Chemical Suppliers India Private ... vs Kanodia Technoplast Limited

Company Appeal (AT) (Insolvency) No. 1244 of 2025 [Arising out of the Impugned Order dated 12.06.2025 passed by the Adjudicating Authority, National Company Law Tribunal, New Delhi Bench in C.P. (IB) No. 734/(ND)/2021]. In the matter of: Chemical Suppliers India Private Limited (CIN: U24299DL1997PTC090695) 507 Plot No-D-4,5,6 5th Floor Krishna Apra Business, Square N.S.P Pitampura, Delhi-110034 chemicalpeople@gmail.com ...Appellant Versus Kanodia Technoplast Limited (CIN: U74899DL1995PLC067544) A-54 Wazirpur Industrial Area, New Delhi Dl 110052 cs@kanodiaindia.com .... Respondent Present: For Appellant : Mr. Sunil Fernandes, Sr. Advocate with Mr. Nikhil Kumar, Mr. Mahak Agarwal and Mr. Kapil Sharma, Advocates. For Respondent : Mr. Abhishek Anand, Mr. Karan Kohli and Ms. Palak Kalra, Advocates.

JUDGMENT

(Hybrid Mode)

Per: Barun Mitra, Member (Technical)

The present appeal filed under Section 61 of Insolvency and Bankruptcy

Code 2016 ('IBC' in short) by the Appellant arises out of the Order dated

12.06.2025 (hereinafter referred to as 'Impugned Order') passed by the

Adjudicating Authority (National Company Law Tribunal, New Delhi Bench-IV)

in C.P. (IB) No. 734/ND/2021. By the impugned order, the Adjudicating Authority has dismissed the Section 9 application filed by the Appellant-

Chemical Suppliers India Pvt. Ltd. Aggrieved by the impugned order, the present

appeal has been preferred by the Appellant-Operational Creditor.

2. Coming to the chronology of events of this present matter, we notice that

the Appellant-Operational Creditor had been engaged by the Respondent-

Corporate Debtor for supply of chemicals and raw materials. The materials were

supplied by the Appellant but as the Respondent had purportedly failed to

discharge their payment obligations of an outstanding amount of Rs

7,84,94,085/- which included the principal and interest component of Rs

6,13,26,856/- and Rs 1,71,67,229/- respectively, the Appellant had filed C.P

No. 734 of 2021 under Section 9 on 22.11.2021 before the Adjudicating

Authority to initiate CIRP against the Respondent. The Section 9 application was

dismissed by the Adjudicating Authority on 16.10.2023 on the ground of non-

maintainability by holding that the default had occurred based on invoices

pertaining to the suspended period under Section 10-A of IBC. This Section 9

dismissal order was challenged by the Appellant before this Tribunal. This

Tribunal observed that what was relevant to be seen was as to whether the

outside Section 10-A period invoices in the Table of invoices set out by the

Operational Creditor exceeded Rs 1 Cr. This Tribunal after noticing that there

were several invoices exceeding Rs 1 Cr. which fell outside the Section 10-A

period and remained unpaid, this Tribunal on 09.07.2024 restored the Section

9 application and remanded the matter back to the Adjudicating Authority to

proceed further in accordance with law. In pursuance of the above order of this

Tribunal, the Adjudicating Authority on 24.02.2025 directed the matter to be Page 2 of 15 Company Appeal (AT) (Insolvency) Nos. 1244 of 2025 listed for hearing on 20.03.2025. However, this order of the Adjudicating

Authority was challenged by the present Appellant on the ground that the order

of this Tribunal dated 09.07.2024 ipso facto meant admission of the Section 9

application. However, this appeal came to be dismissed by this Tribunal on

02.04.2025 following which Adjudicating Authority proceeded with the hearing

of CP No. 743 of 2021. The Adjudicating Authority noticed that the Corporate

Debtor had tendered a Demand Draft dated 26.03.2025 amounting Rs

1,65,89,311/- to square off the operational debt in respect of the invoices which

fell outside the protective ambit of Section 10-A which the Appellant-Operational

