In the matter of Jay Switches India Private Limited

Order under Section 9 of the Insolvency and Bankruptcy Code, 2016 read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.

IN THE MATTER OF: M/s Mototech Co. Limited …… Applicant/Operational Creditor

VERSUS

M/s Jay Switches India Private Limited …… Respondent/Corporate Debtor

Order Pronounced On: 12.06.2026

CORAM: JUSTICE ANUPINDER SINGH GREWAL HON’BLE PRESIDENT SHRI RAVINDRA CHATURVEDI HON’BLE MEMBER (TECHNICAL)

APPEARANCES: For the Applicant : Sr. Adv. P.V. Dinesh, Adv. Mohnish Nirwan, Adv. Ashok Kumar, Adv. Rajat Singh, Adv. Abhishek Pratap Singh, Adv. Anna Oommen For the Respondent : Mr. Hrishikesh Baruah, Mr. Yashaswy Ghosh, Ms. Pragya Agarwal, Advs.

CP(IB) – 168(PB)/2026

ORDER

1. This Application has been filed by M/s. Mototech Co. Ltd., the Applicant/Operational Creditor on 06.04.2026, before this Adjudicating Authority (AA) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC / Code) r/w Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, (AA Rules), for initiating the Corporate Insolvency Resolution Process (CIRP), declaring moratorium and for appointment of Interim Resolution Professional (IRP), against M/s Jay Switches India Private Limited, the Respondent/Corporate Debtor (CD) on the ground that the Corporate Debtor has defaulted/failed to clear the outstanding amount of Rs. 1,10,81,779/- (Rupees One Crore Ten Lakhs Eighty One Thousand Seven Hundred And Seventy Nine) as on date of filing the instant application.

Submissions of the Applicant:

2. The Applicant, M/s Mototech Co. Ltd., is an established entity registered in the Republic of Korea, operating a wholesale business of electricity and related materials.

3. The Applicant commenced business operations with the CD, specifically undertaking the design and supply of customised "Remote Keyless Entry" systems, including technically programmed components like Microcontroller Units ("MCU"), "XTAL", and "TACT switches". These parts were curated exclusively for the Debtor’s final consumer, M/s Stellantis Group, and could not be utilised elsewhere. The supply chain is as follows:

CP(IB) – 168(PB)/2026

4. The Corporate Debtor on 17.02.2022 issued the first Purchase Order bearing No. 122001920 for the supply of 96,000 units of customised MCUs.

5. The Corporate Debtor on 12.11.2022 issued a subsequent Purchase Order (No. 123001795) for bulk parts, comprising 1,800,000 MCUs, 200,000 XTALs, and 400,000 TACT Switches.

6. Requirement of the products keeps fluctuating due to prevalent marked conditions. As a prevailing business practice, all the business negotiations between the Applicant and the Debtor were done through e-mail for the sake of convenience.

7. The Applicant shipped components on a monthly basis. Total shipments up to December 2023 stood as follows:

8. The CD sought to cancel pending orders via email dated 27.11.2023 and requested the Applicant to provide the details of specific inventory which the CD is under an obligation to purchase.

9. The Applicant replied with a comprehensive inventory breakdown detailing quantities shipped, items that could be cancelled, and uncancelled balance inventory produced specifically for the Debtor. The breakdown chart is as follows:

10. The Applicant on 07.03.2024 proposed a delivery schedule for the remaining uncancelled inventory alongside the applicable royalty payments.

11. The CD, through its authorised representative Mr. Pankaj Gupta, on 22.03.2024 acknowledged the Applicant's inventory and confirmed a delivery schedule to absorb the remaining 42,000 MCU units.

12. Pursuant to the agreed-upon schedule, the Applicant on 29.04.2024 shipped 18,000 units of MCUs to the Debtor. Following this supply, the Applicant was left with a blocked, uncancelled inventory exclusively manufactured for the CD. The chart reflecting the liability of the CD is as follows:

13. The Applicant requested the CD via email dated 12.09.2024 to fulfil its commitment and purchase the remaining inventory.

14. To reach an amicable settlement, the Applicant's representative visited India. CD explicitly agreed to clear a delayed payment in a meeting dated 01.12.2024.

15. The Corporate Debtor sent an email dated 23.12.2024 reassuring the Applicant that the outstanding amounts would be paid as soon as its ongoing case with its end-consumer, Stellantis, concluded.

