Invoice-based operational debt u/s 9 IBC and Section 10A bar-creditor blocked from adding invoices; dismissal upheld.

The dominant issue was whether a Section 9 IBC application could be sustained by enlarging the set of invoices asserted to fall outside the Section 10A bar, and whether the AA erred in rejecting the petition despite the operational debt exceeding the Section 4 threshold. The Appellate Tribunal held that the operational creditor, having expressly pleaded that only 7 invoices (?1.65 crore) were not hit by Section 10A, was estopped from subsequently adding further invoices to inflate default; reopening invoice segregation would amount to impermissible shifting of the goalposts and misuse of IBC as a recovery tool. As the corporate debtor had deposited ?1.65 crore by FDR with the NCLT Registry, rejection of the Section 9 application was upheld and the appeal dismissed, with liberty to pursue civil remedies for Section 10A-period claims.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether, for deciding a Section 9 application post-remand, the Operational Creditor could re-segregate and expand the set of invoices claimed to fall outside the protective ambit of Section 10-A, contrary to the invoice categorisation and quantum expressly pleaded in its own Section 9 application and reflected in earlier orders.

(ii) Whether rejection of the Section 9 application was justified where the Corporate Debtor tendered (and deposited with the Tribunal Registry) the entire operational debt amount that was pleaded as enforceable (i.e., outside Section 10-A), and the Operational Creditor refused to accept it while insisting on a higher amount by revising the enforceable invoice set.

(iii) Whether liabilities covered by Section 10-A were extinguished, or merely rendered unenforceable in Section 7/9 proceedings, and what remedy remained available to the Operational Creditor for such invoices.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Permissibility of altering the pleaded invoice segregation/quantum vis-à-vis Section 10-A

Legal framework (as discussed): The Court proceeded on the premise that Section 10-A creates a "protective shield" in respect of certain defaults, making them not actionable under Section 7 and Section 9 proceedings during the barred period, while invoices outside that ambit could sustain a Section 9 claim.

Interpretation and reasoning: The Court found that the Operational Creditor itself had filed the Section 9 application relying on 60 invoices split into two tables: 53 invoices in one table treated as hit by Section 10-A and 7 invoices in another table treated as outside Section 10-A, aggregating to Rs. 1.65 Cr for the enforceable portion. This exact segregation was reflected in the Adjudicating Authority's earlier order and in the Tribunal's remand order. The remand did not interfere with, nor reopen, the pleaded invoice list or classification. After remand, the Operational Creditor had not challenged this categorisation, and only later sought to add two invoices from the earlier "barred" table by asserting that, due to credit terms, their payable dates fell beyond the Section 10-A period. The Court held this to be an impermissible contradiction of its own pleadings, amounting to "shifting the goal-post" and an attempt to "improve" the case by inflating the quantum of default to pressure the Corporate Debtor.

Conclusion: The Operational Creditor was not permitted to alter, modify, expand, or re-segregate the invoices beyond what it had originally pleaded in the Section 9 application; the enforceable operational debt, for Section 9 purposes in this case, remained confined to the 7 invoices aggregating to Rs. 1.65 Cr as originally admitted by it.

Issue (ii): Effect of tender/deposit of the admitted enforceable amount and refusal by the Operational Creditor-misuse of Section 9 as recovery tool

Interpretation and reasoning: The Court noted that the Corporate Debtor offered to pay the entire Rs. 1.65 Cr corresponding to the 7 invoices undisputedly outside Section 10-A and, pursuant to directions, deposited the amount in an interest-bearing fixed deposit with the Tribunal Registry. This was treated as demonstrating bona fides to discharge the enforceable liability and also as indicative of financial solvency. The Operational Creditor's refusal to accept the amount, coupled with its insistence on a higher figure premised on an impermissible reclassification of invoices, was held to show that the insolvency process was being invoked as a "coercive recovery tool" rather than as a mechanism aligned with the object of the IBC. In these circumstances, the Court agreed that it would not be in consonance with IBC objectives to "drag" the Corporate Debtor into insolvency when the enforceable portion stood fully tendered/deposited.

Conclusion: The rejection of the Section 9 application was upheld because the Corporate Debtor had deposited the entire enforceable amount (as per the Operational Creditor's own pleaded segregation), and the Operational Creditor's refusal to accept it, while seeking to enlarge the enforceable claim, amounted to misuse of the insolvency process.

Issue (iii): Nature of Section 10-A protection and availability of alternate remedies

Interpretation and reasoning: The Court expressly clarified that the Section 10-A "protective shield" does not extinguish or wipe out the underlying liability; it only renders such liability unenforceable in Section 7 and Section 9 proceedings. Consequently, claims arising from invoices falling within the Section 10-A period could not be pursued through Section 9 but could be pursued through civil remedies.

Conclusion: Liabilities within the Section 10-A period were held not to be extinguished, but only not actionable under Section 9; the Operational Creditor retained liberty to pursue other remedies in accordance with law for such amounts.

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