Creditor had claimed in their Section 9 application. The Adjudicating Authority

further noticed that inspite of this offer of payment by Corporate Debtor to settle

the enforceable portion of the debt, the same was rejected by the Appellant as

partial/conditional payment. Holding the rejection by the Appellant of the offer

made by the Corporate Debtor to settle the debt to be misuse of the insolvency

process tantamount to using IBC as a recovery mechanism which is inconsistent

with the objectives of the IBC, the Adjudicating Authority by its order dated

12.06.2025 directed the Corporate Debtor to deposit an amount of Rs

1,65,89,311/- in an interest-bearing Fixed Deposit Receipt (FDR) with the NCLT

Registry, to be retained in safe custody for an initial period of six months and

rejected the Section 9 application filed by the Appellant. Aggrieved by the

impugned order, the present appeal has been preferred by the Appellant.

3. Making submissions on behalf of the Appellant-Operational Creditor, Shri

Sunil Fernandes, Ld. Sr. Counsel had submitted that the Adjudicating Authority

erroneously dismissed the Section 9 petition as it is a settled position in law that Page 3 of 15 Company Appeal (AT) (Insolvency) Nos. 1244 of 2025 the scope of adjudication under Section 9 of the IBC is limited to determining

whether an operational debt is due and payable and whether any default has

occurred in relation to such debt and if the amount of default exceeds the

statutory threshold outlined under Section 4 of the IBC. Once these

conditionalities are established, the Adjudicating Authority is mandatorily

required to admit the Section 9 petition as long as the Corporate Debtor fails to

establish the existence of a pre-existing dispute or show any other legally

sustainable defence which is well settled in terms of the judgment of the Hon'ble

Supreme Court in Mobilox Innovations Pvt. Ltd. Vs Kirusa Software Pvt. Ltd.

(2108) 1 SCC 353.

4. It was further submitted that in the present case, there is a clear

admission of debt and default above Rs 1 Cr. in terms of the invoices raised by

the Operational Creditor and there being no grounds of pre-existing dispute

raised by the Corporate Debtor, the Section 9 applicable should have been

admitted. It was vehemently contended that the Adjudicating Authority has

erroneously held that the outstanding liability is only Rs 1.65 Cr. The

Adjudicating Authority has failed to take into cognisance that in the list of 60

invoices submitted by them, apart from the 7 invoices amounting Rs 1.65 Cr.

which clearly fall outside the Section 10-A period, there were two other invoices

which fell outside the Section 10-A period. By factoring in these 2 invoices, the

outstanding liability of the Corporate Debtor stood at Rs 2.26 Cr. and not Rs

1.65 Cr. However, the Corporate Debtor had offered to only pay Rs 1.65 Cr.

which did not meet the entire debt liability. It is the case of the Operational

Creditor that when the Corporate Debtor did not clear the full payment of Page 4 of 15 Company Appeal (AT) (Insolvency) Nos. 1244 of 2025 outstanding dues, the Operational Creditor retained its rights to refuse to accept

the part payment offered by the Corporate Debtor. The Adjudicating Authority

also does not possess statutory jurisdiction to compel the Operational Creditor

to accept any such part or conditional settlement. Non-acceptance of part

payment cannot be held against the Operational Creditor as if they were

pursuing the Section 9 application for causing harassment to the Corporate

Debtor to demand more payment. It was contended that the Operational Creditor

cannot be deprived of exercising his option to accept or reject the partial payment

offered by the Corporate Debtor and cannot be deprived of their statutory rights

to follow up on the Section 9 proceedings.

5. Refuting the submissions made by the Appellant, Shri Abhishek Anand,

Ld. Counsel for the Respondent submitted that the Appellant has issued a

Demand Notice under Section 8 of the IBC by adverting attention to 60 invoices

out of which 53 invoices were between 01.07.2020 to 23.03.2021 which clearly

fell within the Section 10-A period and only 7 invoices between 31.03.2021 till

03.06.2021 fell outside the Section 10-A period. The Corporate Debtor in their

reply dated 08.10.2021 to the Section 8 Demand Notice had categorically pointed

out that the invoices in question were barred under Section 10-A of IBC as they

were raised after 25.03.2020. However, the Appellant filed C.P. IB No. 734 of

2021 under Section 9 basis a list of 60 invoices which was segregated into Table-