16. Despite consecutive reminder emails from the Applicant, the CD failed to honour the payment terms as agreed in the meeting.

17. Aggrieved by the continued default, the Applicant served a formal Demand Notice dated 27.10.2025 under Section 8 of the IBC demanding the immediate payment of the defaulted debt.

18. In a tactical and bad-faith manoeuvre to bypass the CIRP, the CD on 06.11.2025 made a partial payment intentionally to artificially force the remaining disputed sum below the statutory threshold of Rs. 1 Crore.

19. Two days after making the partial payment, the Debtor issued a formal reply dated 08.11.2025 to the Demand Notice, abruptly disputing the validity of the underlying purchase orders and rejecting all payment liabilities.

20. Having accepted a substantial fraction of the goods, negotiated volumes via email, and repeatedly acknowledged its financial liability through the email dated 22.03.2024, the signed MoM dated 01.12.2024, and the reassurance email dated 23.12.2024, the Corporate Debtor is entirely estopped from challenging the validity of the Purchase Orders or denying its operational debt under the equitable principles of Estoppel.

21. Further particulars of transactions as submitted under Form 5 are as follows:

22. Relevant particulars of debt as stated under form 5 is as follows:

23. Further, a short written note has been filed by the Applicant on 05.06.2026, wherein the Applicant has reiterated its factual submission and has the following legal submission: i. A conjoint reading of Section 8 and Section 9 would show that a trick payment after sending of notice under Section 8 would not take away the rights of Operational Creditor. ii. The Code does not provide the date on which the threshold limit should be maintained in case of Application under Section 9, however, a series of judgements have stated that the threshold limit should be at the time of filing the CIRP application. iii. Reliance has been placed upon Devika Resources Pvt Ltd versus MAA Manasha Devi Alloys Pvt Ltd., 2025 OnLine NCLAT 901

Submissions of the Respondent:

24. In a demand notice dated 27.10.2025 under Section 8 of the Insolvency and Bankruptcy Code, 2016, the Applicant claimed a total amount of USD 1,34,060.60 (approximately ₹ 1,18,76,780/-) and no amount on account of interest was charged therein. On the other hand, in the instant Application under Section 9, the Applicant has claimed a total sum of ₹ 1,10,81,779/- (Rupees One Crore Ten Lakhs Eighty-One Thousand Seven Hundred and Seventy-Nine only), which is broken down as:

25. The Applicant in Form 5 has added a claim on account of 24% interest unsupported by any written agreement on this. Nowhere in any agreement, purchase order, or invoice, any interest rate has been specified. The addition of interest is without any contractual or legal basis, and unilateral at the end of the Applicant. Therefore, the same has been added to artificially inflate the total claim amount to meet the threshold requirement of INR 1 crore. Reliance is placed on the following judicial precedents: i. Ahio Overseas LLP v. Gokal Iron and Hardware Traders (LDH), [reported in 2025 SCC OnLine NCLAT 1581, Para(s) 9, 19-22] ii. Pavan Enterprises v. Gammon India Ltd., [reported in 2018 SCC OnLine NCLAT 360, Para(s) 4-6]

iii. Mr. Ajay Kumar Gupta v. M/s L C Packers Private Limited, [reported in 2025 SCC OnLine NCLT 60, Para 9] iv. M/s Bhotika Trade and Services Pvt. Ltd. v. M/s Avinash EM Projects Pvt. Ltd., [reported in 2022 SCC OnLine NCLT 317, Para(s) 18-21]

26. Further, the amount claimed by the Applicant is disputed. Term No. 9 of both the Purchase Orders expressly states that the Schedule pertains to this PO or will expire after that particular month. Therefore, the schedules contained in the purchase orders were valid only until the end of the respective month specified therein, i.e., clear validity periods (PO122001920 valid up to 31.03.2023; PO-123001795 valid up to 31.12.2023). Upon expiry of the validity period, there is no continuing obligation upon the CD to accept or pay for any goods that the Applicant may have procured or retained in its inventory. Respondent vide emails dated 03.03.2023 and 21.04.2023 had also communicated to the Applicant that there was no further requirement of procurement. Reliance is placed on the following judicial precedents: i. K. Kishan v. Vijay Nirman Company Private Limited [reported in (2018) 17 SCC 662, Para(s) 20 & 22 ii. Pravin Electricals Private Ltd. v. Akshaya Engineering Works Private Ltd., [reported in 2025 SCC OnLine NCLAT 1210, Para 29]

