Case Overview

The petition was filed by Kokila Mining Private Limited (Operational Creditor) under Section 9 of the Insolvency and Bankruptcy Code, 2016 against Tycoons Industries Pvt. Ltd. (Corporate Debtor) for initiation of Corporate Insolvency Resolution Process (CIRP).

The Operational Creditor is engaged in providing heavy mining equipment including Tippers and Excavators on contractual service basis. The Corporate Debtor is engaged in coal mining operations at NTPC coal mines, Chattibariatu, Hazaribag, and ECL coal mines, Chapapur, Dhanbad, Jharkhand.

The business relationship commenced with a Work Order dated 10.08.2022 (No. CBCMPL/22-23/TIPPER/0010) for provision of equipment on lease basis. A second Work Order was issued on 01.07.2023 with revised rates covering the period until 20.06.2025.

The Operational Creditor raised invoices totaling Rs. 18,53,62,218/- against which the Corporate Debtor made payments and adjustments of Rs. 7,51,39,162/-. On 01.04.2024, a Reconciliation Statement cum Balance Confirmation was prepared and signed by Mr. Joy Deb Chatterjee, Director of the Corporate Debtor, acknowledging an outstanding balance of Rs. 11,02,23,056/- as payable as on 31.03.2024.

After work stopped on 30.04.2024 due to non-payment, the Operational Creditor issued a Statutory Demand Notice under Section 8 of the Code dated 19.07.2024. The Corporate Debtor failed to raise any dispute or make payment within the statutory period of ten days. National E-Governance Services Limited (NeSL) confirmed the Record of Default as "Deemed to be Authenticated" on 17.08.2024. A subsequent payment of Rs. 30,00,000/- was received from the Corporate Debtor's vendor, reducing the outstanding balance to Rs. 10,72,23,056/-, still exceeding the statutory threshold of Rs. 1 Crore.

The Corporate Debtor contested the petition, claiming the debt was disputed and inflated. Their defenses included: machinery breakdowns and failure to meet guaranteed working hours; alleged GST discrepancy showing actual deposits of Rs. 26,34,300/- against claimed Rs. 2,80,09,406/-; claims that Adhunik Power and Viraj Steel (alleged group entities) owed them money that should be adjusted; and contention that the outstanding balance was actually Rs. 79,71,690.06 after all adjustments, below the statutory threshold.

The Tribunal examined whether there was a genuine pre-existing dispute predating the demand notice, applying the test established in Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd.

Final Outcome

The NCLT admitted the petition and initiated CIRP against Tycoons Industries Pvt. Ltd. with the following directions:

1. Moratorium declared under Section 14 of the Code effective immediately

2. Mr. Neehal Mahamulal Pathan (Registration No. IBBI/IPA-001/IP-P01561/2018-19/12406) appointed as Interim Resolution Professional

3. Powers of Board of Directors suspended and vested in IRP under Section 17

4. IRP to take custody of all assets and manage operations as going concern

5. Operational Creditor directed to pay advance of Rs. 4,00,000/- to IRP for initial CIRP costs

6. Public announcement of CIRP to be made within three days

7. Supply of goods/services to Corporate Debtor not to be terminated during moratorium

The Tribunal found that the signed Reconciliation Statement dated 01.04.2024 constituted strong prima facie evidence of debt, the demand notice was duly served, and no genuine pre-existing dispute was demonstrated through contemporaneous documentary evidence predating the demand notice.

Topics: Insolvency Proceedings, Operational Debt, Corporate Default