A comprising of 53 invoices amounting Rs 4.15 Cr. falling in the Section 10-A

period and Table-B comprising of 7 invoices amounting Rs 1.65 Cr. falling

beyond the Section 10-A period. The said Section 9 petition was initially

dismissed by the Adjudicating Authority on 16.10.2023 which on appeal had Page 5 of 15 Company Appeal (AT) (Insolvency) Nos. 1244 of 2025 been remanded on 09.07.2024 by this Tribunal to the Adjudicating Authority.

Submission was pressed that even when the matter was remanded back to the

Adjudicating Authority by this Tribunal, even at that stage the list of invoices

submitted by the Operational Creditor in their Section 9 application was not

interfered with. It was added that the Appellant has now raised the issue of

modification of the invoices in Table-A and Table-B with respect to Section 10-A

which cannot be agitated at this stage.

6. Submission was pressed by the Corporate Debtor that the Section 9

application was not filed with the purpose of resolution of the Corporate Debtor

but for the purpose of recovery. It was asserted that the Adjudicating Authority

had rightly taken notice that the Corporate Debtor had offered to make payment

of Rs 1.65 Cr. to the Operational Creditor to clear the outstanding liability in

terms of the Table-B invoices which had been submitted by the Operational

Creditor in the Section 9 application as invoices which fell outside the Section

10-A period. The Corporate Debtor had already demonstrated its bonafide

intention to discharge its liability as it had tendered the entire non 10-A

liabilities by way of Demand Draft which also goes to vindicate that the Corporate

Debtor was financially capable and not financially insolvent. It was the

Operational Creditor who was trying to pitch for an expanded non 10-A liabilities

which was a clear deviation from their earlier claim which shows that they were

trying to misuse the provisions of the IBC as a recovery mechanism rather than

as a means of resolution. The Corporate Debtor being a financially solvent

company cannot be pushed into the rigours of CIRP. Since the Appellant had

adamantly refused to accept Rs 1.65 Cr. and instead insisted upon payment of Page 6 of 15 Company Appeal (AT) (Insolvency) Nos. 1244 of 2025 Rs 2.26 Cr., the Adjudicating Authority had rightly relied on the judgment of this

Tribunal in M/s SNJ Synthetics Ltd. Vs PepsiCo India Holdings Pvt. Ltd. in

CA(AT)(Ins) No. 386 of 2025 to hold that rejection by the Appellant of the offer

made by the Corporate Debtor's bonafide offer to settle the enforceable portion

of the debt showed an ulterior motive behind their conduct which amounted to

misuse of the insolvency process as a recovery mechanism which is inconsistent

with the objectives of the IBC.

7. We have duly considered the arguments advanced by the Learned Counsel

for the parties and perused the records carefully.

8. The short question to be answered is whether the Adjudicating Authority

had erred in rejecting the Section 9 application after noticing that the Corporate

Debtor had agreed to discharge their outstanding liabilities of Rs 1.65 Cr. arising

out of 7 invoices which fell outside the Section 10-A period.

9. It is the case of the Operational Creditor that out of the 53 invoices which

have been held to be covered by Section 10-A, 2 invoices at Sl. No. 52 & 53 were

beyond the Section 10-A period as the invoices were payable after 90 days. While

the Invoice no. 52 for an amount of Rs 30.45 lakhs became payable on

15.06.2021, Invoice no. 53 amounting Rs 30.46 lakhs became payable on

23.06.2021 making them both fall outside the purview of Section 10-A period. If

these invoices are added then the outstanding principal amount stood at Rs 2.26

Cr. and not Rs 1.65 Cr. as has been held in the impugned order. Since the

Corporate Debtor did not make any offer to clear the outstanding liability arising

out of these 2 invoices, the Section 9 application could not have been dismissed

by the Adjudicating Authority. It was also asserted that when the matter had Page 7 of 15 Company Appeal (AT) (Insolvency) Nos. 1244 of 2025 been considered by this Tribunal on 09.07.2024, this Tribunal had not looked

