TaxTMI 
TaxTMI 
2025 (4) TMI 1404
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.... goods, being plastic injection moulds, were delivered with proper invoices and duly acknowledged delivery challans. No disputes were raised at the time of supply. Despite multiple reminders and a statutory Demand Notice, the Respondent failed to make the payment. The NCLT dismissed the Section 9 Petition on the ground that the claim was motivated by personal disputes between the parties, specifically the matrimonial dispute between Mr Nilesh Dahanukar (partner of the Appellant) and Mrs Sheetal Dahanukar (director of the Respondent), and allegations of oppression and mismanagement by minority shareholders. The NCLT imposed a cost of Rs. 10 lakh on the Appellant for filing a frivolous and vexatious Petition. The Appellant contends that the NCLT erred in dismissing the Section 9 Petition based on personal disputes, which do not qualify as a "dispute" under Section 5 (6) of the Code. It is claimed that the Code mandates that the dispute must relate to the existence of the debt, quality of goods, or breach of representation or warranty. The disputes raised by the Respondent were unrelated to these criteria. The Corporate Debtor admitted the debt and default, and there was no objection ....
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....dates that the "dispute" ought to be a dispute in relation to existence of the amount of debt; quality of goods or services; or the breach of a representation or warranty. Section 5 (6) of the Code defines "dispute" as under: "(6) "disputes" includes a suit or arbitration proceedings relating to- (a) the existence of the amount of debt (b) the quality of goods or service (c) the breach of a representation or warrant" Section 4 (11) of the Code defines "debt" as a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. Section 4 (12) of the Code defines "default" as non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not paid by the Debtor or the Corporate Debtor, as the case may be. In view of above, the non-payment of invoice amount by the Respondent post supply of goods pursuant to the Work Order constitutes a legal and valid "debt" under the Code. 5. The dispute alleged by Mrs Sheetal Dahanukar, one of the directors of the Respondent-CD-Plastomax Engineering were not "disputes", and they fall outside Section....
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....tition seeking insolvency of its own Company. Thus, Section 9 Petition was liable to be admitted at the threshold. 7. Despite having received the emails dated 25.08.2022 and 09.11.2022 and also Demand Notice dated 29.11.2022, the Intervenor/Director of the Respondent did not dispute the transaction with the Appellant against which payment was sought nor had filed any suit/litigation claiming that the Appellant had forged and fabricated the Works Orders as alleged to contest the Section 9 Petition. Further, the Appellant had deposited GST payment to the tune of Rs 18,57,420/- on the basis of e-way bills for the material supplied to the Respondent/Corporate Debtor. The Appellant would not have deposited such a hefty sum only to cause harassment to the wife. Submissions of Respondent No 2 8. Bases the materials placed on record, we note the contentions of the Respondent's Director-Mrs. Sheetal Dahanukar - intervener in original application before the adjudicating authority. 9. The Petitioner and the Respondent Company have direct nexus with each other and effectively are governed and controlled by same set of people. As such the Deponent has not even been provided the ....
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....arly shows the extremely close nexus between the Petitioner and the Respondent Company as well as their management and operations, which are being run by the same email id for the convenience of Nilesh who in fact runs the Respondent Company as well making it easy for Nilesh to create fake paperwork forming the basis for the present frivolous proceedings. 13. Further, the registered address of the Respondent Company viz. Flat No. 7, Shriram Appt, PNO-37 Anandwan Colony, Nashik - 422007, Maharashtra, as shown in the master data of the Respondent Company, is in fact the personal residential address of Nilesh viz. the partner of the Petitioner firm. This further clearly shows the extremely close nexus between Nilesh and the Respondent Company as well as their management and operations. which are being run from the same address for the convenience of Nilesh who in fact runs the Respondent Company as well making it all the more easier for Nilesh to create fake paperwork forming the basis for the present frivolous proceedings given his control over the registered address of the Respondent Company entities and their paperwork/documentation maintained at one and the same address. 14.....
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....ent's Director-Mrs. Sheetal Dahanukar digital signature which was kept in registered office of the Company. 19. The entire mischief has been played by Nilesh viz. partner of Petitioner firm only to wreak havoc in the life of wife i.e. Director of the Respondent Company and exact revenge against her due to the ongoing matrimonial disputes between Nilesh and Respondent's Director-Mrs. Sheetal Dahanukar. Nilesh and Respondent No. 2 are currently going through a nasty divorce and several other ancillary matrimonial and criminal proceedings related to the matrimonial disputes and the same are now pending. 20. The bitterness of the partner of the Petitioner firm viz. Nilesh becomes clear from the fact that almost all of the Work Orders and invoices forming the basis of the captioned Petition are dated after April 2021 viz. after the date on which disputes between Nilesh and Respondent No. 2 grew toxic and strenuous and she left her matrimonial house viz. the registered address of Respondent Company as mentioned above. The timing of the said invoices and work orders clearly show that all of it has been done by Nilesh in his spite against Respondent No. 2 over our matrimonial....
