2025 (3) TMI 12 - AT - IBC

NCLAT upholds dismissal of Section 9 application citing pre-existing dispute over soya bean transactions

Straw Commodities LLP Versus Anram Agro Trading Pvt. Ltd.

The NCLAT dismissed an appeal challenging rejection of an application under Section 9 of the Insolvency and Bankruptcy Code, 2016. The appellant sought ... Dismissal of Application filed by the Appellant under Section 9 of the Insolvency and Bankruptcy Code, 2016 against the Respondent, seeking resolution of an outstanding amount - existence of Pre-Existing Dispute between the Parties or not - HELD THAT:- On candidly asking the Appellant as to whether the Appellant has denied the conversation in the grounds of Appeal to have ever happened or in the manner it has happened, to which he could not answer in negative. Thus, once there is no dispute that there has been conversation between the Parties, even on WhatsApp which is a common mode of communication these days, it does not lie in the mouth of the Appellant to contradict the same on the basis of the Judgment in the case of M/s. Kashyap Infraprojects Pvt. Ltd. [2024 (11) TMI 1288 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI - LB]. The Learned Tribunal has categorically observed that there was conversation between the Parties that the rates of Soya Bean have gone down and further recorded the conversation between the Parties to the effect that Appellant wanted to wait for the market to improve and did not receive the goods. The same conversation has been noticed by the learned Tribunal in Para 23 of the Impugned Order. Therefore, the Tribunal has rightly come to the conclusion that there was a Pre-Existing Dispute between the Parties and the process under the Code is being used for recovery for which it is not the appropriate forum. Conclusion - The dismissal of the application upheld, concluding that there was a pre-existing dispute between the parties and that the Code was not the appropriate forum for the claim. There are no reason to interfere in the Impugned Order and hence the present Appeal is hereby dismissed The Appellate Tribunal heard an appeal against the dismissal of an application filed by the Appellant under Section 9 of the Insolvency and Bankruptcy Code, 2016, as the Operational Creditor against the Respondent, seeking resolution of an outstanding amount of 101,89,178.77. The dispute arose from three sale contracts executed between the parties for the supply of agricultural commodities. The Appellant alleged that despite receiving advance payments, the Respondent failed to deliver the goods on time, leading to the outstanding balance amount.The Respondent contended that it had imported the commodities and made payments to suppliers but the Appellant neglected to take delivery despite repeated requests. The Tribunal considered WhatsApp messages exchanged between the parties, indicating a pre-existing dispute. The Tribunal noted that the Appellant proposed to share the loss due to market conditions affecting the sale of commodities, and the Respondent agreed. The Tribunal concluded that the Operational Creditor could not take advantage of its own wrong and that the dispute existed in fact, not being a spurious defense. The Tribunal cited the Supreme Court's decision in Re. Mobilox Innovations Private Ltd vs Kirusa Software Private Ltd regarding the existence of a dispute.The Tribunal further observed that the Operational Creditor failed to lift the commodity due to market conditions and the change of heart of its buyer, as evidenced by the WhatsApp conversations. The Tribunal emphasized that the Corporate Debtor was financially solvent and dismissed the petition, stating that the Insolvency and Bankruptcy Code was not intended to penalize solvent companies for non-payment of disputed dues. The Tribunal held that the petition seemed to be a process of recovery by the operational creditor and was not an appropriate forum for such claims.The Appellant argued that the WhatsApp messages should meet the requirements of Section 65B of the IT Act, citing a relevant case. However, the Tribunal found that the conversation between the parties, including on WhatsApp, was not disputed by the Appellant. Therefore, the Tribunal upheld the dismissal of the application, concluding that there was a pre-existing dispute between the parties and that the Code was not the appropriate forum for the claim.In light of the above analysis and findings, the Tribunal dismissed the appeal without any order as to costs.