into the number of invoices which fell beyond the Section 10-A period but had

only looked into whether the invoices relied upon by the Operational Creditor

crossed the threshold of Rs 1 Cr. for the purpose of maintaining the Section 9

application. Since no finding had been returned by this Tribunal as such on

individual invoices, there is no restriction operating on the Operational Creditor

to identify the final set of invoices beyond the 10-A period basis which the

operational debt claim could be quantified. It is also contended by the Appellant

that the Adjudicating Authority has wrongly relied on the judgment of Pepsico

India Holdings supra as the facts of that case differ from the facts of the

present case. In that case, there was no principal amount which was due which

is why the Operational Creditor was not allowed to agitate the interest

component, whereas in the present case, the principal operational debt remains

partly paid by the Corporate Debtor. Hence, the Operational Creditor was well

within its rights to claim full dues and merely because full payment was sought

by the Operational Creditor, it cannot be inferred that the Section 9 petition was

being used as a recovery tool.

10. Coming to our analysis and findings, when we look at the Section 9

application filed by the Operational Creditor which is placed at page 70 of the

Appeal Paper Book, we find that it is the Operational Creditor who have

themselves submitted the invoices in two separate tables and the same tables

have been followed both by the Adjudicating Authority in its order dated

16.10.2023 and by this Tribunal in its remand order dated 09.07.2024. Further,

when we look at the order of this Tribunal dated 09.07.2024 remanding the Page 8 of 15 Company Appeal (AT) (Insolvency) Nos. 1244 of 2025 matter back to the Adjudicating Authority, we find that at para 7 therein, a clear

reference has been made to the list of invoices which was arrayed by the

Appellant before the Adjudicating Authority in the CP No. 734 of 2021. This list

of invoices as extracted out in the order of this Tribunal on 09.07.2024 is as

reproduced below:

S.No. Date of Invoice No. Amount Balance Invoice Amount 1. 01.07.2020 1303 16,46,855/- 16,46,855/-

2. 09.07.2020 1326 1,63,288/- 1,63,288/-

3. 18.07.2020 1384 3,96,480/- 3,96,480/-

4. 20.07.2020 1390 2,53,747/- 2,53,747/-

5. 21.07.2020 1393 16,65,853/- 16,65,853/-

6. 26.07.2020 1408 7,57,159/- 7,57,159/-

7. 27.07.2020 1414 14,39,600/- 14,39,600/-

8. 01.08.2020 1435 2,33,640/- 2,33,640/-

9. 04.08.2020 1438 5,49,585/- 5,49,585/-

10. 06.08.2020 1452 14,39,600/- 14,39,600/-

11. 09.08.2020 1463 3,27,096/- 3,27,096/-

12. 15.08.2020 1499 14,39,600/- 14,39,600/-

13. 19.08.2020 1513 3,27,096/- 3,27,096/-

14. 21.08.2020 1549 1,36,998/- 1,36,998/-

15. 21.08.2020 1550 1,36,998/- 1,36,998/-

16. 21.08.2020 1551 5,47,992/- 5,47,992/-

17. 26.08.2020 1586 6,54,192/- 6,54,192/-

18. 16.09.2020 1703 3,60,301/- 3,60,3011-

Page 9 of 15 Company Appeal (AT) (Insolvency) Nos. 1244 of 2025 19. 18.09.2020 1708 3,84,987/- 3,84,987/-

