In the matter of NILACHAKRA METAL PROCESSORS PRIVATE LIMITED

NATIONAL COMPANY LAW TRIBUNAL CUTTACK BENCH CP(IB)No. 4tlcBl2O24 (An application under Section 9 of The Insoluency & Bankruptcy Cod.e, 2016 read with RuIe 6 The Insoluencg & Bankruptcg (Applicaiion to Adjudicating Authoritg) Rules, 2 0 1 6)

In the matter of: SOUBHAGYA MINERALS Through its Partner Mr. Pradeep Sahoo Registered office: QN-C/2 1O, Tensa, Po- Tensa Dist- Sundargarh, Pin- 77OO42, Odisha trmail Id-soubhaq--raminerals@qmail.com

Vs. NILACHAKRA METAL PROCESSORS PVT. LTD CIN: U27 I 0 1OR2004PTC007668 Registered Office: Shop No- A- 1 13, Nirmai Market Power house Rourkela, Di st-Sundergarh, Odisha- 76900l Email ID: nmppl@rediffmail. com 1'hrough its directors, l. Amiya Kumar Sahoo lilmail Id-nm 2. Abhijeet Kumar Sahoo trmail Id: nmppl@rediffmail. com 3. Subhra Surajit Sahoo Email Id: nmppl@rediffmail. com AII the 3 Directors residing at A/39, Sector- 4, Rourkeia Dist- Sunclergarh, Odisha- 769002 ....... RESPONDENT/CORPORATE DEBTOR I ORDER PRoNoUNcED Otr: 23.09.20/26

NCLT, Cuttack Bench Cp(IB) No. 4t/CBl2024 CoRanr: CHEEKATT RADHA KRISHNA, MEMBER Juorcral BANWARI LAL MEENA, MEMBER TECHNICAL FoR AElEAE4xeE: FoR AppLrcANr: Mn. Sano.r KUMAR pRusry, ADv FoR RESPoNDENT: MR. ADHIRAJ MoHANTY, ADv. MR. PRASANNAJIT MoHAPATRA, ADv. ORDER

1, The prescnt petition has becn lilecl by Soubhagya Minerals, thc Operu_rtional Crcditor, under Section 9 of the Insolvency and Bankruptcy Code, 2O16 (hereinafter referred to as the ,IBC,/,the Code") rcad with Rule 6 of the Insolvency and Bankruptcy (Applicartion to Adjudrcating AuLhority) Rules, 2016, against Nilachakra Metal processors private Limited, the Corporatc l)cbtor ("CD"), secking initiation of the Corporate Insolvency Iii:s.1urr.n Process ("cIRp") on account of an oper:rtional debt in clel:rult amounting to Rs. 2,85,1 2,OOl I - (Rupces Tr,vo Crore Eighty- Irive Lakh Tu,clve Thousand Threc Hundrccl ancl One only), arising out of the supply of Iron Orc by the Operational Creditor to the CD, alier givir-rg crodit for the payments and adjustments made towards thc outstarnding dues. 2, The Applicant, in its application, has made, inter alia, the following averments: 2,L Thc Applicar-rt, Soubhagya Minerals, submitted that it is a parlnership firm engaged in the business of trading in lron Orc of diffcre nt grades and having its rcgistcred office at HD 62, Phase-II, Chher-rd Colony, Kalinga Bihar, Rourkela_ 76901 5. It is stated that the present application has been rircd through Mr. pradcep Sahoo, onc o[ the partners of the Applicant firm, being the authorised person of the Operational Crcditor.

P.rge 2 of 55

NCLT, Cuttack Bench CP(IB) No. 4LlcBl2o24 2,2 It is further submitted that the CD, Nilachakra Metal Processors Private Limited, is a company engaged in the business of manufacturing of basic iron and steel and had approached the Applicant for supply of Iron Ore. pursuant thereto, the CD issued various Purchase Orders to the Applicant during the period from 10.05.2019 to 16.04.2021 for purchase of lron Ore. 2.3 The Applicant submitted that, pursuant to the aforesaid Purchase Orders and in accordance with the specifications stipulated therein, it supplied Iron Ore to the CD and raised Tax Invoices for the supplies made during the period from 18.05.2019 to 31.05.2021. It is stated that the invoices were accompanied by details of the trucks and permit numbers pertaining to the transportation and delivery of the goods to the CD. 2.4 It is further averred that the CD made part payments towards the invoices raised by the Applicant. The Applicant submitted that the payments against the supplies were made by the CD from time to time on a running account basis. However, according to the Applicant, over a period of time, the payments against the individual invoices raised by it were progressively delayed by the CD. 2.5 The Applicant further submitted that the details of the invoices raised by it and the part payments made by the CD are reflected in the ledger account maintained by the Applicant. It is averred that the said transactions can also be verified from the ledger account maintained by the CD. It is further stated that the last payment toward.s the outstanding dues was made by the CD on 13.O2.2O24 through RTGS. 2.6 The Applicant submitted that, despite repeated requests and follow-ups for clearance of the outstanding invoice amounts, the CD failed to make payment of the dues. It is averred that vn ----'7

NCLT, Cuttack Bench cp(rB) No. 4LlcBl2o24 the CD, on several occasions, assured the Applicant that the outstanding amounts would be cleared shortly, but failed to honour such assurances and continued to defer the payments on one pretext or another. 2.7 It is further submitted that, being constrained by the continued non-payment of the outstanding operational debt, the Applicant caused a Demand Notice under Section B of the Insolvency and Bankruptcy Code, 2016to be issued to the CD on 07.O3.2024, which was served upon the CD through email on the same date and through Speed post on 0g.03.2024. The Applicant initially raised a demand for an amount of Rs. 4,5O,60,8711- towards the outstanding dues. 2.4 The Applicant further submitted that, subsequent to service of the Demand Notice, the CD made a payment of Rs. 1,30,00,000/- on 12.04.2024. It is further averred that thereafter the Applicant purchased certain material from the CD for a sum of Rs. 3S,48,STO l-against a proper invoice, and the said amount was adjusted against the outstanding debt. 2.9 It is averred that, after giving credit for the aforesaid payment of Rs. 1,30,00,000/- and the adjustment of Rs. 35,48,SZOl_, an amount of Rs. 2,85, 12,3011- remained outstanding and payable by the CD. According to the Applicant, despite repeated follow-ups and demands for payment of the remaining outstanding amount, the CD failed to liquidate the said dues and continued to avoid payment by raising different pleas. 2,1O The Applicant submitted that the CD responded to the Demand Notice vide Letter Ref. No. 01/NMppLl2O24 dated, L4.O3.2024. According to the Applicant, in the said reply, the CD admitted the debt, but failed to make payment of the outstanding amount. The Applicant therefore contends that /1 \J -l

NCLT, Cuttack Bench cp(IB) No. 4LlcBl2O24 outstanding amount. The Applicant therefore contends that the liability towards the operational debt stands admitted by the CD. 2.ll h is further submitted that the debt claimed by the Applicant constitutes an "operational debt" within the meaning of Section 5(21) read with Section 5(20) of the Insolvency and Bankruptcy Code, 2016, as the same arises out of the supply of goods, namely Iron Ore, by the Operational Creditor to the CD. 2.t2 The Applicant has stated that the Demand Notice issued under Section 8 of the Code was received by the CD on O9.O3.2O24 and that the CD, in its reply dated 18.03.2024, admitted the debt. On this basis, the Applicant has pleaded that the date of default is 09 .03,2024. 2.13 Accordingly, the Applicant has claimed that an amount of Rs. - 2,85,12,301 I (Rupees Two Crore Eighty-Five Lakh Twelve Thousand Three Hundred and One only) is due and payable by the CD towards the operational debt, after accounting for the subsequent payment and adjustment referred to hereinabove, and has sought initiation of Corporate Insolvency Resolution Process (CIRp) against the CD under Section 9 of the Code. 3. The Respondent/CD ('CD"), in its reply affidavit, has made, inter alia, the following averments: 1 3. The Respondent submitted in April 2019, that the Respondent company had engaged Mr. pradeep Kumar Sahoo as a Manager to oversee the operations and management of the company. 3.2 In respect of the preliminary objection to maintainability, the CD has submitted that the present application is not maintainable on account of a pre-existing dispute between the parties concerning, inter alia, the alleged forgery of a purchase C"l

NCLT, Cuttack Bench cP(IBf No. 4LlcBl2o24 Order and the quality of the Iron Ore supplied by the Applicant to the CD. 3.3 The CD has alleged that it had issued a notice to the Applicant regarding the alleged forgery of Purchase Order bearing No. SM/NMPPL/O112021.-22 dated 11.06.2024. According to the Respondent, the said Purchase Order had been altered without authorisation so as to reflect different terms and conditions. It is further alleged that the signature and seal appearing on the said Purchase Order do not correspond with those of the authorised signatory of Nilachakra Metal Processors Private Limited. The Respondent has contended that the allegedly iorged Purchase Order was used for obtaining goods/ services under false pretences and that GST was paid on 31.05.2021 in respect of the said purchase Order. 3.4 The CD has further submitted that, along with the notice regarding the alleged forgery, it also issued an application concerning the supply of low-grade Iron Ore by the Applicant. It is averred that, as per the Purchase Order allegedly agreed between the parties, the Iron Ore supplied was required to contain 600/o or more Iron (Fe) content, whereas, according to the Respondent, the Iron Ore actually supplied by the Applicant contained only 54o/o Iron (Fe) and was therefore substantially below the stipulated specification. The Respondent has stated that an application in this regard was issued on the same date as the notice concerning the alleged lorgery. J.5 On the basis of the aforesaid allegations, the CD has contended that there exists a genuine and substantial pre-existing dispute between the parties with regard to the authenticity of the Purchase Order and the quality of the goods supplied. It is therefore submitted that the requirements for initiation of proceedings under Section 9 of q '--7

NCLT, Cuttack Bench CP(IB) No. 4rlcBl2024 the Code are not satisfied and that the application filed by the Applicant is liable to be rejected. 3.6 The Respondent has further stated that there is an NtrSL certiflcate indicating the acceptance or denial of the debt between the parties. 3.7 The CD has also disputed the Applicant's allegation contained in Part IV, paragraph 1 ofthe application regarding dishonour of a cheque bearing No. O000OO147262 dated 24.OL.2O24 on account of insufficiency of funds. According to the Respondent, the said allegation is false and without merit, as the CD claims not to have received any notice from the bank regarding dishonour of the cheque. It is further submitted that the CD had, instead, issued a letter proposing an amicable settlement for a sum of Rs. 1 ,00,00,000/ -, which proposal was not accepted by the Applicant. 3.8 The Respondent has thereafter placed on record the circumstances in which the dispute between the parties allegedly arose. It is submitted that the Applicant, namely Soubhagya Minerals, was connected with the CD through Mr. Pradeep Kumar Sahoo, who, according to the Respondent, was a manager of the company and was subsequently a disgruntled employee of the CD. 3.9 The CD has stated that on 25.11.2O2O, the company suffered the untimely demise of its then Director, Shri Akshaya Kumar Sahoo. Thereafter, the present Respondent, Mr. Kumar Abhijeet Sahoo, being the legal heir, was appointed as a Director of the company. 3. 1O It is further submitted that, upon assuming the position of Director and being new to the intricacies of the business, the Respondent allegedly faced discouragement from the Manager in implementing new decisions intended for the growth of the company. According to the Respondent, despite such e4 =