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.... then revive the Company and operate it by kicking Respondent No. 2 out or to make sure the same exists just on paper with no money and/or assets making it impossible for Respondent No. 2 to run the Respondent Company even after its revival and completion of CIRP proceedings, if at all. 24. Before the Demand Notice was raised by the Petitioner, there were mediation talks going on between Respondent No. 2, Nilesh, Ashwini and Gaurang wrt buying of Respondent No. 2's shares. However, the Petitioner, along with Ashwini and Gaurang, has resorted to this method for kicking the Deponent out of the Respondent Company. Further, the nexus is clearly established as Ashwini and Gaurang replied to the Legal Notice and failed to appear before this Tribunal on behalf of the Respondent Company. 25. On the one hand Nilesh is trying to make sure that the insolvency of the Respondent Company goes through by showing that the Respondent Company is unable to pay its dues and is trying to reduce Respondent No. 2's financial standing down to zero and on the other hand is taking a stance in the maintenance proceedings (filed by me) decided before the Family Court, Nashik, that Respondent No. 2 i....
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....t of the same completely on the Director, that is, Respondent No. 2. All of this highlights a clear scheme of fraudulently creating claims and filing the present frivolous petition against the Respondent Company only to corner Respondent No. 2 and put the brunt of losses and repayment of loan singly on Respondent No. 2. 28. Furthermore, Respondent No 2 claims that the partners of the Petitioner along with the other Director and Gaurang have conspired together by creating fake bills, documents and misusing the official documents of the Respondent Company and used fake bills etc. without her knowledge and consent. Furthermore, it is claimed that many financial documents, transactions documents etc. were signed with Respondent No 2's digital signature without her knowledge and consent. Hence, Respondent No 2 has also filed a police complaint to Officer-in-Charge/Senior Police Inspector, Kasarvadavli Police Station, Thane, 400615, on 01.06.2023 via email. 29. Also, another matter was pending before the Micro Small Medium Enterprise Facilitation Council, wherein the Council was dealing with similar cause of action and similar amounts had been claimed by the Petitioner herein befor....
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....ledged by the Respondent-CD-Plastomax Engineering on 12.12.2022 admitting the debt but offering frivolous pleas regarding non-payment. In its reply to the demand notice dated 12.12.2022, the Respondent acknowledged the delivery of goods but claimed that the payment was contingent on the Respondent becoming profitable, which constitutes an acknowledgment of debt. Despite multiple reminders and a statutory demand notice under Section 8 of the IBC, the Corporate Debtor failed to make the payment for the goods supplied. 33. On 24.01.2023, the Appellant filed the Section 9 Petition for initiating CIRP against the Corporate Debtor due to the default in the payment of Rs.1.27 crore. However, on 25.01.2023, the Respondent's Director-Mrs. Sheetal Dahanukar- who is the wife of Director of the Appellant firm filed a counter petition under Section 241-242 of the Companies Act, 2013, to address shareholder disputes and involving the partner of the Appellant as a party. On 31.10.2023, Mrs. Sheetal Dahanukar filed an Intervention Application (No. 60 of 2023) seeking to intervene in the Section 9 Petition and raise objections against it. 34. On 11.12.2024, the NCLT - Adjudicating Authori....
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.... Allowing the Section 9 Petition and initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. Setting aside the imposition of costs of INR 10 lakh. Directing the Respondent to pay the outstanding debt of INR 1.27 crore along with interest as per the applicable terms. 37. We have heard the Learned Counsel for the Appellant and also perused the material on record. 38. Application on behalf of Appellant under Section 61(2) of the Insolvency & Bankruptcy Code was filed read with Rule 11 of National Company Law Appellate Tribunal, 2016 seeking condonation of delay of 9 days in filing of the appeal arising out of impugned order dated 11.12.2024. This was condoned vide order dated 21.02.2025. 39. While going through the Section 9 Application, we find that Mr. Nilesh Dahanukar, partner of the Petitioner firm, is the husband of the Intervener, Mrs. Sheetal Dahanukar, who is a director of the Respondent Company. Furthermore, Mr. Nilesh Dahanukar has been acting as the Secretary of the Respondent Company. We find close nexus between the Appellant Firm and the Respondent Company as is evident from the Agreement for Term Loan cum H....
