Authority: National Company Law Tribunal, Bengaluru Bench
Order Date: 09.10.2026
Case Overview
This case involves a petition filed by Operational Creditor (OC) APL Apollo Tubes Limited under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Corporate Debtor (CD) Tanisha Scaffolding (India) Private Limited for an alleged default in payment of an operational debt amounting to ₹30,43,360/- (comprising a principal of ₹27,16,215 and interest of ₹3,27,145). The debt was claimed against three unpaid invoices: No. 0000000721 (01.06.2017) for ₹7,85,106, No. 0000000804 (16.06.2017) for ₹9,39,614, and No. 0000000102 (20.06.2017) for ₹9,91,495. The OC stated that a demand notice was issued on 01.02.2018 and served on 05.02.2018, to which no reply or notice of dispute was received from the CD within the statutory period.
The CD categorically denied the very existence of the transactions underlying these three invoices, contending that all business with the OC concluded and was settled by March 2017. The CD alleged the invoices were false and fabricated, and that no goods were supplied or purchase orders placed for the dates in question. This petition was initially dismissed by the NCLT on 05.09.2019, but the NCLAT remanded the matter for fresh consideration on 11.06.2024, directing that the CD be given an opportunity to file objections.
The Tribunal's analysis centered on whether a pre-existing, genuine dispute existed. It noted the foundational nature of the CD's denial, which challenged the existence of the transactions themselves. The OC relied on its ledger entries and invoices but failed to produce critical supporting evidence such as delivery challans, proof of receipt of goods by the CD, GST returns reflecting these specific supplies, or any contemporaneous written communication regarding these June 2017 transactions. Crucially, the Tribunal examined the OC's own Balance Sheet and found that 'Trade Receivables' were shown as NIL, with no specific entry identifying the CD as a debtor. Similarly, the CD's financials did not reflect any trade payables to the OC.
The Tribunal applied the principle from the Supreme Court's Mobilox judgment, concluding that the CD's defence was not spurious, hypothetical, or illusory but raised a plausible dispute regarding the existence of the debt. In a summary jurisdiction like Section 9 of the IBC, the Adjudicating Authority cannot undertake a detailed trial to resolve such fundamental factual disputes over whether a transaction occurred.
Final Outcome
The petition (C.P. (IB) No. 116/BB/2018) was dismissed. The NCLT held that the Operational Creditor failed to establish the existence of an undisputed operational debt and default, as a genuine pre-existing dispute was found to exist. The dismissal order expressly states that it does not preclude the Operational Creditor from pursuing other appropriate legal remedies (such as a civil suit for recovery) that may be available to it.
Topics: Insolvency Petition, Disputed Debt, NCLT Proceedings