NCLT, Cuttack Bench CP(IB) No. 4LlcBl2O24 difficulties, elforts were consistently made to resolve the issues amicably and maintain operational harmony and to prevent any potential loss to the company. 3. 1 1 The Respondent has alleged that in November 2021, lhe Manager abruptly stopped the functioning of the plant and issued threats demanding settlement of his accounts. According to the CD, a subsequent investigation revealed alleged fraudulent activities on the part of the Manager, including raising substantially inflated bi1ls in favour of his partnership firm, M / s Soubharya Minerals, in the name of the CD. It is alleged that such bi11s amounted to approximately Rs. 4,56,00,000/- (Rupees Four Crore Fifty-Six Lakhs only). 3.12 The CD has further alleged that, upon being confronted in a face-to-face meeting, the Manager unequivocally admitted to having committed acts of forgery by raising fake invoice bills. According to the Respondent, the Manager was in possession of the letter pads of the CD and requested that no legal action be initiated against him, while agreeing to settle the matter amicably. 3.13 It is further alleged that, despite the aforesaid assurance, the Manager stopped responding to the communications of the CD after a few days and absconded from the business, thereby causing financial losses to the Respondent. The CD has specifically alleged that the Manager also failed to return several essential documents, records and assets of the company which had been entrusted to him during his tenure as Manager, including account papers, mining log books, company laptops, hard drives, pen drives, computer digital signature files, company letter pads, company stamps, official seal and company cheque books. 3. 14 The Respondent has further submitted that, after considerable efforts, the Manager was located approximately

=? P:rgc 8 of 55 Cl

NCLT, Cuttack Bench CP(IB) No. 4tlcBl2O24 one year thereafter. According to the CD, upon being confronted, the Manager threatened to withhold the aforesaid vital company documents and assets unless the alleged outstanding amount generated by him was settled. It is the case of the Respondent that, owing to the urgency of regaining control over the company's operations and retrieving its critical documents and assets, the CD was a11eged1y left with no viable alternative but to accede to the Manager's demand. 3.15 The CD has stated that an amount of Rs. 2,00,00,000/- (Rupees Two Crore only) was paid to the Manager in an attempt to amicably settle the matter and secure the return of the company's assets and documents. The Respondent has, however, characterised the said payment as having been made under duress and compulsion, in the circumstances pleaded by it. 3,16 The CD has further submitted that it subsequently lodged an FIR against the Applicant on 25'09'2024, alleging tlne aforesaid acts and circumstances. 3.17 The CD has contended that the claim raised by the Appllcant is not an undisputed operational debt but is the subject matter of serious disputes concerning the authenticity and alleged forgery of the Purchase Order, quality and specification ofthe Iron Ore supplied, alleged fake and inflated invoices, the alleged conduct of the Applicant's partner/ Manager, the alleged payment of Rs. 2,00,00,000/- and the subsequent criminal proceedings. The Respondent therefore submits that the present application under Section 9 of the Code is devoid of merit and is liable to be dismissed. 4. The Applicant, in its rejoinder to the reply ftled by the Respondent/CD ('CD"l, has, inter alia, made the following averments:

--7 el t'agc 9 of 55

NCLT, Cuttack Bench CP(IB) No. 4rlcBl2024 4,L The Applicant has specifically disputed the contention of the CD lhat the Purchase Orders bearing Nos. dated sM/NMPPL/ lOt l20-21 15.12.2020, dated 1.6.01.2021 sM/NMPPL/ rO9l2O-2t and It SM/NMPPL/05120-21 dated 16.04.202 1 were forged. is submitted that the aforesaid Purchase Orders may have contained certain clerical mistakes which were not noticed by the Applicant at the time of the transactions; however, according to the Applicant, the underlying transactions were admittedly acted upon between the parties and the goods covered by the said Purchase Orders were actually supplied to and consumed by the CD. 4.2 The Applicant further submitted that the CD had itself acknowledged the underlying transactions by taking Input Tax Credit ("lTC") in its GST returns in respect of the goods supplied by the Applicant. According to the Applicant, the GST Returns filed by the CD establish that the transactions actually took p1ace, that the goods/material were received and consumed by the CD and that the CD availed the corresponding ITC. It is therefore contended that the subsequent plea of forgery of the Purchase Orders is merely a mistake or an afterthought on the part of the CD and cannot be relied upon to contend that there was a pre-existing dispute. 4.3 The Applicant has, furnished a tabular statement setting out the Purchase Orders disputed by the CD, the corresponding invoices raised by the Applicant and the GST Returns filed by the CD wherein the corresponding transactions and availment of ITC are reflected. According to the Applicant, the said tabular details demonstrate that the disputed Purchase Orders were acted upon and the goods covered thereunder were received and utilised by the CD.

C"{

NCLT, Cuttack Bench CP(IB) No. 4tlcBl2O24 4.4 In respect of Purchase Order No. SM/NMPPL/1OIl2O-21 dated 15.12.2020, the Applicant submitted that the corresponding invoices raised were GSTI2O-21 1102 dated Or .ot .2021, GST I 20-21 I 1 04 dated 27 .oI .2021 and GST/ 20- 21 llOS dated 30.01,2O21. It is stated that the CD disclosed the corresponding transactions in its GST Returns for February 2O2I, flled on 14.03.2021, and availed Input Tax Credit in respect thereof. 4.5 In respect of Purchase Order No. SM/NMPPL/1O9 l2O-21 dated 16.01 .2021, the Applicant submitted that the corresponding invoices were GSf l20-21 l106 dated t3.o2.2O21, GST l2o-2rl 107 dated 19.o2.2O2r, GST/20- 21 I tOB dated 23.o2.2O2t, GST I 20-21 I tog dated 27.O2.2o2t, GSTI20-21 1111 dated 28.O3.2O2I' GST/20- 2ll7l2 dated29,O3.2021, GST/20-21 lll3 dated 30.03.2021 and GST/20-21 lll4 dated 31.03.202 1. According to the Applicant, the corresponding GST transactions were disclosed by the CD in its GST Returns for March 2021, filed on 14.04.2027, and April 2021, filed on 29.05.2021, thereby evidencing receipt and consumption of the goods and availment of ITC by the CD. 4,6 In respect of Purchase Order No. SM/ NMPPL/ 05120-21 dated 16.04.2021, the Applicant submitted that the said Purchase Order was acted upon by the parties and that the Applicant supplied goods thereunder and raised invoices bearing Nos. GST l2I-22101 dated 3o.o4.2o21, GST 121-22104 dated 3l .O5.2021 and GST/ 2 1 -221 OS dated 3 1 .05.202 1. It is submitted that the CD disclosed the said transactions in its GST Returns for July 2021, filed on 14.08.2021, and availed Input Tax Credit in respect of the said invoices. 4,7 The Applicant has further clarified, in response to the CD's allegation regarding Purchase Order No. S,-) d -'-::z Pargc 11of 55

NCLT, Cuttack Bench CP(IB) No. 4LlCB|2O24 SM/NMPPL/0112021-22 dated 16.04.2021, that the said document referred to by the CD in its notice dated 11.06,2024 was, in fact, the Offer Letter of the Applicant and not the Purchase Order issued by the CD. It is submitted that pursuant to the said Offer Letter, the CD itself issued Purchase Order No. SM/NMPPL/0512021-22 dated 16.04.2021, against which the Applicant supplied the goods and raised the aforesaid invoices. 4.A The Applicant further submitted that the goods supplied against the aforesaid Purchase Order were actually consumed by the CD and that the CD availed ITC in its GST Return for Jrtly 2O2l. According to the Applicant, the aforesaid documentary material conclusively demonstrates that the transaction was acted upon by the CD and that the allegation that the Purchase Order was forged is an attempt to avoid the liability arising from the supply of goods. 4,9 The Applicant has further submitted that the CD had annexed two other Purchase Orders of similar nature at Pages 19 and 20 of its reply. According to the Applicant, against those Purchase Orders a1so, the Applicant had supplied goods in accordance with the agreed specifications and raised the corresponding invoices. It is stated that the CD consumed the said goods and disclosed the corresponding transactions in its GST Returns for February 2O2l and March 202, while 1 availing Input Tax Credit. 4, LO The Applicant has, therefore, contended that the allegations of forgery of the Purchase Orders and supply of inferior quality Iron Ore made by the CD are concocted and false and have been raised only as an attempt to evade the admitted debt liability. It is submitted that the contemporaneous conduct of the CD in accepting the goods, consuming the same and availing ITC in its GST Returns is inconsistent with the q ,7

NCLT, Cuttack Bench CP(IB) No. 4LlCBl2O24 subsequent allegation that the transactions were based upon forged Purchase Orders or that the goods were not duly supPlied. 4.11 The Applicant submitted that the Applicant was working as a Manager of the CD in 2Ol9,lt is submitted that the CD has made such an allegation without producing any material or proof in support thereof. The Applicant has therefore disputed the attempt of the CD to establish any employer-employee or managerial relationship between the Applicant and the CD. 4.12 Tine Applicant has reiterated that the Purchase Order referred to by the CD in its notice dated 11.06.2024 ' namely SM/NMPPL/0 1l2O2l-22 dated 16.04.2021, was actually the Offer Letter issued by the Applicant, against which the CD had itself issued Purchase Order No. SM/NMPPL/OI12021-22 dated 16.O4.2021. 4,13 The Applicant has further submitted that the goods supplied pursuant to the aforesaid Purchase Order were duly received and consumed by the CD and the corresponding ITC was availed by it in its GST Returns. According to the Applicant, this contemporaneous documentary record belies the CD's allegation that the Purchase Order was forged or that the goods supplied were of inferior quality. The Applicant has accordingly characterised the allegations contained in paragraph 5 of the reply as a concocted story raised to avoid payment of the outstanding operational debt. 4.L4 The Applicant submitted that it has already established the existence of the debt and that there was no pre-existing dispute between the parties. The Applicant has relied upon the transactions, invoices and GST Returns referred to hereinabove in support of its contention that the debt arose from actual supplies made to and accepted by the CD. q /a V ---=r?

NCLT, Cuttack Bench CP(IB) No. 4LlcBl2O24 4.15 According to the Applicant, during the period when Late Shri Akshay Kumar Sahoo was managing the affairs of the CD, the business relationship and transactions between the Applicant and the CD were running smoothly. The Applicant has further submitted that after Mr. Kumar Abhijeet Sahoo assumed charge of the affairs of the CD, hindrances a11egedIy started being created not only in the transactions with the present Applicant but also, according to the information available with the Applicant, in dealings with other parties. 5. The Applicant, in its written note with regard to the date of default with reference to the invoices relied upon by it, has, inter alia, made the following further submissions: 5.1 The Applicant submitted that the entire transaction between the parties pertains to the period 2079 to 2021, during which the CD issued 23 Purchase Orders to the Applicant between 10.05.2019 and 16.04.2021. According to the Applicant, against the said Purchase Orders, it supplied the goods in accordance with the specifications stipulated therein and raised 46 Tax Invoices during the period from 18.05.2019 to 31.o5.2021. 5,2 The Applicant submitted that, during the course of hearing, this Adjudicating Authority had directed/ suggested the Applicant to specifically identify the date of default with reference to the invoices pertaining to the debt claimed in the present application. In response thereto, the Applicant has relied upon the relevant Purchase Orders, Tax Invoices and the corresponding GST Returns of the CD and has furnished an invoice-wise/ tabular statement to demonstrate the transactions forming the basis of its claim. 5.3 In the said tabular statement, the Applicant has specifically identified the following Purchase Orders, corresponding Tax

-7 Pagc 14 of 55

NCLT, Cuttack Bench CP(IB) No. 4tlcBl2O24 Invoices and the GST Returns filed by the CD wherein the transactions were disclosed and Input Tax Credit was availed:

Purchase Tax Invoices raised by the Applicant GST Return of Order the CD dlsputed by reflecting the the CD invoices/ITC SM/NMPPL/ 1 GST I 20-21 I 1O2 dated O1.O1.2O21; February 2O2t, rO4 dated filcd otl2o-2L GS^l l20-21 I 27 .O\ .2021; on dated cSll20-21 dated 3O.O1.2021 14.o3.2o2L 1105 L5.t2.2020 \06 dated March SM/NMPPL/ 1 GST l20-21 I 13.02.2021; 2021, 09l2o-2L GST l2O-2r llOT dated 19.O2.2O21; filed on dated GSTI20-21 l1o8 dated 23.02.2021; L4.O4,2O2L, and L6.OL.2021 cST l20-21 I 1O9 dated 27 .02.2O2I; April 2O21, filed lll dated cST l20-21 I 28.03.2021; on29.O5.2O2l GSTI2O-2lll12 dated 29.03.2021; r13 dated cST l2o-2t I 3O.o3.2O21; GST l20-21 I 1 14 dated s1.O3.2021 SM/NMPPL/O GSTI2I-22101 dated 3o.O4.2O2r July 2021, filed 5/2O-21 dated cSTl2t-22104 dated 31,O5.2o21 on 14.O8.2O21 16.o4.202L GST I 21-22 I 05 dated 31,O5.2o21

5.4 With particular reference to Purchase Order No. SM/NMPPLi 05120-21 dated 16.O4.202 1, the Applicant submitted that the said Purchase Order is at page 93 of Annexure-A4, while the corresponding Tax Invoices bearing Nos. GST/21-22lOL dated 30.O4.2O2 t, GST I 2 1 -22 I 04 dated 3 1,O5.2O2 I and GS"l I 2 I -22 / OS dated 31.05.2021. It is submitted that the CD disclosed the aforesaid Tax invoices in its GST Return for July 2021, and availed InputTax Credit in respect thereof. According to the Applicant, such disclosure and availment of ITC establishes that the CD received and consumed the goods without raising any dispute.

