Authority: National Company Law Tribunal Bench VI, New Delhi

Order Date: 15 July 2026

Case Overview

This order pertains to a Company Petition (CP IB-6/ND/2025) filed by M/s. Seaway Paper and Pulp Ltd. (Operational Creditor) against M/s. Devpriya Industries Pvt. Ltd. (Corporate Debtor/Respondent) under Section 9 of the Insolvency and Bankruptcy Code, 2016. The petition sought the initiation of a Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor for failing to pay an operational debt of ₹3,49,40,891.87, with a stated date of default of 21.04.2024.

The debt arose from a contract dated 17.11.2023 for the sale of recovered paper. The Operational Creditor alleged that the Corporate Debtor failed to purchase shipping documents and take delivery of a 248.35 MT consignment, which arrived at ICD Palwal on 07.04.2024, leading to stranded goods and accruing detention and demurrage charges. A demand notice under Section 8 of the IBC was issued on 16.08.2024 for ₹2,96,86,690, which the Corporate Debtor disputed via a reply dated 03.09.2024.

The Corporate Debtor contested the petition on two primary grounds. First, it argued that a pre-existing dispute existed, contending that the Operational Creditor was responsible for the delayed arrival of the consignment (which breached the contractual delivery date of 31.12.2023) and for failing to pay resultant port charges, which prevented the Corporate Debtor from taking delivery. Second, it argued that the application was not maintainable as the principal value of the goods (USD 42,219 or approx. ₹35.51 lakhs) fell below the minimum threshold prescribed under Section 4 of the IBC.

The tribunal's analysis centered on email correspondence between the parties. It noted that the Operational Creditor, via an email dated 02.02.2024, had itself acknowledged the delay and agreed to bear the detention and demurrage charges. This was reaffirmed in a subsequent email on 25.04.2024, where the Operational Creditor requested invoices for these charges. The tribunal found this exchange demonstrated a genuine, pre-existing dispute over liability for the additional costs, which arose well before the statutory demand notice was sent.

Final Outcome

The bench, comprising Justice Jyotsna Sharma (Judicial Member) and Ms. Anu Jagmohan Singh (Technical Member), dismissed the petition. The dismissal was based on two conclusive findings: (1) the existence of a pre-existing dispute between the parties concerning the delay and liability for port charges, and (2) the fact that the principal debt amount was below the threshold limit required to admit an application under the IBC. The petition was therefore held to be non-maintainable.

Topics: Insolvency Petition, Pre-Existing Dispute, Operational Debt