Adishank Chemicals Pvt. Ltd. Vs Baerlocher India Additives Pvt. Ltd. (NCLT Mumbai)
In a recent judgment, the National Company Law Tribunal (NCLT), Mumbai, has dismissed a petition filed by Adishank Chemicals Pvt. Ltd. against Baerlocher India Additives Pvt. Ltd. under Section 9 of theInsolvency and Bankruptcy Code (IBC), 2016 (IBC). The petition sought the initiation of Corporate Insolvency Resolution Process (CIRP) for an alleged unresolved operational debt of Rs. 1,35,20,600 as on March 31, 2023.
Case Background
Adishank Chemicals, the Operational Creditor, contended that it had supplied goods to Baerlocher India, the Corporate Debtor, as per a Purchase Order dated June 23, 2022. However, Baerlocher India allegedly failed to pick up the material or make any payment, leading to financial losses for Adishank Chemicals. Despite several attempts to resolve the issue through emails and legal notices, the Corporate Debtor did not respond, prompting Adishank Chemicals to file the Section 9 petition.
Baerlocher India, in its defense, argued that the purchase order was issued after the validity of Adishank Chemicals’ offer had expired, rendering the order invalid. Additionally, Baerlocher India maintained that there was no contract in effect that required it to lift the goods or make any payments.
NCLT Analysis and Findings
The NCLT meticulously analyzed the claims and counterclaims of both parties. The Tribunal observed that the goods were never supplied to the Corporate Debtor, and no invoices were raised, which is a prerequisite for claiming an operational debt under the IBC. Furthermore, the Tribunal noted that the demand for payment by Adishank Chemicals was based on a contractual dispute rather than an operational debt.
The Tribunal underscored that non-acceptance of goods by the Corporate Debtor cannot be equated with default in respect of an operational debt. The appropriate course of action for Adishank Chemicals would be to seek damages for breach of contract in an appropriate forum, rather than invoking the provisions of the IBC.