SJ I Cr ---'-- -)

NCLT, Cuttack Bench CP(IB) No. 4LlcBl2024 5.5 The Applicant further submitted that against the total invoice value of Rs. 9,74,73,507 l-, an amount of Rs. 4,50,60,8711- remained unpaid despite repeated follow-ups. Consequently, the Applicant issued a Demand Notice under Section 8 of the Code in Form-3 on 07 lOB.O3.2024, along with the relevant Purchase Orders and Tax Invoices, through email and Speed Post. According to the Applicant, the said Demand Notice was received by the CD on 09.O3.2O24. 5.6 It is further submitted that the CD replied to the Section B Demand Notice on 18.03.2024 vide its reply, according to the Applicant, the CD admitted the debt and demonstrated its stated intention to liquidate the outstanding liability. 5.7 The Applicant submitted that, subsequent to the aforesaid rep1y, the CD made a payment of Rs. 1,30,00,000/- on 12.04.2024. Thereafter, the CD also sold goods to the Applicant to the value of Rs. 35,48,570/-, and the said amount was adjusted against the outstanding debt. According to the Applicant, after giving credit for the aforesaid payment and adjustment, the remaining amount of Rs. 2,85,12,301/- continued to remain unpaid. It is stated that, consequently, the Applicant filed the present Section 9 application on 27.06.2024 seeking resolution of the outstanding debt, treating O9.O3.2O24, i.e., the date on which the CD received the Section 8 Demand Notice, as the date of default. 5.8 The Applicant submitted that the CD was attempting to establish a pre-existing dispute on the basis of its notice dated 1 I .06.2024, wherein it alleged that certain Purchase Orders had been altered without authorisation so as to reflect different terms and conditions. 5.9 The Applicant clarified that the Purchase Order number SM/NMPPL/0112021-22 dated 16.O4.202 1, referred to by the CD in paragraph 5(a) of its rep1y, was in fact the number of the Offer Letter issued by the Applicant. According to the Applicant, against the said Offer Letter, the CD itself issued Purchase Order No. NMPPL/SM/0512021-22 dated 16.04.2021. The Applicant has

\d =7 "fl,"""fi,":TltiilUl therefore contended that the allegation offorgery or alteration ofthe Purchase Order is a concocted story and that the discrepancy was merely a mistake committed by the staff of the CD, which the Applicant did not notice during the course of the transaction. 5.I"oThe Applicant has further emphasised the chronolog; of events and submitted that the notice dated 17.06.2024, relied upon by the CD to allege a pre-existing dispute, was issued only after the CD had replied to the Section 8 Demand Notice on 18.03.2024, allegedly admitting the debt, and had thereafter made a part payment of Rs. 1,30,00,000/- on 12.04.2024. It is further submitted that an additional amount of Rs. 35,48,57 O I - was adjusted against the debt towards goods sold by the CD to the Applicant between 27.O5,2024 and 29 .O5.2024. On this basis, the Applicant contends that the CD, having admitted the debt and made part payment thereof, cannot subsequently rely upon the notice dated 1LO6.2024 to contend that there existed a pre-existing dispute. S.LlThe Applicant has stated that the allegations concerning the Respondent taking charge of the company on 25.1L2O2O, the alleged discouragement of the Respondent by the Appticant, cessation of the functioning of the company, the alleged investigation in November 2021, alleged inflation of bills to the extent of Rs. 4,56,00,000/ -, alleged admission of forgery, alleged agreement to settle the matter amicably, alleged absconding by the Applicant, alleged non-return of company assets and documents, and the alleged subsequent payment of Rs. 2,00,00,000/- by the CD. 5,12The Applicant has further submitted that the CD has not produced any documentary material evidencing the alleged investigation which purportedly revealed inflation of bills; any evidence of the Applicant's alleged admission of forgery; any document evidencing an alleged amicable settlement; any police complaint regarding the alleged threat by the Applicant to withhold the company's q q I'a.ge 17 of 55 =7

NCLT, Cuttack Bench cP(IBl No. 4tlcBl2o24 documents and assets; or any proof evidencing payment of Rs. 2,00,00,000/- to the Applicant. 5.LSThe Applicant has stated that the CD lodged an PIR on25.O9.2024, being Lahunipada P.S. FIR No. L97 12024, under Sections 408, 448, 468 and 506 of the IPC. It is further submitted that pursuant thereto GR Case No. 817 I 2024 was registered before the learned SDJM, Bonai. The Applicant submitted that on I8.O2.2O25, the Investigating Officer submitted the Final Form stating that there was "insufficient evidence to the a11egations." Thereafter, the Respondent filed a protest petition against the Final Form submitted by the IIC, Lahunipada. According to the Applicant, the learned SDJM, Bonai, after consideration of the matter, allowed the protest petition vide Order No. 06 dated 26.09.2025 and directed the IIC, Lahunipada to conduct further investigation and submit a report within 30 days. 5.L4lt is further submitted that, owing to the delay in submission of the further investigation report, the learned SDJM, Bonai, vide order dated 26.O2 .2026, called for a report regarding the non-submission of the report and the status of the investigation, failing which the matter was directed to be reported to the SP, Rourkela for further action. On the following day, i.e., 27.O2,2026, the case record was placed before the learned SDJM upon receipt of a letter from the IIC, Lahunipada bearing DR No. 479 dated 27.O2.2026. 5. 1SThe Applicant further submitted that, upon the IIC explaining that he had recently joined the Police Station on 12.01.2026 and was otherwise engaged in 1aw-and-order duties, the learned SDJM, Bonai permitted the IIC to submit the investigation report and directed that the matter be listed on the date fixed, stated in the note as 26.O3.2024, awaiting the further investigation report. 5, I" 6The Applicant has further stated that, while the GR Case was pending, the Respondent filed CRLMP Case No. 244 12026 before the Hon'ble High Court of Orissa at Cuttack on 19.O2.2026, seeking

-:7 t'age 18 of 55

NCLT, Cuttack Bench 4tlcBl2o24 CP(IB) No. a direction for transfer of the investigation to the Economic Offences Wing (trOW). Upon notice from the Hon'ble High Court, the IIC, Lahunipada filed an alfidavit/ report stating that the further investigation had revealed no such forgery in the documents, that the investigation was sti1l in progress and that, since the amount involved was more than Rs.1 crore, the investigation could be transferred to the trOW. 5. L7lt is submitted that, on the basis of the report of the IIC, Lahunipada, the Hon'ble High Court, vide order dated 24.O3.2026, directed that the investigation be transferred to the EOW. The Applicant has relied upon the aioresaid subsequent developments to contend that the allegations of forgery made by the CD cannot, at this stage, be treated as established allegations against the Applican t. 5. l8The Applicant has particularly relied upon the chronology of the CD's conduct, namely: (a) its reply dated 18.03.2024 to the Section 8 Demand Notice dated 07 I O8.O3,2O24, which, according to the Applicant, admitted the debt; and (b) the subsequent part payment made by the CD towards the said debt. It is contended that the allegations now relied upon by the CD to establish a dispute arose only subsequently and therefore constitute an attempt to avoid its liability and create a dispute where, according to the Applicant, none previously existed. 5.19The Applicant has further submitted that although the CD has repeatedly disputed the genuineness of the Purchase Orders, it has remained silent regarding the genuineness of the Tax invoices raised by the Applicant. The Applicant submits that the CD itself disclosed the said Tax Invoices in its GST Return for July 2027 and availed Input Tax Credit thereon. According to the Applicant, such conduct establishes that the CD received the goods and consumed the same in full, without raising any contemporaneous dispute or issuing any debit note.

gt ....-.--.> "fii,',l,.:Tl):ii;Ul 5.2OThe Applicant has further relied upon additional documentary material to establish the supply and receipt of Iron Ore pursuant to the Purchase Order dated 16.04.2021, namely: (a) a copy of the registration number allotted to the Applicant by the Indian Bureau of Mines, Government of India; (b) two copies of permits granted to the Applicant by the Department of Steel & Mines in Form-I dated 15.O4 .2021, permitting procurement of 19 ,984 .323 MT of ore from SAIL (Steel Authority of India Limited) and sale thereof to the CD; (c) two copies of permits granted to the CD by the Department of Steel & Mines in Form-l dated 16.04.2021, permitting procurement of 19,984.323 MT of ore from the Applicant; and (d) two copies of Form-L, being the monthly returns filed by the CD before the Department of Steel & Mines, showing procurement of 19,981.04 MT of material lrom the Applicant. 5,21The Applicant has submitted that, pursuant to the permission granted to it in Form-l dated 15.04.2021 for procurement and sale ol 1,9,984.323 MT, the CD obtained permission in Form-l dated 16.O4.2021. for procurement of the material from the Applicant. It is further submitted that the Form-L returns for April and May 2027, filed by the CD in respect ofreceipt oflron Ore, disclose that the CD received 19,981.O4 MT from the Applicant for its end use. 5,22\t is further submitted that the aforesaid quantity of 19,981.04 MT corresponds with the quantity covered by the three Tax Invoices referred to hereinabove, and that the CD disclosed those invoices in its GST Return for July 2O2l and availed the corresponding Input Tax Credit. On this basis, the Applicant contends that the contemporaneous statutory and tax records establish that the transaction for supply of Iron Ore actually took place between the parties, that the goods were supplied and received, and that the CD consumed the same.