20. 18.09.2020 1708 3,84,987/- 3,84,987/-

21. 21.09.2020 1722 3,84,987/- 3,84,987/-

22. 22.09.2020 1724 2,37,534/- 2,37,534/-

23. 23.09.2020 1728 3,88,881/- 3,88,8811-

24. 25.09.2020 1740 4,43,137/- 4,43,137/-

25. 30.09.2020 1772 4,47,291/- 4,47,2911-

26. 06.10.2020 1793 3,75,911/- 3,75,911/-

27. 08.10.2020 1808 3,56,075/- 3,56,075/-

28. 11.10.2020 1820 2,31,867/-' 2,31,867/-

29. 15.10.2020 1828 4,48,146/- 4,48,146/-

30. 22.10.2020 1840 3,16,448/- 3,16,448/-

31. 07.11.2020 1873 5,80,942/- 5,80,942/-

32. 12.11.2020 1883 4,87,735/- 4,87,735/-

33. 18.11.2020 1890 2,69,419/- 2,69,419/-

34. 20.11.2020 1893 17,94,001/- 17,94,001/-

35. 22.11.2020 1896 1,98,743/- 1,98,743/-

36. 01.12.2020 1903 3,78,237/- 3,78,237/-

37. 04.12.2020 1905 5,68,940/- 5,68,940/-

38. 07.12.2020 1908 5,68,950/- 5,68,950/-

39. 10.12.2020 1911 5,68,950/- 5,68,950/-

40. 14.12.2020 1913 5,33,683/- 5,33,683/-

41. 17.12.2020 1919 22,19,119/- 22,19,119/-

42. 19.12.2020 1922 7,65,107/- 7,65,107/-

Page 10 of 15 Company Appeal (AT) (Insolvency) Nos. 1244 of 2025 43. 28.12.2020 1940 5,11,4711- 5,11,471/-

44. 29.12.2020 1944 24,75,607/- 24,75,607/-

45. 03.01.2021 1949 4,77,373/- 4,77,373/-

46. 09.01.2021 1957 4,43,275/- 4,43,275/-

47. 15.01.2021 1963 5,25,671/- 5,25,671/-

48. 15.01.2021 1962 5,25,6711- 5,25,6711

49. 19.01.2021 1970 4,32,558/- 4,32,558/-

50. 23.01.2021 1973 24,31,501/- 24,31,501/-

51. 13.03.2021 2124 22,01,329/- 22,01,329/-

52. 15.03.2021 2131 30,45,160/- 30,45,160/-

53. 23.03.2021 2160 30,46,683/- 30,46,683/-

A 4,15,41,479/- 4,15,41,479/-

54. 31.03.2021 2182 38,08,354/- 38,08,354/-

55. 26.04.2021 GST/21-22/071 33,52,189/- 33,52,189/-

56. 15.05.2021 GST/21-22/105 4,58,888/- 4,58,888/-

57. 16.05.2021 GST/21-22/106 12,15,434/- 12,15,434/-

58. 16.05.2021 GST/21-22/107 5,20,900/- 5,20,900/-

59. 17.05.2021 GST/21-22/109 33,52,189/- 33,52,189/-

60. 03.06.2021 GST/21-22-222 38,81,357/- 38,81,357/-

B 1,65,89,311/- 1,65,89,311/-

Total (A+B) 5,81,30, 790/- 5,81,30, 790/-

11. The invoice list of the Operational Creditor as expressly recorded by the

Adjudicating Authority in its order dated 16.10.2023 finds a replica reflection in

Page 11 of 15 Company Appeal (AT) (Insolvency) Nos. 1244 of 2025 the order of this Tribunal dated 09.07.2024. It is clear from the list reproduced

in the immediately preceding paragraph that the Operational Creditor had relied

on 60 invoices basis which the operational debt has been claimed in the Section

9 application. These invoices were categorized into two Tables of which 53

invoices in Table-A fell in the prohibited period of Section 10-A and 7 invoices in

Table-B fell outside the Section 10-A period as they were dated between

31.03.2021 to 03.06.2021. The order of this Tribunal dated 09.07.2024 while

remanding the CP No. 734 of 2021 to the Adjudicating Authority had not

interfered in any manner with respect to the list of invoices which formed the

basis of the claim preferred by the Operational Creditor in their Section 9

application. When the matter was remanded back to the Adjudicating Authority

by this Tribunal on 09.07.2024, the Operational Creditor had not challenged the

categorization of the invoices in Table-A relating to invoices barred by Section

10-A and Table-B relating to invoices unaffected by Section 10-A. Thus, the

Operational Creditor having expressly acknowledged at the time of filing Section

9 application that only 7 invoices amounting Rs 1.65 Cr. fell outside the

protective shield of Section 10-A, the Operational Creditor cannot be seen to

claim subsequently that there were other invoices apart from the aforementioned

7 invoices which also fell outside the ambit of Section 10-A. This stand never

having been taken by the Operational Creditor earlier either before the

Adjudicating Authority or before this Tribunal cannot now alter their stand as it

would be in direct contradiction to the submissions and pleadings made by the

Operational Creditor before the Adjudicating Authority and this Tribunal earlier.

