Absence Of Record In Information Utility Negates Claim Of Pre-Existing Dispute: NCLT Bengaluru

Background

The following Section 9 application has been filed by PAN Oceanic Seed Solutions Private Limited (Operational Creditor) against the Corporate Debtor (Camson Seeds Limited) before the National Company Law Tribunal, Bangalore Bench.

The dispute is related to the supply of various deeds and agricultural products to the corporate debtor pursuant to multiple purchase orders during 2017 and 2018. Despite partial payments and an issuance of credit note, a balance of Rs. 1 crore remain unpaid. Over the years the corporate debtor acknowledged the outstanding dues. Despite repeated demands and reminders no further payments were made and in the month of September 2023, the operational creditor served a final demand notice to the Corporate Debtor but it failed to respond. A banker's certificate and statement of account were also submitted affirming non-receipt of the claimed amount.

Corporate Debtor defence

The corporate debtor argued that the letter exchanged between the parties which the operational creditor relied on did not constitute a clear admission of liability. The Corporate Debtor also argued that any communications acknowledging debt were made under commercial pressure and cannot be constituted as a valid admission of operational debt under the IBC. They also cited the financial distress especially due to the COVID-10 pandemic as the reason for non-payment.

NCLT Judgement

The NCLT after examining the submissions and evidence admitted the Section 9 petition. It found that the operational creditor had supplied biotechnology products to Corporate Debtor which remained unpaid despite repeated demands and acknowledgements of liability by the corporate debtor. The tribunal also stated that the Corporate Debtor had issued several written acknowledgements between 2018 and 2022 which were crucial in addressing the issue of limitation under the code especially in the light of the Supreme Court decision in the case of Dena Bank vs. C. Shivakumar Reddy & Anr., Civil Appeal No. 1650 of 2020 (2021 SCC Online SC 543). The Tribunal also cited the Apex Court judgement of Mobilox Innovations Private Limited v. Kirusa Softwarec Private Limited, (2017) ibclaw.in 01 SC and stated that if there is no record of dispute in the information utility, nor any documents submitted to show any dispute, it cannot be held that there is a pre-existing dispute.

Accordingly, the Tribunal admitted the petition and ordered the initiation of the Corporate Insolvency Resolution Process (CIRP) against the corporate debtor.

Case Title: Pan Oceanic Seed Solutions Private Limited v Camson Seeds Limited

Case Number: CP (IB) No. 163/BB/2024

Tribunal: National Company Law Tribunal, Bengaluru Bench, Bengaluru

Coram: Hon'ble Shri Sunil Kumar Aggarwal (Member (Judicial) and Hon'ble Shri Radhakrishna Sreepada, (Member (Technical)

Date of Judgement: 09.04.2025

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