4 =7 s{ Pasc 20 of 55

NCLT, Cuttack Bench CP(IB) No. 4LlcBl2024 6, The Respondent, in its reply to the written note wlth regard to the date of default with reference to the invoices relied upon by it, has, inter alia, made the following further submissions: I The Respondent submitted that the alleged debt of 6. Rs.2,85,12,301/- arising from the business transactions is false and has been created owing to the alleged conduct of Mr. Pradeep Kumar Sahoo, who, while working as Operations-cum-Accounts Manager and key managerial personnel of the Respondent Company, was also a partner of the Applicant firm. It is alleged that, by taking advantage of his fiduciary position and access to the affairs of the CD, he created bogus purchase orders to nullify the outstanding credit/ liability standing against the Applicant. The Respondent therefore contends that the dispute between the parties predates the Purchase Order dated 16.O4 .2021. 6.2 It was further submitted that, in the ordinary course of the parties' transactions relating to procurement of iron ore, payments were made in advance to the supplier at the request of the crusher unit/ consumer, and supply on credit was commercially unlikely. The Respondent relied upon the earlier purchase orders and transactions to contend that the subsequent purchase orders were contrary to the established course of dealing. According to the Respondent, the 23 purchase orders issued between 10.05.2019 and 16.04.202 1 disclose a marked difference between the earlier genuine purchase orders and the subsequent disputed purchase orders. It is specifically alleged that the purchase orders dated 15.12.2020, 16.01 .2O2I and 16.O4 .2021 were issued upon the Respondent Company itself and contained discrepancies from the standard purchase-order format. 6.3 The Respondent has pointed out the discrepancy in the reference number appearing in the Purchase Order dated 15.72.2020. According to the Respondent, while the demand notice dated q -2 z

NCLT, Cuttack Bench CP(IB) No. 4llCBl2O24 .O3.2O24 refers to the purchase order as OT -NMPPL/ SM/ lol 2O2O-21", the purchase order itself bears I "SM/NMPPL/ 1Ot l2O2O-21". Similar inconsistencies are alleged in the subsequent purchase orders. The Respondent consequently disputes the genuineness of the purchase orders relied upon by the Applicant. 6.4 With regard to the Applicant's reliance upon Input Tax Credit ("lTC'), the Respondent submits that the same does not establish consumption of the alleged goods or existence of the alleged debt. It is alleged that Mr. Pradeep Kumar Sahoo continued to have unauthorised access to the CD's GST credentials, secured data, pen-drive and sensitive documents. The Respondent points out that the Applicant itself annexed GST Returns of the CD for February to April 2O2l and July 2022 with its Rejoinder dated 16.10.2025, and therefore ca11s upon the Applicant to explain how it obtained the confidential GST records. The Respondent further states that it had approached the GST authorities, who allegedly informed it that such information was confidential and had not been supplied to any third person.

6.5 The Respondent further alleges that the disputed purchase orders resulted in the creation of forged and inflated invoices. It submits that during trY 2Ol9-2O, the Applicant had issued invoices aggregating to Rs.4,16, 14,O4O.361-, and during FY 2O2O-21, up to 30.O9 ,2O2O, 1 1 invoices aggregating to Rs.5,O 1 ,0 1 ,28 6.54 I - . According to the Respondent, the aggregate amount of Rs.9, 17, 15 ,3761 - :under these earlier transactions was accepted, acknowledged and paid by it, whereas the invoices arising from the purchase orders dated 15.12.2O2O, 16.Ol.2O2l and 16.04.2O21 are disputed as forged, fabricated, inflated and manufactured. 6.6 The Respondent further relies upon the agreed rate of Rs.2,200/-per metric tonne (PMT) for iron ore as reflected in Form L. It Pase 22 ol 53 -(.r "il,"*;i.:Tl?':"i;3;\ alleges that Mr. Pradeep Kumar Sahoo, by misusing his position as key managerial personnel of the Respondent and his simultaneous position as partner of the Applicant firm, unilaterally inflated the rate in the disputed purchase orders dated 15.12.2O2O, 16,Ol.2O2l and 16.04.2027. The Respondent has relied upon Form I filed with the Department of Steel and Mines for December 2O2O in support of its contention.

6.7 According to the Respondent, it had paid Rs.25,67 ,16,2631 -during FY 2019-2022 towards supply of 60,000 tonnes of 60+ Fe grade iron ore fines. It contends that the amount payable against genuine invoices was substantially lower and that, as per the agreed rate of Rs.2,200/- PMT, the approximate payable amount was Rs.13,85,14,553.10/-. The Respondent therefore disputes the Applicant's computation of outstanding dues and maintains that the Applicant had, in fact, received excess payments. 6.8 The Respondent has placed reliance upon its Kotak Bank statements for FY 2O2O-2O24 and Form i permits dated 12.12.2020, 04.Ol.2O2l, O3.O2.2021 and 12.03,2O21 in support of its reconciliation and payment-related contentions. 6.9 The Respondent specifically disputes the Applicant's contention that Rs.4,50,6O,87 1 I - remained unpaid after repeated follow-ups and that a demand notice under Section B was issued. It submits that no prior demand notice or letter demanding such amount was ever served upon it and that the alleged credit was clandestinely created with an intention to invoke the insolvency j urisdiction.

6, 1OThe Respondent further contended that its reply dated 18.O3.2024 to the demand notice dated 07.03.2O24 was wrongly treated by the Applicant as an admission of the alleged debt. According to the Respondent, the said reply merely referred to a mutually agreed amount of Rs. 1.30 crores, arrived at through prior WhatsApp and telephonic communications for closure of the :7 S.l "ili,fli":Tl?"&i;Ul dlspute and allegedly agreed to under duress. The said amount was subsequently paid on 12.04.2024, and material worth Rs.35,48,570/-, stated to be substandard, was also returned. The Respondent maintains that the letter dated 18.O3.2024 does not constitute an admission of liability of either Rs.4,50,60,871/ - or Rs.2,85,12,301/ -. 6. 11The Respondent also alleges that the Applicant suppressed the payment of Rs.1.75 crores and other material facts from the original Section 9 petition. According to the Respondent, after the said payment was brought to its notice through the Respondent's rep1y, the Applicant flled I.A. No.196l2025 seeking amendment of the Section 9 petition, nearly one year after its institution.

The Respondent contends that the necessity for such amendment demonstrates suppression of material facts in the original petition. The Respondent also relied upon the order of this Tribunal permitting it to raise its objections at the final hearing and the order dated 13.02.2026 passed by the Hon'ble NCLAT in Company Appeal (AT) (lns) No.271 of 2026, whereby the appeal was dismissed while protecting the Respondent's right to raise its objections at the hearing of the Section 9 application. 6. 12The Respondent submitted that the Applicant never rebutted the contents of its letter dated i8.03.2024, excepl by asserting that the same constituted an admission of debt. According to the Respondent, the Applicant's conduct amounted to acquiescence in the terms stated in the said letter. It further submits that the figures appearing in the demand notice dated 07 .O3.2O24, amended Section 9 petition dated 24.06.2O25 and Written Note dated 27.O4.2026 suffer from material inconsistencies, including inconsistencies concerning the date and amount of the alleged last payment. 6,13The Respondent has additionally pointed out discrepancies between the amounts mentioned in the three invoices relied upon "fl,"#.i.:Tl?':"i;t;\ in the Written Note and the amounts reflected in the Applicant's GST Returns annexed with its Rejoinder dated 16.10.2025.

The disputed invoices are Invoice Nos. GST/ 2 1 -22 I Ol, GST/ 2 1 - 22104 and GST 121-22105, and according to the Respondent, the differences run into several lakhs of rupees. The Respondent submits that these are not mere rounding-off differences but material inconslstencies affecting the reliability of the Applicant's claim. 6. I"4The Respondent further stated that its notice of dispute dated 11.06.2024 was not rebutted by the Applicant. In the said notice, the Respondent allegedly raised specific objections regarding unauthorised alteration of the Purchase Order dated 16.O4.2O2I and forgery/ fabrication of the Respondent's signature, seal and stamp. It was also alleged that the Applicant had itself placed the purchase order and obtained goods/services under false pretences and paid GST against the same on 31.05.202 1 without authorisation. 6.1SThe Respondent relied upon the WhatsApp communication dated 05.06.2024, contending that the Applicant acknowledged that, out of an agreed amount of Rs.1.80 crores, Rs. 1,75 crores had already been received and that only Rs.5 lakhs remained payable.

The Respondent submits that this communication demonstrates the Applicant's own acknowledgment of the payments made and contradicts its subsequent claim of Rs.2,85,12,3Oll-. 6, 16The Respondent reiterated that the purchase orders dated 15.12.2O2O, 16.O1.2021 and 16.04.2021 were forged, fabricated and manufactured by Mr. Pradeep Kumar Sahoo by allegedly misusing his position as key managerial personnel of the CD while simultaneously acting as a partner in the Applicant firm. The Respondent states that the alleged fabrication and inflation of the purchase orders is under investigation by the EOW Crime Branch, pursuant to FIR No.7 of 2026.

C"l z "ili,'fii.:Tiit"i;t;\ 6.171t is further alleged that the Applicant had illega11y retained the credentials, sensitive information and important documents of the Respondent Company, including its mining log book, thereby allegedly paralysing the operations of the CD. The Respondent states that, under coercive circumstances and threat to the life and property of the persons concerned, it agreed to pay Rs. .75 1 crores for return of such credentials, materials and documents. Despite receipt of the said amount, the Applicant allegedly failed to return them and demanded a further amount of Rs.S lakhs. An FIR No.19712024 dated 25.09.2024 was accordingly lodged at Lahunipada Police Station under Sections 408, 448, 468 and 506 IPC. The investigation was subsequently transferred by the Hon'b1e High Court of Odisha vide order daled 24.03.2026 in CRLMP No.244 12026 to the EOW, pursuant to which CB CID EOW P.S. Case No.7/2026 was registered. 6.18The Respondent has further stated that the same transactions and alleged claim forming the subject matter of the Section 9 proceedings are also under investigation before the EOW.

It has referred to the interim protection obtained by Mr. Pradeep Kumar Sahoo vide order dated 29,O4.2026 in ABLAPL No.3676 of 2026 and has alleged suppression of the transfer of investigation while obtaining such protection. 6.19The Respondent also relied upon the aileged possession of the mining 1og book by Mr. Pradeep Kumar Sahoo as evidence of his involvement in and control over the day-to-day affairs of the CD. It refers to WhatsApp communications dated O8.O5.2024 and 09 .O5.2024, wherein Mr. Sahoo allegedly shared a snapshot from the mining log book with Mr. Kumar Abhijeet Sahoo, Director of the CD. The Respondent submits that such possession, along with access to the official sea1, stamp and documents of the CD, enabled Mr. Sahoo to a1leged1y raise the disputed purchase order and generate inflatecl invoices. gl =? PaLgc 26 of 55 "il,",iHTi?:ii#;1 6.2OThe Respondent has further disputed the quality of the goods supplied under the Purchase Order dated 16.04.2021. It states that the supplied iron ore fines contained approximately 54% Fe, as against the agreed/ represented quality of +69o7o Fe, and that the silica and alumina content also exceeded the applicable limits.

By letter dated 17.06.2024, the Respondent al1eged1y called upon the Applicant to replace the 1ow-grade material with material conforming to the specified +6ook Fe quality. 6,2lThe Respondent reiterated that the claim of Rs.2,85,12,301/- is not supported by consistent documentary evidence and highlights that the claim had changed from Rs.4,50,60,a711- in the demand notice dated 07.O3.2024 to Rs.2,85, 12,301/- in the amended Section 9 petition. 6.22The Respondent admits that purchase orders and invoices were exchanged between the parties during 2019-2021, but specifically denies that the Purchase Order dated 16.04 .2021 bearing No. NMPPL/ SM 10512021-22 was a genuine arm's-length transaction. It reiterates that the purchase order was allegedly raised without authority by Mr. Pradeep Kumar Sahoo in abuse of his fiduciary position. The Respondent also refers to its notice dated I LO6,2O21, wherein it had allegedly informed the Applicant that the Purchase Order dated 16.04.2021 had been forged, altered without authority, and bore a signature and seal which did not match those of the authorised signatory of the CD.