27. Applicant has failed to produce any invoice in support of the primary debt claimed in the said Application. Invoices are foundational and mandatory documents for maintaining an Application under Section 9 of the IBC, particularly where the alleged operational debt arises out of supply transactions pursuant to purchase orders. The alleged operational debt therefore is unsubstantiated, uncrystallised and incapable of adjudication under the summary jurisdiction contemplated under the IBC. Reliance is placed on the following judicial precedents:

i. SFO Technologies Pvt. Ltd. v. Vanu India Private Limited [reported in 2023 SCC OnLine NCLAT 301, Para 40] ii. Neeraj Jain v. Cloudwalker Streaming Pvt. Ltd. & Anr. [reported in 2020 OnLine NCLAT 445, Para(s) 42- 48 iii. Devika Resources Pvt. Ltd. v. MAA Manasha Devi Alloys Pvt. Ltd. [reported in 2025 SCC OnLine NCLAT 901, Para 17 & 18]

28. Further, the date of issuance and service of the demand notice under Section 8 of the Code is not the relevant date for determining the applicable threshold under Section 4 of the Code. Reliance is placed on the following judicial precedents: i. Hyline Mediconz Pvt. Ltd. v. Anandaloke Medical Centre Pvt. Ltd. [reported in 2022 SCC OnLine NCLAT 4286, Para 25 & 30]

Analysis and Findings

29. We have heard the Ld. Counsels appearing for both parties and also perused the documents on record.

30. No agreement governing the trade relationship between the Applicant and Respondent has been provided. It is only the purchase orders dated 17.02.2022 and 12.11.2022, and the same are extracted hereinafter:

31. The above purchase order explicitly records that at point 9 the schedule pertains to this PO or will expire after that particular month. Further, pertinently, this purchase order makes no reference to any interest rate or amount.

32. As against the purchase orders, only the invoice, as extracted below, has been produced for MCU:

This invoice also makes no mention of interest payment. Therefore, prima facie it is clear in the present case that there is no written agreement as to payment of interest.

33. Further, in the demand notice dated 27.10.2025 served under section 8, claim has been made for Rs. 1,18,76,780/- (One Crore Eighteen Lakhs Seventy Six Thousand Seven Hundred and Eighty) without any interest. Thereafter, admittedly USD 48,495.60 were paid by the CD to OC on 06.11.2025, because of which alleged dues fell significantly below INR 1 crore. Thereafter, a reply dated 08.11.2025 to the demand notice was made on behalf of the CD to the Applicant. Relevant portion of the reply is extracted hereinafter:

34. The reply makes it clear that the CD paid the admitted dues while refusing to pay the remaining amount on the ground that supply for the remaining amount has not been made as not warranted for the reasons that purchase orders lapsed after a specified validity period. Thus, it is clear that there is a contractual dispute between the parties qua a part of payment demanded in the notice under section 8, which remained unpaid.

35. Only because the dues highlighted in the notice under Section 8 fell significantly below INR 1 crore at the time of filing of the application, the Applicant has added an interest component to inflate the claim to meet the threshold of INR 1 crore. Interestingly, there is neither an agreement to support the claim on interest component nor are there purchase orders and invoices that mention any interest.

36. The CD disputes the payment of remaining dues on the premise that the term was that purchase orders were valid only for a limited period, which the CD is under no obligation to purchase from and pay therefor to the Applicant. Thereafter, in the Application, out of total INR 1,10,81,779/-, the principal amount is only INR 76,96,232/- and the rest is interest amount. The interest amount has been added unilaterally, as there is no written agreement for the same.

37. Section 5(21) defines operational debt as: (21) “operational debt” means a claim in respect of the provision of goods or services including employment or a debt in respect of the payment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority;

Further, section 8 of the code reads as follows:

8. Insolvency resolution by operational creditor. – (1) An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debtor copy of an invoice demanding payment of the amount involved in the default to the corporate debtor in such form and manner as may be prescribed.

