Authority: National Company Law Tribunal (NCLT), Ahmedabad Bench (Court-II)

Order Date: 06 July 2026

Case Overview

This petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) by M/s Jayhind Steel Traders (Operational Creditor) against M/s Kruti Power Projects Private Limited (Corporate Debtor) on 24 February 2025. The Operational Creditor sought initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor over an alleged unpaid operational debt for the supply of steel materials including MS Angle, Channel, beams, plates, wire nails, and RCC Block Covers. The supplies were made based on oral purchase orders and telephonic instructions for projects including Kutch Power Limited - Mundra, Renew Power Project Ltd - Dholera, Godrej - Bhuj, Hitachi Hi Rel Power - Sanand, and Trutzher India Pvt Limited, between 27 December 2023 and 22 June 2024.

The Operational Creditor claimed a total outstanding debt of ₹1,44,92,921.79, comprising a principal amount of ₹1,22,36,127.22 and interest of ₹22,56,794.57 calculated at 24% per annum as per the invoices. A demand notice was issued on 03 December 2024 for ₹1,45,54,681.57. The Corporate Debtor made a partial payment of ₹5,00,000 on 28 December 2024 after receiving the notice.

The Corporate Debtor contested the petition on multiple grounds. It argued that the demand notice was not served at its registered office and that the Operational Creditor had suppressed complete financial statements and bank accounts for the contemporaneous period. It claimed to have made payments totaling ₹82,96,833 through banking channels including Letters of Credit (LCs) and credit card payments, and disputed the remaining ₹40,20,954 on grounds of substandard quality and quantity of goods, for which debit notes were allegedly raised. The Corporate Debtor also contended that the invoices were unilateral documents for taxation purposes, lacking acceptance or confirmation, and did not specify payment terms or due dates. It further asserted that emails from the Operational Creditor were procedural formalities not requiring response, as payments were already reflected in statements.

The tribunal examined evidence including invoices (which were unsigned), e-way bills, kutcha receipts, bank statements from the Operational Creditor (only for December 2024 and January 2025), and payment evidence from the Corporate Debtor such as LCs from ICICI Bank, transactions on the TReDS platform (Receivables Exchange of India Limited financed by IOB and Bank of Maharashtra), and corporate credit card statements. The Corporate Debtor's audited balance sheet for FY 2023-24 did not specifically disclose the liability, noting the company had not received vendor status under the MSMED Act. A letter from the Corporate Debtor dated 23 January 2024 requested the Operational Creditor to adjust payments against older invoices first, which went unanswered.

The tribunal observed a significant lack of evidence from the Operational Creditor, particularly the failure to provide complete bank statements for the period when supplies were made (December 2023 to December 2024) to conclusively prove non-payment. The absence of a written contract, unsigned invoices without payment due dates, and unreconciled payment differences through banking channels created doubt about the crystallized debt. The tribunal noted that payments made via LCs and TReDS platform were evident, but corresponding credits in the Operational Creditor's bank accounts were not demonstrated.

Final Outcome

The NCLT rejected CP (IB) No. 106 of 2025 and disposed of the matter. The tribunal held that the Operational Creditor failed to provide sufficient evidence under Section 9(3)(c) of the IBC to prove that the debt was due and payable. The existence of payment disputes, partial payments through banking channels, and lack of conclusive bank records meant the petition did not meet the threshold for admission. The Corporate Debtor's argument of a pre-existing dispute regarding quality and payments was sustained, leading to the dismissal of the insolvency application.

Topics: Insolvency Petition, Payment Dispute, Supply of Goods