6.23The Respondent reiterates that the invoice figures relied upon by the Applicant are inconsistent with its own GST Returns and therefore cannot be treated as reliable proof of the operational debt. It further disputes the Applicant's interpretation of the reply dated 18.03.2024 and maintains that the amount of Rs.1.3O crores referred to therein was a mutually agreed amount which was subsequently paid on 12.O4.2024. q ---7 \=4 P.rge 27 of 55 "fli*,1":Tli*i;3;l 6.24The Respondent submitted that the Applicant's contention that no pre-existing dispute survived after the letter dated 18.03.2024 and the subsequent payment is untenable. According to the Respondent, the notice of dispute dated LO6.2O24 raised 1 substantive disputes concerning the alleged unauthorised alteration and forgery of the Purchase Order dated 16.04.2021, including the signature, seal and stamp of the CD. The Respondent contends that the Applicant failed to rebut the said notice. 5.25The Respondent further submitted that the Applicant's own Written Note indicates that there was no dishonour of the cheque bearing No.000000147262 dated 24.O1.2024, despite the allegation in Part IV, Point No.1 of the Section 9 petition that the cheque had been dishonoured for insufficiency of funds.

The Respondent therefore disputes the Applicant's allegation concerning cheque dishonour. 6.26The Respondent reiterated that the Applicant's denial of Mr. Pradeep Kumar Sahoo's role as Manager/Key Managerial Personnel of the CD is unsupported by evidence. It relies upon his alleged possession of the mining log book and his access to the CD's official seal, stamp and documents to substantiate his involvement in the affairs of the CD. 6,27With respect to the criminal proceedings, the Respondent submits that the proceedings arising out of FIR No.l97 12024 remain pending and that the investigation has been transferred to the EOW. The Respondent contends that the transfer of investigation by the Hon'b1e High Court and registration of EOW P.S. Case No.7 12026 demonstrate that the allegations are not illusory or concocted but constitute a real and substantial dispute requiring investigation. 6.2SThe Respondent again relied upon the WhatsApp communication dated 05.06.2024, submitting that the Applicant had

Sd "ili},l,":Tl?'.!"i;t,l-acknowledged receipt of Rs.1.75 crores out of the agreed amount of Rs.1.80 crores, leaving only Rs.5 lakhs according to the said communication. The Respondent maintains that the payment of Rs. 1.75 crores was made under coercive circumstances and that, despite receiving the amount, the Applicant allegedly failed to return the sensitive documents and credentials of the CD and sought a further Rs.5 lakhs. 6,29Tine Respondent submits that the Applicant's reliance upon GST Returns and Form L as conclusive proof of debt is misconceived. It states that it had addressed emails dated 12.05.2026 to the Deputy Director of Mines, Koira Circle, seeking clarification regarding the alleged unauthorised use of the CD's Form L placed on record by the Applicant. The Respondent also maintains that a dispute regarding the purchase order and a separate dispute regarding the invoice amounts can coexist, particularly when the invoice figures themselves allegedly differ from the GST Returns filed by the Applicant. 6.3OThe Respondent maintains that there is no admitted debt due to the Applicant; that the figures and amounts claimed by the Applicant are inconsistent, unreliable and manufactured; and that a genuine dispute exists concerning the genuineness and quantum of the invoices, the alleged unauthorised alteration of the Purchase Order, and the alleged misuse of the position held by Mr. Pradeep Kumar Sahoo in the CD.

6.3 LThe Respondent further contends that the Section 9 petition. was filed after suppression of material facts, particularly the payment of Rs.1,30,00,000/- on 12,O4,2024, and that the mutually agreed amount between the parties was Rs.1.B0 crores, which, according to the Respondent, stood paid and discharged. It consequently characterises the Section 9 proceedings as an abuse of the insolvency process and seeks dismissal under Section 65 of the IBC. -- 3d 3J "il,",",ii":Tl?:1iffil 6.32The Respondent lastly submitted that, aL the stage of consideration of a Section 9 application, the Tribunal is required to ascertain whether there exists a plausible contention requiring further investigation and whether the dispute is genuine rather than spurious, hypothetical or illusory. It is therefore contended that the cumulative circumstances relied upon by the Respondent-inctuding the disputed purchase orders, inconsistent invoice figures, disputed dates and amounts of alleged payments, the notice of dispute, the alleged suppression oI payments, the WhatsApp communications, and the pending criminal investigation and demonstrate the existence of a genuine pre-existing dispute.

7. In its written submissions, the Applicant has reiterated the following pleadings of the petition. 7.t The Applicant has submitted that its Written Note dated 27.O4.2026 may be treated as part and parcel of the present Written Note. It is contended that the Respondent's allegation that the Applicant's claim is undefined and self-contradictory is false. The Applicant submits that the Section B demand notice dated 07 108.O3.2024, served through e-mail and Speed Post, clearly raised a demand of Rs.4,50,60,8711-, According to the Applicant, the CD received the said notice on 09.O3.2O24 and, in its reply dated 18.03.2024, admitted the debt. Thereafter, the CD paid a sum of Rs. 1,30,OO,0O0 / - on 12.04 .2024 and also sold goods to the Applicant worth Rs.35,48,570/-, which amoLlnt was adjusted towards the outstanding debt. The Applicant submits that, after such adjustment, a sum ol Rs.2,85, 12,301/- remained unpaid, in respect of which the present Section 9 application was filed. 7 .2 The Applicant submitted that the Respondent thereafter raised objections by issuing a letter dated 1 I .06.2024, alleging facts which, according to the Applicant, are false and time- /'1 i :rd 7 sd Page 30 o1 55

NCLT, Cuttack Bench CP(IB) No. 4LlCBl2O24 barred. It is contended that the amount of Rs.2,85,12,301/-claimed by the Applicant is consistent throughout its pleadings, including the original and amended Sec:ion 9 applications, and therefore the Respondent's contention that the amount claimed is inconsistent or undefined is incorrect. 7.3 With regard to the date of default, the Applicant submitted that the Respondent's contention that the same is undefined or inconsistent is mlsconceived. It is stated that in the original application the date of default was mentione d as 13 ,O2.2024, which was subsequently amended to 09.O3.2024, i.e., ttre date on which the Section 8 demand notice was received by the CD, with the leave of this Acljudicating Authority. The Applicant has relied upon the observations and principles laid down by the Hon'ble NCLAT in Compang Appeal (AT) (Ins) No, 246 of 2025, State Bank of Indla a. Rakesh Hariram Agarwal & Anr. 7.4 The Applicant lurther submitted that, in any event, the CD made part-payment of Rs.1,30,00,000/- on 12.O4.2024, which, according to the Applicant, extended the limitation period for a further period of three years. It is therefore contended that even if the date of default is considered to be the date of the relevant invoice or any date other than O9,O3.2O24, the claim would still fall within the period of limitation and the part-payment would not extinguish the liabllity of the CD. 7.5 The Applicant has denied the Respondent's contention that a settlement process was underway prior to filing of the present application and that only Rs.5,00,000/- remained payable. It is submitted that the WhatsApp communications reliec upon by the Respondent do not establish any such settlement or extinguishment of the Applicant's claim. gA /1 \ =C\ z-,-,------

NCLT, Cuttack Bench CP(IB) No. 4LlCBl2024 7.6 The Applicant has also denied the Respondent's allegation that there is a mismatch between the amounts reflected in the invoices and the figures disclosed in the GST Returns. It is submitted that the invoice numbers and dates are identical, and that the dilference in the figures is attributable to exclusion of the TCS amount at 17o, which, according to the Applicant, is not required to be reflected in the GST Returns. The Applicant therefore contends that the Respondent is attempting to mislead this Adjudicating Authority by relying upon the alleged difference in figures without considering the treatment of TCS. The Applicant has submitted that it has placed on record all just possible documents and information required for and proper adjudication of the present proceedings. It is further contended that the criminal proceedings initiated by the Respondent against Mr. Pradeep Sahoo, who represents the Applicant/ Operational Creditor firm, are valueless and have been initiated merely with an intention to create hindrances in the present proceedings. 7.4 The Applicant has lurther submitted that the Respondent has suppressed the fact that the Investigating Officer in the criminal case had submitted a Final Form stating "evidence insufficient to prove forgery" on two occasions, once before the criminal court in the GR case and again before the Hon'ble High Court. It is contended that, notwithstanding the same, the Hon'ble High Court, at the request of the Respondent, transferred the investigation to the EOW vide order dated 24.O3.2026. 7.9 It is further submitted that, despite the transfer of the case to the trOW, the trOW has, till date, not summoned Mr. Pradeep Sahoo, who represents the Applicant/ Operational Creditor firm. The Applicant submits that this is despite the EoW 3d -rA <-,/ v \ _----2 Pagc 32 ol 55

NCLT, Cuttack Bench oP(IB) No. 4LlcBl2024 having collected all transaction-related details lor the period 2019 to 2021 from the office of the Deputy Director of Mines, Koira, immediately after the transfer of the investigation in Aprrl 2026. 7.lO The Applicant further contended that the Respondent has suppressed the fact that the EOW has been reluctant to issue summons to Mr. Pradeep Sahoo as, according to the Applicant, no forgery has been found in the documentary evidence despite scrutiny of the documents collected from the office of the Deputy Director of Mines, Koira. 7.11 The Applicant has also submitted that the Respondent has suppressed the fact that the interim protection obtained by Mr. Pradeep Sahoo vide order dated 29.O4.2026 was granted only for a period of three weeks, and that no further extension of such protection was obtained thereafter, as indicated in the said order. 7,12 The Applicant submitted that all the pleas now raised by the Respondent are subsequent to its admission of the debt in its reply to the Section 8 demand notice dated 18.03.2024 and the part-payment of Rs.1,30,00,000/- on 72.O4.2024. 8. In its written submissions, the Respondent has reiterated the pleadings of the petition averring that: 8.L The Respondent submits that the present application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (" the Code") is not maintainable as the alleged operational debt is neither crystallised nor free from dispute. It is contended that the Applicant's own records disclose varying amounts of alleged outstancling dues, namely Rs.4,50,60,871/ -, Rs.2,85,12,301/-, Rs.2,75,12,3O11- and Rs.5,00,000/-, thereby rendering the claim undefined, self-contradictory and unascertained. Reliance is placed upon I(. Srlniuas Krishna u. PVM Innuensgs (P) Ltd., (2O2O) 72 Comp Cas-OL 41. )n 5d, 3d

NCLT, Cuttack Bench CP(IB) No. 4LlCBl2o24 4.2 It ls submitted that the original Sectlon 9 Petition claimed an outstanding operational debt of Rs.4,50,60,871/-, which was also the amount demanded under the Section B notice dated 07.O3.2024. However, after amendment, the Applicant itself disclosed credits of Rs. 1,30,00,000/- paid on 12.04,2024, Rs.35,48,570/- towards goods returned, and Rs. 10,00,000/-paid on 13.O2.2024, aggregating to Rs.1,75,48,570/-. According to the Respondent, deduction of the said amount from Rs.4,50,6A,871. I-leaves only Rs.2,75,12,301/ -, whereas the Applicant has claimed Rs.2,85,12,301/-, resulting in a discrepancy of Rs. 0,00,000/-. 1 8.3 The Respondent further submitted that the payment of Rs. 1 ,75,48,570/ - is corroborated by the Applicant's own records, inciuding the amount of Rs. 1,65,48,570/ - reflected in its amendment application and the separate payment of Rs. 10,00,000/- dated 13,O2,2024 admitted by the Applicant. It is contended that the said amount corresponds with the WhatsApp communication dated 05 .06.2024, wherein the Applicant acknowiedged receipt of Rs. 1.75 crore against an agreed amount of Rs. 1.80 crore, leaving only Rs.5,00,000/-payable. The Respondent therefore contends that the Applicant has inflated its claim by Rs.10,00,000/- and has taken contradictory stands on its own records. 4.4 The Respondent has also pointed out that the Section 8 notice itself contains an internal inconsistency regarding the last payment. While the notice mentions 31.05.2021 as the last payment, its tabular statement records 12.O9.2021 as the last payment, for an amount of Rs.4,00 ,OOO I -, It is therefore contended that the Applicant has failed to consistently establish the actual date of default. 8.5 It is further submitted that the Applicant's primary documents are themselves inconsistent, as the three invoices relied upon g gd d

