Ramniwas B Somany vs Anushri Paper Pack Pvt Ltd & Anr

Comp. App. (AT) (Ins) No. 1370 of 2023 & I.A. No. 4881, 4882, 4883, 4884 of 2023 & 7139 of 2024

(Arising out of the Order dated 22.09.2023 passed by the National Company Law Tribunal, Ahmedabad Division Bench Court - 1 in CP(IB) 361 of 2019) IN THE MATTER OF:

Ramniwas B Somany 304 Jeevan Sapna, Patel Nagar Kandivali West, Mumbai 400067 ...Appellant

Versus 1. Anushri Paper Pack Pvt. Ltd 64, Mahagujarat Industrial Estate. Village- Moraiya, Sarkhej-Bavla Highway. Tal. Sanand, Dist. Ahmedabad - 382213. info@anushripaper.com ...Respondent No. 1

2. Indian Denim Limited Through its IRP Sh. Rahul Nareshbhai Shah 20, Sudershan Society, Part 2, Near Naranpura Bus Stop, Naranpura, Ahmadabad, Gujarat- 380014 Email Id: cirp.indiadenim@gmail.com ...Respondent No. 2

Present For Appellant: Mr. Hemant Phalpher, Advocate.

For Respondents: Mr. Harshit Khare, Mr. Prafful Saini, Mr. Ayuj Agrawal, Advocates for intervenor SBI.

Mr. Atul Sharma, Mr. Ashutosh Jain, Advocates for R2. Comp. App. (AT) (Ins.) No. 1370 of 2023

JUDGEMENT

(17.09.2025)

NARESH SALECHA, MEMBER (TECHNICAL)

1. The present appeal has been filed by the Appellant i.e. Ramniwas B

Somany the Suspended Director of the Corporate Debtor, under Section 61 of the

Insolvency and Bankruptcy Code, 2016 ('Code') against the Impugned Order

dated 22.09.2023 passed by the National Company Law Tribunal, Ahmedabad

Division Bench, Court- I ('Adjudicating Authority') in the Company Petition

(IB) No. 361 of 2019.

Anushri Paper Pack Pvt. Ltd, the Operational Creditor of the Corporate

Debtor, who initiated Section 9 application, is the Respondent No.1 herein.

Indian Denim Limited, who is the Corporate Debtor through its Interim

Resolution Professional, is the Respondent No.2 herein.

2. The Appellant submitted that on 06.05.2019, the Respondent No. 1 filed

the Company Petition against the Corporate Debtor (India Denim Limited) for

initiation of Corporate Insolvency Resolution Process ("CIRP"), alleging a total

operational debt of Rs. 8,48,127/-, comprising a principal amount of Rs.

3,56,616/- and contractual interest at 24% amounting to Rs. 4,82,511, calculated

from the end of the 30-day credit period until 31.03. 2019.

3. The Appellant refuted the claims of the Respondent No. 1 in the Subject

Company Petition which was allegedly based on a continuing default from the

end of the 30-day credit period, with the last on-account payment being a cheque Page 2 of 10 Comp. App. (AT) (Ins.) No. 1370 of 2023

of Rs. 40,000/- dated 17.05.2016 (cleared on 20.05.2016), and non-payment

following a demand notice dated 25.01.2019.

4. The Appellant contended that there was clear dispute with respect to the

supply of corrugated boxes of various fitments and sizes, supplied by Respondent

No.1. The Appellant submitted that the Adjudicating Authority failed to

appreciate that the Corporate Debtor had raised disputes with regard to the fitment

and size of the corrugated boxes and had orally requested Respondent No. 1 to

take the goods back, but Respondent No. 1 through its inaction never took the

goods back. The Appellant submitted that it is trite law that the buyer is not bound

to return the goods if he intimates the seller of his intention of return and the seller

refuses to accept such return. The Appellant contended that this constitutes a

disputed question of fact requiring detailed investigation and evidence, and that

the process under Section 9 of the Code being summary in nature was not

maintainable and further the debt is not crystallized.

5. The Appellant contended that the Adjudicating Authority has erred in

holding that based on the ledger account, the transactions between the parties is

a running account. The Appellant submitted that the Adjudicating Authority

failed to appreciate that the Subject Company Petition under Section 9 of the

Code pertained to eight separate transactions or bills, each with distinct due dates,

rendering every individual invoice or bill a separate transaction rather than part

of a running account. The Appellant further contended that Respondent No. 1 has

not aggregated the claims under these eight invoices or bills but has instead

Page 3 of 10 Comp. App. (AT) (Ins.) No. 1370 of 2023

pursued them separately, including by calculating interest on each invoice

independently.

6. The Appellant submitted that the Adjudicating Authority failed to

appreciate that none of the invoices raised by Respondent No. 1 were ever

acknowledged by the Corporate Debtor and the absence of such acknowledgment,

the very basis of the Company Petition, founded upon disputed invoices, cannot

be sustained.

7. The Appellant further submits that the Adjudicating Authority erred in

holding that the payment of Rs. 40,000/- made through cheque dated 17 May

2016 would extend the period of limitation under the Limitation Act, 1963. The

Appellant submitted that even Respondent No. 1's own documents do not reflect

any adjustment of the sum of Rs. 40,000/- as a last on-account payment towards

the alleged dues. The Appellant submitted that the records of Respondent No. 1

themselves do not establish any acknowledgment or adjustment of the debt by the

Corporate Debtor.

