Shree Dhanvantari Pharmaceuticals Vs Konkan Ayur Pharma Private Limited (NCLAT Delhi)
Summary: The appeal challenged the NCLT-IV, Mumbai Bench order dated 07.02.2024 dismissing the appellant’s Section 7 IBC application seeking initiation of CIRP against Konkan Ayur Pharma Private Limited. The appellant claimed that loans aggregating to ₹2,26,45,568/- had been advanced to the Corporate Debtor and that ₹3,55,54,900/- including interest at 18% per annum was due. The NCLT had found uncertainty regarding the date of default, the nature of the transaction and the authority to institute the proceedings. Before the NCLAT, the appellant contended that the Corporate Debtor had acknowledged the debt, that the date of default had been amended to 30.05.2022, and that the Section 7 petition had been authorised by two of the three surviving partners. The Corporate Debtor disputed the existence of a financial debt and the date of default, while the intervening respondents questioned the authority of the majority partners. NCLAT held that the majority decision of two of the three surviving partners was sufficient to authorise institution of the Section 7 proceedings. It further held that the amounts advanced constituted debt despite the absence of a formal loan agreement and that interest was not essential for a debt to constitute financial debt. However, the Tribunal found that the last transaction was on 31.03.2019 and that the subsequently stated default date of 30.05.2022 was unsupported. Since the Section 7 petition filed in August 2022 was beyond the applicable limitation period reckoned from 31.03.2019, the appeal was dismissed.
Background and Section 7 Proceedings
The appellant is a partnership firm engaged in the development, manufacture and trading of Ayurvedic medicines. The Corporate Debtor was incorporated on 27.08.2008 under an AYUSH cluster initiative promoted by the Government of India.