NCLT, Cuttack Bench CP(IB) No. 4LlcBl2O24 in its Written Note do not tally with the GST Returns of the CD filed by the Applicant along with its Rejoinder. According to the Respondent, such inconsistencies in the invoices and GST records further demonstrate that the alleged debt is not a determinate, liquidated or ascertained operational debt. 8.6 The Respondent contends that a "debt" under Section 3(I1) and a "default" under Section 3(12) of the Code presuppose a determinate and ascertained sum which has become due and remains unpaid. Since the amount claimed by the Applicant varies across the Section 8 notice, original Section 9 Petition, amended Section 9 Petition and subsequent Written Note, and slnce the invoices do not reconcile with the GST records, the Adjudicating Authority cannot undertake an accounting exercise in summary proceedings under Section 9. Reliance is placed upon Mobllox Innouations (P) Ltd. rt. Klrusa Software n Ltd., (2018) I SCC 353, and Innoaentiue Industries Ltd. u. ICICI Bank, (2018) I SCC 4O7. 8.7 The Respondent submitted that the original Section B Demand Notice mentions the date of delault as 31 .05.202 i, the original Section 9 Petition mentions 13,O2.2024, whereas the amended Section 9 Petition and Written Note dated 27 .04.2026 mention 09 .O3.2024, i.e. the date of receipt of the Section 8 notice. The Respondent contends that the date of default goes to the root of the matter and cannot be altered from stage to stage. Reliance is placed .upon Neeral Jaln u. Cloudutalker Streaming Technologles Put, Ltd., (2O2O) 10 Com4t Cas-OL 266. 8.8 The Respondent further submitted that the Applicant's present plea that 09 .O3.2024, being the date of receipt of the Section 8 notice, is the date of default is legally and factually untenable. It is contended that the Section B notice dated 07 .O3.2O24 was issued before the alleged default dated a t ,--=- 3d :--'dt

NCLT, Cuttack Bench CP(IB) No. 4LlCBl2O24 09.O3.2024 and, therefore, the demand notice would precede the very occurrence of default upon which it is founded. According to the Respondent, Section 8(1) contemplates issuance of a demand notice only after occurrence of default. Reliance is placed upon Mobllox Innouations (P) Ltd, a. Kirusa Sofhtare (P) Ltd., (2018) I SCC 353. 8.9 The Respondent also relied upon Innooentlue Industrles Ltd.. v. ICICI Bank, (2O18) 1 SCC 4O7, particularly paragraphs 27 and 28, to contend that the insolvency resolution process commences when a default takes place, in the sense that a debt becomes due and is not paid, and that a debt may not be due where it is not payable in law or in fact. It is therefore contended that a demand notice cannot legally precede the occurrence of the default on which the demand is based. 8. 10 It is further submitted that if the date of default pleaded in the original petition, i.e. 31.O5.2O21, is accepted, the Section 9 application filed on 27.o6.2024 is ex facie barred by limitation, the period of three years prescribed under Article 137 of the Limitation Act, 1963 having expired. Reliance is placed upon B,K, Educatlonql Seraices (P) Ltd, o, Pqrag Gupta & Assoclates, (2019) II SCC 633, wherein Article 137 of the Limitation Act was held applicable to applications under the Code. According to the Respondent, the subsequent shifting of the date of default to O9.O3.2O24 is merely an attempt to overcome the limitation bar and is impermissible. 8.l L The Respondent submitted that the Section 8 notice dated 07.O3.2O24 demanded Rs.4,50,6O,871l - on the basis of the alleged default dated 31.05.2021. Subsequently, according to the Applicant itself, payments were received which reduced the alleged outstanding amount to Rs.2,85,12 ,3Ol I -, and the Applicant thereafter prosecuted the Section 9 application oh a different date of default. It is contended that a materially ga 3d a-

NCLT, Cuttack Bench CP(IB) No. 4rlcBl2o24 altered amount coupled with a new date of default constitutes a fresh cause of action for which a fresh Section 8 notice was mandatory. 8.12 The Respondent contended that the Applicant was required to issue a fresh Section B notice in respect of the reduced amount so as to afford the CD the statutory opportunity of responding to the demand' Reliance is placed upon Entertalnment Netu.rcrk India Ltd. a. Praise Communlcatlons (P) Ltd" IB/66O/ND/2O2O. It is submitted that the amount demanded under Section B, i.e. Rs.4,5O ,60,87 | I -' does not correspond with the amount subsequently claimed under Section 9' i'e' Rs.2,85,12,301/ -. 8.I'3TheRespondentfurthersubmittedthattheallegedoperational debt stands discharged by an accord and satisfaction/ settlement arrived at between the parties, pursuant to which, against the agreed amount of Rs' 1'80 crores, the Applicant received Rs.1.75 crores) leaving only Rs.5,0O,O0O/- payable. Reliance is placed upon the WhatsApp communication dated 05.06.2024 and M/s' Sllver Collections Private Limited v. M/s. Paragon Knits Ltd', CP IB No. 763lNDl2O24. g.14 It was submitted that under section 63 0f the Indian contract Act, 1872, where a promisee accepts a lesser sum in satislaction of the whole, the entire debt stands discharged, as reflected in Illustration (b) to the provision' The Respondent contends that the WhatsApp communication evidencing the settlement is admissible electronic evidence under Section 63 of the Bharatiya Sakshya Adhiniyam, 2023, corresponding to Section 65-8 of the Indian Evidence Act, 1872, and that the requisite certificate has been placed on record' Reliance is placed upon Straw Commaditles LLP u' Anram Agro Tradlng (P) Ltd.' 2024 SCC OnLine NCLAT 2172' qA gA ors'

NCLT, Cuttack Bench CP(IB) No. 4LlcBl2024 8.15 The Respondent submitted that, upon the alleged settlement' only Rs.5,00,000/- remained payable, which is below the statutory threshold of Rs. i crore under Section 4 of the Code' It is therefore contended that the Section 9 application is not maintainable on this ground alone' The Respondent further disputes the Applicant's reliance upon its reply dated :'a.O3.2024 as an admission of the debt of Rs'4,50,60,871/-, contending that the said reply merely records a negotiated figure and was made in the context of securing the return of the CD's statutory records by the Applicant's partner' 8.16 It was further submitted that only after the Respondent produced proof of the bank transfers, the Applicant was compelled, nearly one year thereafter, to file i'A' No' 196/2025 seeking amendment of the Section 9 Petition' The Respondent contends that even thereafter the Applicant continued to describe the settled amount as a mere "part payment'', instead ol disclosing the alleged settlement. Reliance is placed upon Prestlge Lights Ltd' v. SBI, (2OO7) 8 SCC 449, to contend that a litigant invoking the jurisdiction of the Court/Tribunal must disclose all material facts and that suppression of material facts may disentitle such party from relief' 8,17 The Respondent submitted that the CD is a solvent company having no loans or outstanding dues, and that the present proceedings have effectively been reduced to coercive recovery proceedings by the Applicant. It is contended that the Code is not intended to be used as a substitute for debt recovery, execution of money claims or as a coercive mechanism against a solvent company. 8.18 In support of the aforesaid contention, the Respondent relied upon Aniani Technoplast Ltd. rt. Shubh Gautam, 2026 INSC 47O, wherein, according to the Respondent, on materially similar facts involving uncredited prior payments /-\ JC"^ page 38 ol55 Z

NCLT, Cuttack Bench CP(IB) No' 4rlcBl2024 and inconsistent claims macle by the crcditor' the Hon'b1e Supre mc Court held that lhc de bt was seriously disputed and thatitrvocartionoftheCodeamountedtoanabuseolprocess. ANALYSIS AND FINDINGS 9. Wc have heard the Ld. Counsel appearcd for the Applicant and the Rcspondcnt and perused the pleadings, documents' writt.en submissiot-ts and the matcrial placed on record Upon consideratron of the subn'rissions, thc following issucs arise for our consideration: Issue No. I: Whether the Applicant has established the existence of an operational clebt a.ncl clefault tuithin the neaning of Sectiotts 5(21) ancl 3(12) of the Insoluencg ctnd Ba nkruptcg Code' 2O 16' and u.thether the amount of Rs.2,85, 12,301/ - clairned by the Applicant rernains due ancl pag able after accounting for the payments and adjustrnenls mode by the Corporate Debtor? /ssueNo.II:WhetherthepresentapplicationfiledunderSection9 oftheCodeistuithinlimitationaniltl-lhetherthedateofdefault pleaclecl by the Applicant is te'gallg sustainable in uiew of the pagments marle bg the Corporate Debtor and the acknouledgment in its replg dated 18.03.2024? c:c.tntcLined fssue No. III: Whether there existed ang genuine pre-existing clispute betueen the parties pnor to the issuance-ctnd receipt of the Demancl N otice uncler Section B of the Code, so as to ottract the bar contained in Section 9(5)(ii)(d) of the Code? IssueNo.IV:Whelherthesubsequentallegationsrelatingtothe alleged settlement, forgerA, qucttitg of goods, suppression of nlateial ancl the cnmital proceedings initiated after the Jacts Sectiort 8 Dem anil N otice can clefeat the present ctpplication under Seclion 9 of t.he Code? ISSUE NO. I: Whether the Applicant has established the 1O. existence of an operational debt and default and whether Rs.2,85,12,3O1/ - remains due and payable? gd --"1? 3J Pagc 39 of 55

NCLT, Cuttack Bench CP(IB) No. 4LlcBl2O24 10,1 The Applicant's case is that it supplied Iron Ore to the Corporate Debtor pursuant to various Purchase Orders issued during the period from 10'05'20 19 to 76'04'2021 and raised corresponding Tax Invoices for the supplies made during the period from 18.05.2019 to 31 05 202 1' The Applicant has stated that the supplies were duly made and supported by the corresponding transportation particulars, tmck details and permit numbers. It is further stated that the Corporate Debtor made payments from time to time on a running account basis' but failed to clear the outstanding dues' 1O.2 The Applicant initially raised a demand of Rs'4,50,60,871/-through the Demand Notice dated 07 'O3 '2024 ' The said Demand Notice was served upon the Corporate Debtor through email on 07 .O9.2O24 and through Speed Post on. The Corporate Debtor received the Demand O5.O3.2O24 Notice on Og 'O3.2O24 and responded thereto vide its letter rtated 18.03.2024. lo.3ItisnotindisputethattheCorporateDebtorthereaftermade payment of Rs.1,30,00,000/- on 12'O4'2024' lt is further the case of the Applicant that an amount of Rs'35,48,570/ -relating to material purchased by the Applicant from the Corporate Debtor was adjusted against the outstanding dues' After giving credit for the aforesaid payment and adjustment' the Applicant has claimed an outstanding operational debt of Rs.2,85,I2,30i /-. 1O,4 The Respondent has attempted to dispute the quantum by contending that the Applicant's claim was originally for Rs.4,50,60,87 | I - and that, after accounting for the amounts received, the balance should be Rs'2,75,12,301/- and not Rs.2,85,12,301/-. It has also relied upon an alleged settlement under which, according to the Respondent, only Rs.5,OO,oOO/- remained payable. The Respondent has further gdt'-----'- gA --> Page40or55