The present claim of adding 2 more invoices to the earlier list of 7 invoices as Page 12 of 15 Company Appeal (AT) (Insolvency) Nos. 1244 of 2025 invoices falling outside the Section 10-A period amounts to shifting the goal-post

which cannot be accepted. This amounts to be an attempt to improving their

own case to inflate the quantum of default and arm-twist the Corporate Debtor

into parting with more than what was envisaged in the original Section 9

application. We are of the firm view that the Operational Creditor cannot now

canvass for reopening for segregation of invoices afresh from what was originally

depicted by them while filing the Section 9 application. Once the Operational

Creditor had on their own volition admitted the operational debt to be Rs 1.65

Cr. qua 7 invoices not hit by Section 10-A, it cannot alter, modify, expand or

shrink the list of invoices originally set up by themselves in Table-A and Table-

B which had been set out by them in their Section 9 application.

12. We also notice that the Corporate Debtor had offered to pay the entire

amount of Rs 1.65 Cr. by way of Demand Draft to the Corporate Debtor towards

meeting the claim amount arising out of the 7 invoices which undisputedly fell

outside the purview of Section 10-A. This clearly affirms the bonafide intention

of the Corporate Debtor to discharge their liabilities arising out of the 7

undisputed invoices not covered by Section 10-A. This commitment given to

clear their liabilities coupled with deposit of FDR of the said amount with the

NCLT Registry also demonstrates that the Corporate Debtor was not only keen

to discharge its outstanding liabilities but also financially solvent. The Appellant

by not accepting the amount of Rs 1.65 Cr. which has already been deposited

by the Corporate Debtor shows that the Operational Creditor was using the

Section 9 application as a coercive recovery tool and not as a resolution

mechanism.

Page 13 of 15 Company Appeal (AT) (Insolvency) Nos. 1244 of 2025

13. The decision of the Operational Creditor not to accept the payment

proposal of the Corporate Debtor to liquidate their debt by asking for an amount

more than what was indicated by them earlier goes to show that their demand

was not to further the spirit and objective of IBC of reorganisation and resolution

of the Corporate Debtor but to subject the Corporate Debtor to debt recovery

procedure thereby making their denial to accept payment from the Corporate

Debtor arbitrary and unsustainable. In such circumstances, we have no reasons

to disagree with the Adjudicating Authority that it would not be in consonance

with the objective of IBC to drag the Corporate Debtor into insolvency. The

objective of IBC is for the revival, resolution and rejuvenation of a Corporate

Debtor from financial distress rather than leverage the provisions of IBC as a

coercive recovery tool to abandon the Corporate Debtor to face the peril of

corporate death and extinction. We would like to add that the protective shield

of Section 10-A does not extinguish or wipe out the liability but only renders it

unenforceable in Section 7 and 9 proceedings. The Operational Creditor can

always enforce the liability arising out of invoices falling within the Section 10-

A period by taking recourse to civil remedies and not by way of Section 9

proceedings.

14. In view of the foregoing discussion, we are in agreement with the impugned

order rejecting the Section 9 application in view of the fact that the amount of

Rs 1.65 Cr. stands deposited by the Corporate Debtor by FDR with NCLT

Registry for making the same available to the Appellant towards discharge of

operational debt in terms of Table-B of the invoices alongwith liberty to the

Appellant to avail other remedies in accordance with law. We do not find any Page 14 of 15 Company Appeal (AT) (Insolvency) Nos. 1244 of 2025 good ground to interfere with the above order of the Adjudicating Authority.

There is no merit in the Appeal. The Appeal is dismissed with no order as to

costs.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

Place: New Delhi Date: 07.01.2026 Abdul

Page 15 of 15 Company Appeal (AT) (Insolvency) Nos. 1244 of 2025