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...., it has come to light that, as contented in the reply, "Mrs. Sheetal Dahanukar never attended any of the meetings of the Company and all the decisions of the Company were taken by NPD ("Nilesh Dahanukar")". Further, it was also contented in the said reply that "NPD insisted that Ashwini Ghodi should sign back dated purchase orders and raised various invoices to the Company". The relevant extract from the reply of the Respondent-CD-Plastomax Engineering dated 12th December 2022 is as below: "... 7. However, since May 2021, the operations of the Company were obstructed owing to the personal disputes between NPD and NPD's wife Mrs. Sheetal Dahanukar who is named as a director/shareholder of the Company. It is pertinent to state that Sheetal Dahanukar never attended any of the meetings of the Company and all the decisions of the Company were taken by NPD. This is evident from various email correspondences sent by NPD with the Company and Mr. Gaurang Ghodi that NPD was de facto a shareholder and director of the Company. Meanwhile, Ashwani Ghodi kept on investing money in the Company. 8. In June 2021, NPD attempted to transfer the shares held in the name of Sh....
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.... We have appointed Agram Legal Consultants to reply to the notice sent by Om-Sai Moulds And Plastics, this 1s for your information. They have also replied to the notice send by Om-Sai Moulds And Plastics via MSME, please note. Regards, Gaurang P. Ghodi Thus, in view of the abovementioned email, we find that there exists a nexus between the partner of Pan Products, Mr. Gaurang Ghodi, and the Respondent Company and Mr Nilesh who is the Director of Appellant-OC-Om Sai. In view of the aforementioned email dated 03.01.2023 and the Purchase Orders dated 27.10.2021 and 13.06.2022, which are signed by Mr Ghodi, we find that Mr. Gaurang Ghodi is also involved in the day-to-day internal affairs and workings of the Respondent-CD-Plastomax Engineering, to such an extent that Mr. Gaurang Ghodi was in a position to send official emails and even sign Purchase Orders on behalf of the Respondent Company. 43. We also note that Mrs. Sheetal Dahanukar, the intervener, in January 2023, has filed an Oppression and Mismanagement Petition with Company Petition No. 66 of 2023 before the NCLT under Sections 213, 241 to 242 of Companies Act, 2013. This was against oppression ....
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....operational creditor under Section 5(20) of the IBC, and accordingly claims that the debt is clearly an operational debt arising from the supply of goods to the Respondent. It claims that the personal and matrimonial disputes raised by the director of the Respondent do not constitute a "dispute" as per Section 5(6) of the IBC. And the IBC defines a "dispute" as one related to the existence of the debt, quality of goods/services, or breach of warranty or representation, none of which are applicable to the alleged personal disputes between the parties. The disputes raised by Mrs. Sheetal Dahanukar were personal in nature (e.g., matrimonial issues and shareholder oppression) and not related to the operational debt or quality of goods supplied. It claims that the NCLT erroneously lifted the corporate veil to consider personal disputes, which are irrelevant to the determination of operational debt and default and against the statutory requirements for filing a Section 9 Petition. It is also claimed that the Respondent did not raise any valid dispute about the debt, and the alleged disputes are related to personal matters such as matrimonial discord and shareholder disputes, which do not....
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.... creditor and the Respondent-CD-Plastomax Engineering are interrelated as the OC has the husband as its Director [Mr Nilesh] and his wife [Sheetal] is the Director of CD. Furthermore, Mr Nilesh is also the Secretary of the Respondent-CD-Plastomax Engineering. Thus, we find that Nilesh had plenty of access not only to the Respondent Company (given the ownership cum governing structure mentioned in the foregoing paragraphs) but also Petitioner as well as the documentation pertaining to the business relationship/transactions between the Petitioner and the Respondent Company. Furthermore, Nilesh had access to registered office of the Company and to Company's seal, stamp and letterheads and he also had access to Respondent's Director-Mrs. Sheetal Dahanukar's digital signature which was kept in registered office of the Company. 49. Both husband and wife were having matrimonial disputes and have filed criminal complaints and counter complaints against each other- which have not been disputed by the Appellant. Also, a case of forgery has been filed by Respondent No. 2 against Appellant-OC-Om Sai's Director Mr Nilesh and proceedings are underway. Since the Director of the operati....