NCLT, Cuttack Bench CP(IB) No. 4llCBl2024 questioned certain invoice figures with reference to the GST records. 1O.5 However, the mere fact that certain payments were made subsequent to issuance of the Demand Notice does not extinguish the underlying operational debt' On the contrary' the subsequent payment of Rs'1,30,00,000/- itself demonstratesthattherewasanexistingfinancialliability between the parties which was being discharged, at least in part, bY the CorPorate Debtor. 1O.6 The Corporate Debtor has not denied the underlying commercial relationship between the parties or the fact that transactions for supply of Iron Ore took place The Applicant has placed on record Purchase Orders, Tax Invoices, transportation particulars and statutory records in support of the supplies. The Applicant has further relied upon the GST Returns ol the Corporate Debtor to demonstrate that the transactions were reflected in the statutory records and that the Corporate Debtor availed Input Tax Credit in respect of the supplies. 1O,7 The Respondent's subsequent allegation that the Purchase Orders were forged or that the invoices were inflated has to be considered in the context of the admitted chronoloSz' The alleged notice concerning forgery and quality was issued only on 11.016.2024, i.e. after issuance and receipt of the Section 8 Demand Notice and after the Corporate Debtor had already ot responded to the Demand Notice 18'O3'2024' 1O.8 The Applicant has also explained the alleged discrepancy in the Purchase Orders and has relied upon the corresponding invoices and GST records to establish that the transactions were in fact acted upon by the parties' According to the Applicant, even in respect of the Purchase Orders subsequently questioned by the Respondent, the C"l ..-:? C-l

-

NCLT, Cuttack Bench CP(IB) No. 4LlcBl2o24 in the corresponding invoices were reflected Corporate Debtor's GST Returns and ITC was availed' 1O,9 At this stage, what is relevant is whether there was an operational debt which had become due and remained unpaid' The material placed on record establishes that goods were supplied by the Applicant, invoices were raised' payments were made by the Corporate Debtor from time to time' and a substantial amount continued to remain unpaid' The subsequent payments and adjustments relied upon by the Applicant have been duly accounted for in arriving at the amount PresentlY claimed. 10.loThe Respondent's contention regarding the exact reconciliation of the amount does not, in the facts of the present case, negate the existence of the underlying operational debt. The Respondent itself acknowledges the payment of Rs.1,3O,0O,OOO/- and does not dispute the existence of the transactions as such' Its contention is essentially with regard to the ultimate amount payable and the effect of subsequent payments and alleged settlement' lO.11We therefore find that the Applicant has established the existence of an operational debt arising out of the supply ol Iron Ore and that the Corporate Debtor failed to discharge the entire liability. The amount of Rs'2,85,12,3O1I - claimed by the Applicant is the amount stated to remain outstanding after giving credit for the payments and adjustments specifically pleaded bY the APPlicant. 11'IssUENo.II:Whethertheapplicationiswithinlimitationand whether the date of default is legally sustainable? 11,1 The Respondent has raised a preliminary objection regarding the date of default. It is contended that the Section 8 Demand Notice dated 07 'O3.2024 mentioned 31 05'2021 as the date of default,whereastheoriginalsectiongapplicationmentioned -=-2 q

NCLT' Cuttack Bench CP(IB) No. 4LlcBl2O24 13.02.2024 and the amended application subsequently mentioned 0g.03.2024. The Respondent has therefore alleged that the Applicant has taken inconsistent positions with regard to the date of default' I L,2 The Applicant has explained that the original application mentioned 13.02.2024 as the date of default and that' with the leave of this Adjudicating Authority, the date was subsequently amended to 09 '2024, being the date on 'O3 which the Section 8 Demand Notice was received by the Corporate Debtor. The Applicant has relied upon the decision of the Hon'ble NCLAT in State Bank of India u' Rakesh Hariram AgaruLal & Anr., Company Appeal (AT) (Ins') No'246 of 2025' 11.3 In considering the objection relating to limitation, the material fact which cannot be overlooked is that the Corporate Debtor made a payment of Rs.1,30,OO,0OO/- on 12'04'2024 after receipt of the Demand Notlce and, even according to the the parties were engaged in negotiations Responclent, regarding payment and settlement of the dues' The Respondent's own case thus proceeds on the footing that there was a subsisting monetary liability between the parties' 1.4 The Applicant has further relied upon the payment of 1 Rs. 10,O0,000/- dated 13.O2.2024 and has contended that the payment was made towards the outstanding dues' The Respondent disputes the legal character and effect of the said payment.

However, such a dispute does not erase the fact that payments were being made towards the outstanding transactions. 11.5 The question ol limitation has to be considered with reference to the admitted chronology and the payments made towards the outstanding liability. The present application was filed on 27,Ci6.2024, i.e. after issuance of the Demand Notice and within the period pleaded by the Applicant' The subsequent q q --7 "il,","ft.:Tli:lz3;i amendment of the date of default was also carried out with the leave of this Adjudicating Authority' 11,6 The Respondent's contention that the date of receipt of the DemandNoticecannotconstitutethedateofdefaultmayhave relevance in determining the precise date on which the debt became due' However, the same does not render the entire application non-maintainable when the record demonstrates that the liability had already arisen, the Demand Notice was issued in respect thereof, the Corporate Debtor responded to the Demand Notice, and substantial payment was subsequentlY made. ll.TltistobenotedthattheRespondentCannotsimultaneously contend that there was no subsisting liability and rely upon subsequent payments and negotiations concerning the same liability.

The payment of Rs' 1,30,00,000/ - after receipt of the Demand Notice is a material circumstance demonstrating that the debt was not extinguished and that the liability remained under consideration between the parties' 11.8 We therefore find that the objection relating to limitation does not render the present application non-maintainable' The Applicant has established a subsisting operational debt and default, ancl the application has been instituted within the legally permissible Period. |2.IssUENo.III:Whetherthereexistedanygenuinepre.existlng dispute prior to the Section 8 Demand Notice? 12.1 Section 9 of the Code contemplates that an application by an Operational Creditor cannot be admitted if, before receipt of the demand notice, there existed a dispute between the parties regarding the debt. The expression "dispute" has to be understood in the context of Section 5(6) of the Code and the principles governing the consideration of an application under Section 9. -r7 S4

NCLT, Cuttack Bench CP(IB) No. 4LlcBl2O24 L2,2 Tne Respondent has placed substantial reliance upon the alleged forgery of the Purchase Orders, alleged inferior quality ol Iron Ore, alleged inflated invoices and the subsequent criminal proceedings. However, the chronologr of events assumes sign ificance. 12.3 The Section 8 Demand Notice was issued on 07 'O3'2O24 and was received by the Corporate Debtor on 09'03'2024 The Corporate Debtor replied to the Demand Notice on 18.O3.2024, The Respondent's specific notice alleging forgery and raising the alleged quality dispute is dated 1l'06'2024' The FIR was registere d on 25'09'2024' Thus, the alleged dispute concerning forgery and quality was raised after receipt of the Section B Demand Notice, whereas the criminal proceedings were initiated much later' 12.4 Tine distinction between a dispute existing prior to the Demand Notice and a dispute raised for the first time after receipt of the Demand Notice is material' A dispute which comes into existence only after the Section 8 notice cannot retrospectively become a "pre-existing dispute" for the purposes of Section 9 of the Code' 12.5 In the present case, the Respondent has not produced any contemporaneous document, prior correspondence, notice' complaint, communication or other material demonstrating that, before 07 .O3.2024 or before receipt of the Demand Notice on 09.03.2024, it had disputed either the quality of the goods, the authenticity of the Purchase Orders, the invoices raised by the Applicant or the amount claimed by the Applicant' 12,6 on the contrary, the chronologr shows that the Respondent responded to the Demand Notice only on 18 03'2024 and thereafter macle a substantial payment of Rs' 1 ,30,00,000/ - on 12.O4.2024. The Respondent's subsequent letter dated --z q Pagc 45 of 55

NCLT' Cuttack Bench CP(IB) No. 4rlcBl2o24 I | .06.2024 raising allegations of forgery and quality was therefore subsequent to the Demand Notice' in L2,7 TLie Respondent has relied upon the decision Mobilox Innouations (P) Ltd. u. Kirusa Software (P) Ltd', (2018) 1 SCC 353, to contend that a plausible pre-existing dispute constitutes a bar to inltiation of CIRP' There can be no quarrel with the proposition laid down therein' However' the foundational requirement for applying that principle is that the dispute must have existed prior to the receipt of the Section 8 Demand Notice. 12.8 In the present case, that foundational fact is absent' There was no dispute raised by the Corporate Debtor prior to the Section 8 Demand Notice. The allegations of forgery, quality deficiency and inflated invoices were raised subsequently' 12.9 Therefore, the principle in Mobilox relating to rejection of a Section 9 application where a genuine pre-existing dispute exists does not come to the assistance of the Respondent in the facts of the present case. The judgment cannot be invoked to convert a dispute raised for the first time after receipt of the Section B notice into a pre-existing dispute' 12.1OThe subsequent FIR dated 25.09.2024 stands on an even weaker footing for this purpose. The Section 9 application itself was filed on 27.06.2024, whereas the FIR came to be lodged only on25.O9.2024. A proceeding instituted after filing of the Section 9 application cannot constitute a dispute which was existing prior to the Section 8 Demand Notice' 12.1lThe subsequent transfer of the criminal investigation to the EOW pursuant to the order dated 24 'O3 '2026 also cannot alter the position. The transfer of an investigation in a subsequent criminal proceeding does not retrospectively create a dispute which was non-existent prior to the Section B Demand Notice.

I']argc 46 of 55

NCLT, Cuttack Bench 4llcBl2o24 CP(IB) No. t2J.2The Respondent's contention that the criminal case concerns the same Purchase Orclers, invoices and transactions may be relevant to the ultimate adjudication of the allegations made by it in the appropriate criminal or clvil proceedings' However' it cannot satisfy the statutory requirement of a pre-existing dispute for the purpose of Section 9 of the Code' 12.13We further find significance in the reply dated 18 'O3 '2024 issued by the Corporate Debtor in response to the Section 8 Demand Notice. The Applicant relies upon the said reply as an acknowledgment of the liability The Respondent seeks to explain the said reply by stating that only Rs 1'30 crore was mutually agreed between the parties' L2.L4The subsequent payment of Rs.1'30 crore on 12 'O4 '2024 further assumes significance. A payment made after receipt of the Demand Notice towards the liability arising from the transactions is inconsistent with the Respondent's attempt to contend that the entire claim was already the subject of a prior dispute before the Demand Notice' 13, ISSUE NO. IV: Whether the subsequent allegations of settlement, forgery, quality deficiency, suppresslon and criminal proceedings can defeat the present Sectlon 9 application? 13.1 The Respondent has contended that the parties subsequently arrived at a settlement under which Rs'1'75 crore was paid against an agreed amount of Rs' 1'80 crore and only - remained payabie. It has further alleged that Rs.S,OO,OOOi the Applicant suppressed the said settlement while filing the Section 9 application' The Respondent has also relied upon the WhatsApp communication dated 05'06'2024 and has sought dismissal of the application on the ground that the balance amount was below the threshold prescribed under Section 4 of the Code. q lf, ---e^g.47 of 55 \ a:=---

