NCLAT sets aside dismissal of Section 9 IBC application for inadequate evidence consideration

The NCLAT Chennai Bench set aside the lower tribunal's order dismissing an application under Section 9 of the IBC, 2016. The tribunal had rejected the application solely based on the appellant's alleged failure to prove delivery of goods, without considering other evidence including the respondent's lifting of goods from port to plant using its own trucks. The NCLAT found the tribunal failed to examine all available evidence proving transactions between parties and whether defenses could be raised for the first time in reply to Section 9 application. The matter was remanded for fresh consideration of entire evidence on record.

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Issues involved:
The appeal filed by the Operational Creditor under Section 9 of the Insolvency and Bankruptcy Code, 2016, against the Corporate Debtor was dismissed by the Tribunal. The key issue revolves around the proof of delivery of goods and whether the Respondent's objection raised for the first time in the Reply to the Application under Section 9 is valid.

Summary of Judgment:

Issue 1: Proof of delivery of goods
The Appellant, engaged in coal import and trading, supplied coal to the Respondent as per Purchase Orders. The Respondent allegedly took delivery of coal from the Port to its Plant using their trucks. The Tribunal dismissed the Application citing lack of proof of delivery. The Appellant argued that the goods were taken by the Respondent in their trucks, supported by emails and delivery details. The Appellant contended that the Tribunal erred in not considering the evidence and solely focusing on the lack of lorry details and delivery challan.

Issue 2: Objection raised by Respondent
The Respondent, in its Reply to the Application under Section 9, objected that goods were not delivered, hence no debt existed. The Tribunal did not address the issue of whether the goods were actually taken by the Respondent in their trucks. The Appellant argued that the Respondent's objection was raised for the first time in the Reply, without contesting the Notice under Section 8. The Tribunal did not discuss other evidence on record, including emails exchanged between the Parties.

Conclusion:
The Appellate Tribunal allowed the appeal, setting aside the Impugned Order. The matter was remanded back to the Tribunal for reconsideration, emphasizing the need to evaluate all evidence on record. The Tribunal was directed to provide findings on the sufficiency of evidence for admitting the Application. The Parties were instructed to appear before the Tribunal for further proceedings on 05.01.2024.

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