(2) The corporate debtor shall, within a period of ten days of the receipt of the demand notice or copy of the invoice mentioned in sub-section (1) bring to the notice of the operational creditor – (a) existence of a dispute, 1[if any, or] record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute; (b) the payment of unpaid operational debt- (i) by sending an attested copy of the record of electronic transfer of the unpaid amount from the bank account of the corporate debtor; or (ii) by sending an attested copy of record that the operational creditor has encashed a cheque issued by the corporate debtor. Explanation. – For the purposes of this section, a “demand notice” means a notice served by an operational creditor to the corporate debtor demanding 3[payment] of the operational debt in respect of which the default has occurred.

Initiation date is defined as follows:

5 (11) “initiation date” means the date on which a financial creditor, corporate applicant or operational creditor, as the case may be, makes an application to the Adjudicating Authority for initiating corporate insolvency resolution process or pre-packaged insolvency resolution process, as the case may be;

Further, section 9 reads as follows:

9. Application for initiation of corporate insolvency resolution process by operational creditor. – (1) After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under subsection (2) of section 8, the operational creditor may file an application before the Adjudicating Authority for initiating a corporate insolvency resolution process.

(2) The application under sub-section (1) shall be filed in such form and manner and accompanied with such fee as may be prescribed.

(3) The operational creditor shall, along with the application furnish- (a) a copy of the invoice demanding payment or demand notice delivered by the operational creditor to the corporate debtor; (b) an affidavit to the effect that there is no notice given by the corporate debtor relating to a dispute of the unpaid operational debt; (c) a copy of the certificate from the financial institutions maintaining accounts of the operational creditor confirming that there is no payment of an unpaid operational debt 1[by the corporate debtor, if available;] 2 [(d) a copy of any record with information utility confirming that there is no payment of an unpaid operational debt by the corporate debtor, if available; and (e) any other proof confirming that there is no payment of an unpaid operational debt by the corporate debtor or such other information, as may be prescribed.]

(4) An operational creditor initiating a corporate insolvency resolution process under this section, may propose a resolution professional to act as an interim resolution professional.

(5) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), by an order– (i) admit the application and communicate such decision to the operational creditor and the corporate debtor if, - (a) the application made under sub-section (2) is complete; (b) there is no 3[payment] of the unpaid operational debt; (c) the invoice or notice for payment to the corporate debtor has been delivered by the operational creditor; (d) no notice of dispute has been received by the operational creditor or there is no record of dispute in the information utility; and (e) there is no disciplinary proceeding pending against any resolution professional proposed under sub-section (4), if any. (ii) reject the application and communicate such decision to the operational creditor and the corporate debtor, if - (a) the application made under sub-section (2) is incomplete; (b) there has been 1[payment] of the unpaid operational debt; (c) the creditor has not delivered the invoice or notice for payment to the corporate debtor; (d) notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility; or (e) any disciplinary proceeding is pending against any proposed resolution professional: Provided that Adjudicating Authority, shall before rejecting an application under subclause (a) of clause (ii) give a notice to the applicant to rectify the defect in his application within seven days of the date of receipt of such notice from the adjudicating Authority.

(6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5) of this section.

38. Furthermore, a reference may be drawn to the judgment of Hon’ble NCLAT in the case of Mosco International Commodities Pvt. Ltd. v. SBEC Sugar Ltd., Company Appeal (AT) (Insolvency) No. 860 of 2024, decided on 25-Feb-26

32. The NCLT vide Impugned Order dated 02.02.2024 rightly dismissed the claim of the Appellant since the Appellant herein was not justified in claiming interest at the rate of 24% per annum since there is no agreement between the Appellant and the Respondent for payment of interest on delay of refunding of advance money, if any. 33. The Interest amount claimed by the Appellant in the Section 9 petition filed before the NCLT, Allahabad does not fall under the term “operational debt” as defined under IBC and the same has also been clarified time and again by various Courts / Tribunals. In this regard, reliance be placed on the following case laws: …

51. Rebutting the contentions of the Appellant, the Respondent brings to our notice that admittedly the statutory notice under Section 8 of the Code was issued by the Appellant herein on 31.05.2022. However, the petition under Section 9 IBC was filed on 20.08.2022 which is the ‘initiation date’ of the proposed insolvency proceedings. The claim of the Appellant on the ‘initiation date’ is Rs. 94,88,845/- (Rupees Ninety Four Lakhs Eighty Eight Thousand Eight Hundred Forty Five Only) which is less than the threshold limit of Rs. 1 Crore as defined under Section 4 (1) IBC which is necessary for maintaining a petition under Section 9 of the Code. This fact has been admitted by the Appellant in its petition and has been duly recorded in the Impugned Judgement. We note that under Section 9 of the Code, the Operational Creditor is entitled to file an application for initiation of Corporate Insolvency Resolution Process (CIRP) provided the quantum of default / debt is Rs. 1 Crore or above as is mandated under Section 4 (1) of IBC as also, there is no pre-existing dispute between the Operational Creditor and the Corporate Debtor.

