The Tribunal emphasizes the existence of a genuine dispute, preventing the initiation of insolvency proceedings under IBC Section 9.
In a significant ruling, the National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, has upheld the rejection of an application filed by Accurate Transheat Pvt. Ltd. to initiate corporate insolvency resolution proceedings against Sufi International Pvt. Ltd. The order, dated December 10, 2025, was delivered by a bench comprising Justice Ashok Bhushan, Chairperson, and Barun Mitra, Member (Technical).
The appeal arose from a decision by the National Company Law Tribunal (NCLT), Ahmedabad, Court-2, which rejected Accurate Transheat's application under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. The application was initially filed due to alleged unpaid operational debts totaling Rs. 2,08,68,294 for goods supplied during the financial year 2020-2021. Accurate Transheat had issued a demand notice under Section 8 of the IBC, which was subsequently disputed by Sufi International.
Central to the Tribunal's decision was the presence of a "record of dispute" in the Information Utility, a critical factor under Section 9(5)(ii)(d) of the IBC. The NeSL (National E-Governance Services Ltd) Certificate indicated that the debt was disputed, which Sufi International corroborated by denying the existence of the debt and claiming it as a judicial matter already stayed by the Gujarat High Court.
The NCLAT highlighted that insolvency proceedings are not intended to resolve contractual disputes, emphasizing that Section 9 applications must be rejected if there is a genuine dispute. The Tribunal referred to the Supreme Court's judgment in "Mobilox Innovations Private Limited v. Kirusa Software Private Limited," underscoring that disputes must be credible and not spurious or illusory.
The Tribunal reinforced that the legislative intent of the IBC is to prevent the misuse of insolvency proceedings in cases of genuine disputes and that the presence of a dispute in the Information Utility is sufficient grounds for rejection. The decision confirms that the NCLAT is steadfast in ensuring that insolvency proceedings are not used as a tool for pressure in commercial disputes.
Justice Ashok Bhushan noted, "Section 9(5)(ii)(d) provides that the application for insolvency must be rejected if there is a record of dispute. The Adjudicating Authority rightly concluded that the existence of a dispute as recorded in the NeSL Certificate warranted the rejection of the application."
The Tribunal's ruling not only dismisses the appeal by Accurate Transheat but also clarifies that the dismissal does not prevent the appellant from pursuing other legal remedies available under the law.
Bottom Line:
Insolvency and Bankruptcy Code, 2016 - Section 9(5)(ii)(d) - Application under Section 9 for initiation of corporate insolvency resolution process can be rejected by the Adjudicating Authority if there is a record of dispute in the Information Utility or notice of dispute has been received by the operational creditor.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 - Section 9(5)(ii)(d)
