Anurada Chemicals Vs Synaptics Labs Private Limited (NCLAT Chennai)
NCLAT Dismisses Insolvency Appeal as Withdrawn Following Settlement; NCLT Had Rejected Plea for Defective Demand Notice
Summary: The National Company Law Appellate Tribunal (NCLAT), Chennai, by its order dated 27 August 2026, dismissed the appeal filed by Anurada Chemicals against Synaptics Labs Private Limited as withdrawn after counsel for the appellant informed the Tribunal that the matter had been settled between the parties.
Earlier, the National Company Law Tribunal (NCLT), Hyderabad, had dismissed the operational creditor’s application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC), seeking initiation of the Corporate Insolvency Resolution Process (CIRP) for an alleged operational debt of ₹1.25 crore.
Although the corporate debtor had acknowledged liability of ₹1.15 crore, exceeding the statutory threshold of ₹1 crore, the NCLT found that the operational creditor had failed to establish valid service of the mandatory demand notice under Section 8 of the IBC. The postal notice carried an incorrect PIN code, while the alleged email service was unsupported by evidence of delivery to the prescribed personnel. A copy of the delivered demand notice was also not filed with the petition.
The NCLT held that establishing operational debt and default was insufficient in the absence of compliance with mandatory statutory requirements, even where the proceedings were uncontested.
Following settlement, the NCLAT dismissed the appeal as withdrawn without examining the merits of the NCLT’s findings. Consequently, the appellate order does not constitute an affirmation or reversal of the NCLT’s reasoning concerning defective service of the demand notice.
Analysis of NCLT and NCLAT Orders
Operational Debt and Default Exceeding ₹1 Crore Established
Anurada Chemicals filed an application under Section 9 of the IBC seeking initiation of CIRP against Synaptics Labs Private Limited for an alleged default of ₹1,25,12,394 arising from the supply of chemicals.
The operational creditor relied upon purchase orders, tax invoices, e-way bills, dishonoured post-dated cheques aggregating to ₹38,12,750 and an acknowledged confirmation of accounts.
Although the corporate debtor disputed the quantum of debt on the NeSL portal, it acknowledged liability of ₹1,15,23,010 as on 27 April 2024.
The NCLT held that the documentary evidence established the existence of operational debt under Section 5(21) of the IBC and that even the admitted liability exceeded the minimum threshold prescribed under Section 4(1).
Valid Service of Demand Notice Mandatory Under Section 8 of IBC
The NCLT observed that establishing operational debt and default alone was insufficient for admission of an insolvency petition under Section 9. The operational creditor was also required to comply with Section 8 of the IBC and Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.
The Tribunal identified three material deficiencies:
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Incorrect postal PIN code: The demand notice was sent to an address bearing PIN code 500084 instead of the registered office PIN code of 500018.
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Unsubstantiated email service: No evidence established that the email was sent to a whole-time director, designated partner or key managerial personnel or that it was received.
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Non-filing of delivered demand notice: The operational creditor failed to furnish a copy of the delivered demand notice as required under Section 9(3)(a).
Ex Parte Proceedings Do Not Dispense With Statutory Compliance
Although the corporate debtor was proceeded against ex parte on 10 February 2025, the NCLT held that the absence of opposition did not dispense with mandatory statutory compliance.
Relying upon Section 9(5)(ii)(c) of the IBC and judicial precedents concerning service of demand notices, the NCLT dismissed CP (IB) No. 134/9/HDB/2024.
NCLAT Dismisses Appeal Following Settlement
Before the NCLAT Chennai, counsel for the appellant stated that the matter had been settled and sought permission to withdraw the appeal.
Recording the statement, the NCLAT dismissed the appeal as withdrawn on 27 August 2026.
The NCLAT did not adjudicate the validity of the demand notice, the existence of operational debt or the correctness of the NCLT’s findings on merits.
Legal Significance of the Orders
The NCLT order highlights the importance of establishing valid service of a statutory demand notice before initiating insolvency proceedings. Even an acknowledged operational debt exceeding ₹1 crore may not justify admission of a Section 9 application where mandatory notice requirements remain unfulfilled.
The subsequent NCLAT order merely records the settlement and withdrawal of the appeal. It should not be interpreted as laying down an independent judicial precedent on the requirements of Section 8 of the IBC.
Cases Discussed
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Shailendra Sharma v. Ercon Composites, [2021] ibclaw.in 14 NCLAT — Relied upon for the mandatory requirement of service of a demand notice under Section 8 of the IBC.
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Shri Bijay Pratap Singh v. Unimax International, [2020] ibclaw.in 165 NCLAT — Relied upon to establish that sending a demand notice to an incorrect address does not satisfy statutory requirements.
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Uttam Galva Steels v. DF Deutsche Forfait AG and Others, Company Appeal (AT) (Insolvency) No. 39 of 2017, decided on 28 July 2017 (NCLAT) — Relied upon for the requirement of compliance with Section 8 before filing an application under Section 9 of the IBC.
FULL TEXT OF THE NCLAT JUDGMENT/ORDER
27.08.2026: Learned counsel for the appellant makes a statement as per the instructions the matter has been settled, and she is on instructions to withdraw the appeal. The statement of the learned counsel is recorded. Accordingly, the appeal is dismissed as withdrawn.