52. We also note that the Section 5 (11) of IBC clarifies that the ‘initiation date’ for initiating Corporate Insolvency Resolution Process is the date when a petition is filed by a Financial Creditor or Operational Creditor or Corporate Applicant under Section 7, 9 and 10. 53. Furthermore, we note that the mandatory threshold limit of Rs. 1 Crore as defined under Section 4(1) of IBC necessary for maintaining a petition before the NCLT under Section 7, 9 and 11 of IBC is to be ascertained on the date of filing of the said petition i.e. the ‘initiation date’ as is defined under Section 5 (11) of IBC and not on the date of sending of the Demand Notice under Section 8 of IBC. We note that the date of sending the Demand Notice under Section 8 IBC is of no relevance as far as ascertaining the threshold limit is concerned, since the scheme of Code clearly establishes that the threshold limit for instituting a petition under Section 9 of IBC on the date of filing of such petition shall be Rs. 1 Crore or above and not the date of sending the Demand Notice under Section 8 of IBC. Furthermore, it is a fact that it is Part II of the IBC (which deals with Insolvency Resolution and Liquidation for Corporate Person) which will only come into operation if the Operational Creditor (Appellant herein) meets the minimum threshold of Rs. 1 Crore after 24.03.2020, meaning thereby, there is no right to initiate Corporate Insolvency Resolution Process after 24.03.2020 when minimum default is admittedly less than Rs. 1 Crore and therefore the petition filed by the Appellant herein was rightly rejected vide Impugned Order.

54. Thus, it is clear from the combined reading of Section 4 (1), Section 5 (11) and Section 9 of IBC that in the event, the Operational Creditor does not meet the minimum threshold of Rs. 1 Crore, as is mandated under Section 4 of the Code on the initiation date as defined under Section 5 (11) of the Code – a petition under Section 9 of IBC cannot be maintained before the NCLT. That doesn’t mean that the Operational Creditor is left remedy less and it is open for Operational Creditor to approach appropriate fora and can agitate its alleged right of recovery under appropriate law.

39. It is clear from the above judgment that the law is clear that the threshold of INR 1 crore shall be met on the date of initiation, i.e., the date on which an application under Section 9 is filed and not the date of the demand notice. Further, interest component does not amount to operational debt and therefore cannot be added to principal to meet requisite threshold of INR 1 crore in absence of any prior agreement thereon.

40. It is a well-settled law that the proceedings under the Insolvency and Bankruptcy Code, 2016 are meant to initiate a resolution process for defaulting companies and not for the creditors to use the Adjudicating Authority as a recovery forum.

41. Further, prima facie there is a contractual dispute between the parties, regarding payment of remaining principal dues, which needs to be decided by the appropriate court of jurisdiction.

42. We do not find any cogent reason to entertain this application, which is liable to be dismissed on the following grounds discussed in the preceding paragraphs: i. Prima facie the outstanding principal amount is below INR 1 crore, and therefore, the requisite threshold as per section 4 has not been met in the instant case;

ii. There is a cogent pre-existing dispute between the parties, which this adjudicating authority does not have jurisdiction to decide at the stage of admission; and iii. The invoice on record does not support the claim made in the application, and there is a contractual dispute regarding supply of material to be decided by the Court of Law having jurisdiction.

43. Order In view of the above facts and circumstances and the foregoing discussion, we are satisfied that the present petition fails to fulfil the criteria laid down under Section 9 of the Code. It is accordingly, hereby ordered as follows: - i. The Application bearing CP(IB)-168/2026 filed by the Applicant under Section 9 of the Code r/w Rule 6 of the Adjudicating Authority Rules for initiating CIRP against the Respondent is hereby dismissed.

ii. The Registry is directed to send a copy of this order to the Insolvency and Bankruptcy Board of India for their record. No order as to costs.

Sd/- (ANUPINDER SINGH GREWAL) PRESIDENT

Sd/- (RAVINDRA CHATURVEDI) MEMBER (TECHNICAL)