NCLT' Cuttack Bench CP(IB) No. 4LlCBl2O24 13.2 The Applicant, however, disputes the alleged fu1l and final SettlementandStatesthattheamountreceivedconstituted part-payment towards the larger operational debt' The Applicant has specifically pleaded that the amount of Rs. 1,30,00,000/ - was received after issuance of the Section 8 Demand Notice and that Rs.35,48,57O l-was adjusted towards the outstanding amount l3.3WefindthattheallegedSettlementdated05.06.2024itselfis subsequent to the Section 8 Demand Notice dated 07 'O3 '2024 ' Therefore, even assuming that there was a subsequent settlement or negotiation between the parties, the same cannot constitute a pre-existing dispute within the meaning of Section 9 ol the Code. 13,4 The Respondent's contention that the subsequent settlement completely discharged the operational debt is a matter which requires consideration on the basis of the documents relied upon by both parties. However, the subsequent negotiations cannot retrospectively invalidate a Section 8 Demand Notice which was issued against an existing operational debt and in respect of which no prior dispute had been raised' 13.5 Further, the Corporate Debtor's own case acknowledges that substantial amounts were paid to the Applicant after the Demand Notice. The payment of Rs 1 ,30,00,000/ - on 12.04.2024 is a material circumstance which demonstrates that the liability was being dealt with between the parties after receipt of the Demand Notice. 13.6 As regards the allegation of forgery, the Respondent has relied upon its letter dated 11.06.2024 and subsequent criminal proceedings. However, as already heid, the said allegations were ralsed subsequent to the Demand Notice' The Tribunal, while exercising jurisdiction under Section 9, is required to determine whether a pre-existing dispute existed before the q /}^ee 48 or55

NCLT, Cuttack Bench CP(IB) No. 4rlcBl2o24 Demand Notice and not to conduct an adjudication upon allegations which arose thereafter' 13.7 The Applicant has, on the other hand, placed reliance upon the actual conduct of the parties, including the supplies made' invoices raised, receipt and utilisation ol goods, GST records and ITC claimed by the Corporate Debtor' The Applicant has specifically contended that the disputed Purchase Orders were in acted upon and the transactions were reflected the statutory records of the Corporate Debtor' 13.8 The Respondent's allegation that the Applicant's partner was previously associated with the Corporate Debtor and had access to certain records, even if taken at its highest, does not by itself establish that a dispute regarding the operational debt was raised before receipt of the Section B Demand Notice' 13,9 Similarly, the subsequent FIR and the proceedings before the EOW may be pursued in accordance v/ith law' However, those proceedings cannot retrospectively transform a subsequent allegation into a pre-existing dispute under Section 9' 13.1OWe also do not find sufficient basis, in the present proceedings, to invoke Section 65 of the Code merely on the basis olthe allegations made bli the Respondent The initiation of Section 9 proceedings by itself cannot be termed fraudulent or malicious where the Appiicant has established the underlying operational transactions, issued a statutory Demand Notice, and pursued an unpaid operational debt' The parties' rival contentions regarding the subsequent settlement and the criminal allegations are matters which may be considered by the competent forum in accordance with 1aw' 13.1lThe Respondent has also relied upon the decision io Prestige I'ights Ltd. u. State Bank of India, (2OO7) 8 SCC 449' concerning suppression of material facts' However, the allegation of suppression in the present case is principally q :;,. sl

NCLT, Cuttack Bench CP(IB) No. 4tlcBl2024 founded upon the subsequent payment and alleged settlement. The Applicant has subsequently brought the payments and adjustments on record and the same have been considered for determining the amount presently claimed' The subsequent disclosure and adjudication of the payment cannot, by itself, establish that the entire Section 9 proceeding was maliciouslY instituted. 13.12The Respondent has further relied upon AnJanl Technoplast Ltd. v, Shubh Gautam to contend that the IBC cannot be used as a recovery mechanism We have considered the said submission. However, the present case is distinguishable on facts, since the Applicant has established an operational debt arising out ol actual supplies, issuance of invoices' part-payments by the Corporate Debtor and continued non-payment ol the balance amount More importantly, no pre-existing dispute has been established' 13.13The insolvency jurisdiction cannot, of course, be used as an ordinary debt recovery mechanism' However, where the statutory requirements under Section 9 are satisfied and the operational debt remains unpaid, the mere fact that the Corporate Debtor disputes the claim after receipt of the Demand Notice cannot defeat the application' 13.14We therefore find that the subsequent allegations of settlement, forgery, quality deficiency and criminal proceedings do not constitute a pre-existing dispute and do not render the present Section 9 application non- m a in tainable. 13.l5Having considered the rival pleadings and material placed on record, we lind that the Applicant has established the existence of an operational debt arising from the supply of Iron Ore to the Corporate Debtor' The Applicant has placed on record the Purchase Orders, Tax Invoices, transportation v -7 PeLgc 50 of 55

NCLT, Cuttack Bench CP(IB) No. 4LlcBl2024 particulars and other supporting documents relating to the suppiies. The Corporate Debtor made payments towards the transactions from time to time and, significantly, made a further payment of Rs. 1,30,00,000 / - after receipt of the Section B Demand Notice. The Applicant has thereafter given credit for the payments and adjustments and has claimed an outstanding amount of Rs.2,85, 1 2,30 1 / -' 13.16The Corporate Debtor has failed to establish that, prior to receipt of the Section 8 Demand Notice, it had raised any dispute regarding the authenticity of the Purchase Orders' quality of the Iron Ore, invoices or quantum of the operational debt. The specific allegations regarding forgery and quality were raised only by communication dated ll '06'2024 ' whereas the Section 8 Demand Notice had already been issued on 07,O3.2024 and received on 09'03 2024 to which CD filed its reply on 18.03'2026 in which no such issues were raised' 13.l7likewise, the FIR dated 25.09.2024 was lodged much after receipt of the Section 8 Demand Notice and even after the institution of the present Section 9 application on27 '06 '2024 ' Consequently, the said criminal proceedings cannot constitute a pre-existing dispute for the purposes of Section 9 of the Code. 13.18The principle laicl down by the Hon'b1e Supreme Court in Mobitox Innoaatlons (P) Ltd, u, Klrusa Software (P) Ltd' is attracted where a genuine dispute already exists prior to the receipt of the Demand Notice' In the present case, the foundational requirement of a pre-existing dispute has not been established by the Corporate Debtor' The subsequent raising of allegations cannot retrospectively create a dispute which did not exist when the Section 8 Demand Notice was issued. q

NCLT, Cuttack Bench CP(IB) No. 4tlcBl2O24 13.L9The reply dated 18.03.2024 to the Section B Demand Notice' read with the subsequent payment of Rs'1,30,00,000/- on 12.04.2024, also demonstrates that the liability between the parties was being acknowledged and dealt with' The Responclent's attempt to subsequently characterise the transaction as one involving forgery or quality deficiency cannot, in the absence of any contemporaneous dispute prior to the Demand Notice, defeat the statutory remedy available to the OPerational Creditor. 13,2OAs regards the alleged settlement, even if the subsequent negotiations and payments are taken into consideration, they occurred after issuance of the Section B Demand Notice' The same may have a bearing upon the ultimate reconciliation of accounts, but cannot constitute a pre-existing dispute so as to attract Section 9(5)(ii)(d) of the Code' 13.2lWe therefore hold that the Applicant has satisfied the essential requirements for initiation ol CIRP under Section 9 of the Code. The operational debt is due and payable, the Corporate Debtor has committed default, the amount in default exceeds the threshold prescribed under Section 4 of the Code, the application is complete in all material particulars, and no pre-existing dispute has been established' 14. In view of the foregoing discussion and findings, the present application, CP(IB) No. 4ltCBl2O24, filed by M/s. Soubhagya Minerals, through its Partner Mr. Pradeep Sahoo, under Section 9 of the Insolvency and Bankruptcy Code, 20 16, seeking initiation of Corporate Insolvency Resolution Process against M/s' Nilachakra Metal Processors Private Limlted, is hereby Allowed and M/s' Nilachakra Metal Processors Private Limited is Admitted into CIRP' L5.

A moratorium is declared under Section 14 of the Insolvency and Bankruptcy Code, 2016, prohibiting the following actions in terms of Section la(1) of the Code: -7 /-1 S4 P.rgc 52 o1 55 "il:,ili:Tli:lils;l l5,lTheinstitutionofsuitsorcontinuationofpendingsuitsor proceedings against the Corporate Debtor' including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; 15.2 Transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any 1egal right or beneficlal interest therein; 15.3 Any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property, including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of SecuritY Interest Act, 2OO2; 15.4 The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corPorate Debtor. 1_6,The moratorium sha11 remain in force from the date of this order till the completion of the Corporate Insolvency Resolution Process or until this Adjudicating Authority approves a resolution plan under section3l(1)ofthecodeorpassesanorderforliquidationofthe Corporate Debtor under Section 33 of the Code, whichever is earlier' 17.This Adjudicating Authority appoints Ms. Sweta Agarwala as IRP from the panel of IBBI in this case bearing Registration No' having its IBBI/IPA-OOItlP-P-O2874t2O24'2O2Sl1,44OO registered email ID as b-kC,.-Cw9!e@gmeil'8"onq and mobile number:92S336lS16asthelnterimResolutionProfessional,in terms of Section 16(a) of the Insolvency and Bankruptcy Code' 20t6.

L8,The Interim Resolution Professional so appointed sha11 make a publicannouncementoftheinitiationoftheCorporatelnsolvency Resolution Process ancl call for submission of claims in terms of Section 15 read with Section 13(1)(b) of the Code'

Ct ,-

NCLT, Cuttack Bench CP(IB) No' 4LlCBl2o24 19.The supply of essential goods or services to the corporate debtor' if continuing, sha11 not be terminated, suspended or interrupted during the moratorium period. The Corporate Debtor shall extend ful1 assistance and cooperation to the Interim Resolution Professionalindischargeofhisdutiesasandwhenhetakescharge of the assets and management of the corporate debtor" ' 20.The IRP shall perform all its functions aS Contemplated, inter a1ia, by sections 17 ,8,2O & 21 of the code' It is further made clear that all personnel connected with Corporate Debtor' its Promoter or any other person associated with the management of the Corporate DebtorareunderalegalobllgationunderSectionl9oftheCodeto extendeveryassistanceandco-operationtothelnterimResolution Professional where any personnel of the corporate Debtor' its Promoter, or any other person is required to assist or co-operate withlRP,t-rutdoesnotassistorco-operate,thelRPisatlibertyto make an appropriate application to this Adjudicating Authority with a prayer for passing an appropriate order' 2l.ThelRPshallbeunderadutytoprotectandpreservethevalueof the properly of the corporate Debtor and manage the operations of theCorporateDebtorasagoingConcernaSapartoftheobligation imposed by Section 20 of the Insolvency & Bankruptcy Code, 2016' 22,The Interim Resolution Professional / Resolution Professional shall submitperiodicprogressreportsbeforethisAdjudicatingAuthority in accordance with the provisions of the code and the regulations framed thereunder. 23. The Operational creditor shall deposit an initial amount of Rs' 2,O0,OOO/- (Rupees Two Lakhs only within 3 days (Three days) from the date of receipt of this order towards the expenses of the Corporate Insolvency Resolution Process. Proof of such deposit shall befiledbeforethisAcljudicatingAuthorityalongwiththefirst progress report. The Interim Resolution Professional shall be at q

NCLT, Cuttack Bench CP(IB) No. 4tlcBl2o24 liberty to seek further interim finance, as required, in accordance with 1aw. 24. Further, the Registry is directed to communicate a copy of this order to the financial creditor, the Corporate Debtor, the Interim Resolution professional and the concerned Registrar of Companies within seven working days and upload the same on the website of this Tribunal immediately after pronouncement. 25,The Interim Resolution Professional shall also serve a copy of this order upon statutory authorities including the Income Tax Department, GST authorities, State commercial Tax Department, Provident Fund authorities and such other authorities as may have claims against the corporate Debtor, &S well as employees or workmen associations, if any. 26.The Corporate Insolvency Resolution Process sha11 commence from he date ol this order. t 27,The Resolution Professional shall submit reports and compliances before this Adjudicating Authority strictly in accordance with the timelines prescribed under the Insolvency and Bankruptcy Code, 2016 and the regulations made thereunder. 28.Accordingly, CP (IB| No. 4LlCBl2O24 stands Allowed and Disposed of, sl BANWARI LAL MEENA CHEEKATI RADHA KRISHNA MEMBER (TECHNICAL) MEMBER (JUDICIAL}