WhatsApp Chats Establish Pre-Existing Dispute and Bar Section 9 CIRP: NCLAT Delhi

Straw Commodities LLP Vs Anram Agro Trading Pvt. Ltd. (NCLAT Delhi)

Summary: NCLAT Delhi dismissed the Operational Creditor’s appeal against the order dated 25.10.2024 rejecting its application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for resolution of an alleged operational debt of ₹1,01,89,178.77. The parties had entered into three sale contracts concerning Tanzania and Ethiopian origin soya bean/soya bean meal. The Operational Creditor alleged that despite advance payments, the Corporate Debtor failed to deliver the contracted commodities and issued a Section 8 demand notice dated 18.09.2023. The Corporate Debtor contended that it had imported the commodities but the Operational Creditor failed to lift the goods despite repeated requests.

The NCLT relied on WhatsApp conversations showing discussions regarding deterioration in the soya bean market, the Operational Creditor’s buyer backing out, waiting for market improvement, sharing losses and adjustment of advance payments. Applying Mobilox Innovations Private Ltd vs Kirusa Software Private Ltd., the NCLT held that the communications demonstrated a genuine pre-existing dispute and that the IBC proceedings were being used for recovery. It also referred to S.S. Engineers V. Hindustan Petroleum Corporation Ltd & Ors. for the principle that NCLT exercising jurisdiction under Sections 7 or 9 of the IBC is not a debt collection forum. Before NCLAT, the Operational Creditor challenged reliance on WhatsApp messages by citing M/s. Kashyap Infraprojects Pvt. Ltd. Vs. M/s. Hi-Tech Sweet Water Technologies Pvt. Ltd. and raising an objection concerning Section 65B. NCLAT noted, however, that the Appellant did not deny that the WhatsApp conversations had occurred or dispute the manner in which they occurred. It therefore rejected the attempt to contradict those communications on that basis.