-400 030 there fore, this Bench has jurisdiction to deal with this application. The Corporate debtor is engaged in the manufacture of electric power transmission towers along allied services.
Submissions made by the Petitioner:
3. The Operational creditor submits that, the Corporate debtor had approached the Operational creditor for supply of goods which were supplied by them in ordinary course of business. The Corporate debtor had issued purchase order for the procurement of goods from June 2023 to July 2024, the details of which are given as below:
| Sr. No. | Purchase Order Number | Date |
| 1 | 7400055883 | June 16,2023 |
| 2 | 7400056162 | June 26, 2023 |
| 3 | 7400062634 | January 8, 2024 |
| 4 | 7400066383 | April 23, 2024 |
| 5 | 7400068859 | July 1, 2024 |
| 6 | 7400068854 | July 1, 2024 |
| 7 | 7400068956 | July 10, 2024 |
4. The Operational Creditor submits that the said purchase orders are duly accepted and the Corporate debtor had not raised any grievance with respect to the quantity or quality of the goods, thus reporting that the goods were accepted by the Corporate debtor without any protest or demur.
5. The Operational Creditor further submits post supply of the goods, tax invoices were issued to the Corporate debtor which were also duly acknowledged by the Corporate debtor. In pursuance to the said invoices, the Corporate debtor has sporadically made part payments as evidenced from the ledger of the Corporate debtor in the books of the Operational creditor.
6. It is further submitted by the Operational creditor that multiple email correspondences were shared to the Corporate debtor to release the entire lawful dues as opposed to paltry payments made by them. Furthermore, the Operational creditors had issued statutory demand notice in Form 3 as on 19.09.2024 due to the constant non-payment of the operational dues, and the same is duly received by the Corporate debtor. However, the Corporate Debtor has failed to clear the outstanding operational debt.
7. The Operational creditor further reports that post issuing the Demand notice, the Corporate debtor made a payment of Rs. 16,23,897.48/- hence there was an acknowledgment of debt. Despite, having acknowledged the debt and admitting the part payments towards the outstanding liability, the Corporate debtor issued a vague and evasive interim reply dated 01.10.2024.
8. In Part IV to the present petition, the Operational creditor states that the total amount of default is Rs. 1,72,95,359/- (Rupees Five Crores Twenty Six Lakhs Fifty Four Thousand and Thirty-Nine Only) inclusive of the interest as provided in the MSME Act, 2006 calculated from the date of each invoice till the date of realization. The Operational creditor submits that there are two dates of default i.e. 08.07.2023 (15 days from the 1st invoice) & 31.07.202