8. The Appellant submitted that the Respondent No. 1 has failed to specify

the particular invoice against which the said sum of Rs. 40,000/- was adjusted.

Furthermore, no specific ledger account maintained by Respondent No. 1 has

been produced, wherein such adjustment is reflected against the alleged dues of

the Corporate Debtor.

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Comp. App. (AT) (Ins.) No. 1370 of 2023

9. The Appellant contended that the copy of the ledger account of the

Corporate Debtor produced by Respondent No. 1 as Annexure G to the original

Petition before the Adjudicating Authority not duly stamped and was therefore

inadmissible in evidence.

10. The Appellant contended that the Respondent No. 1 failed to initiate

appropriate civil proceedings within the prescribed period of limitation and, by

such inaction, allowed the allegedly supplied goods (which were of inferior

quality) to deteriorate over time, to such an extent that at present, the Corporate

Debtor is even unable to produce them for inspection before the Authority.

11. Concluding his arguments, the Appellant requested this Appellate Tribunal

to allow the present appeal.

12. The Respondent No.2 submitted that the he, as an Interim Resolution

Professional (IRP) of the Corporate Debtor, briefed this Appellate Tribunal of the

steps undertaken by the IRP in complying with his statutory duties following his

appointment. The Respondent No.2 further stated that the Adjudicating Authority

directed Respondent No. 1 to advance a sum of Rs. 2,00,000/- to the IRP within

two weeks from the date of receipt of the order for the smooth conduct of the

CIRP, with the IRP to file proof of receipt and the First Progress Report within

30 days. However, to date, Respondent No. 1 has not advanced the said sum to

the IRP.

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Comp. App. (AT) (Ins.) No. 1370 of 2023

13. The Respondent No.2 submitted that pursuant to the publication of Form

A, the IRP has received claims from creditors including the Employee Provident

Fund Organization. The Respondent No. 2 has duly collated all claims received

and constituted the Committee of Creditors (CoC). The list of creditors and report

certifying the constitution of the CoC were submitted before the Adjudicating

Authority on 14.10.2023. The Respondent No.2 submitted that the notice for the

1st Meeting of the CoC, was scheduled to be held on 20.10.2023, however the

Appellant filed this appeal before this Appellate Tribunal, who vide order dated

17.10.2023 granted an interim stay.

Findings

14. We observe that the Respondent No.1, who was Operational Creditor of

the Corporate Debtor and who initiated Section 9 application before the

Adjudicating Authority, did not appear before us. The Respondent No.1 was

proceeded against Ex-parte. The order dated 29.04.2024 reads as under:

"29.08.2024: There is no appearance on behalf of Respondent No.1. On the last date of hearing also he did not appear, therefore, the Respondent No. 1 is proceeded against ex-parte.

Adjourned to 21.10.2024 for arguments. Interim order to continue.

Page 6 of 10 Comp. App. (AT) (Ins.) No. 1370 of 2023

"At this stage, Mr. Praful Saini, Advocate has appeared and submitted that he has filed an application through e-filing as an Intervenor on behalf of the SBI. He seeks permission to file the hard copy of the application. Permitted to do so."

(Emphasis Supplied)

15. Thus, our findings are based on the submissions made by the Appellant,

Respondent No.2 and based on the record made available which included

Impugned Order and submissions made by the Respondent No.1 before the

Adjudicating Authority.

16. We have noted that he Respondent No.1 supplied certain packaging

materials to the Corporate Debtor, which were not fully paid by the Corporate

Debtor. The total debt as claimed by the Respondent No.1was Rs. 8,48,127/-

which constitutes Rs. 3,65,616/- principal and Rs. 4,82,511/- being contractual

interest @ 24% till 31.03.2019.

17. We take note that the Respondent No.1 had annexed copy of the ledger

account maintained by the Corporate Debtor for the period from 01.04.2012 to

31.03.2016 before the Adjudicating Authority.

18. We also take into consideration that a Demand notice was issued by the

Respondent No.1 on 25.01.2019 to the Corporate Debtor, which was delivered to

the Corporate Debtor on 30.01.2019. The Impugned Order notes that the Demand

Notice was never replied by the Corporate Debtor.

Page 7 of 10

Comp. App. (AT) (Ins.) No. 1370 of 2023

19. It is the case of the Appellant that the bills/invoices relied upon and

annexed by the Respondent No.1 to the application before the Adjudicating

Authority were of the year 2013 and was barred by limitation as the application

was filed by the Respondent No.1 in the year 2019 after six years.

20. We have seen that the invoices were from 19.07.2013 to 02.11.2013 and

the last invoice in question outstanding was dated 02.11.2013, as per which 30

days is the credit term and therefore the due date would have been 02.12. 2013.

It has been brought out that the Corporate Debtor neither denied the receipt of the

goods nor raised any dispute at any that of time about condition of goods or its

quality. Further, Demand Notice dated 25.01.2019 was delivered on 30.01.2019

which was never replied by the Corporate Debtor. We also note that Adjudicating

Authority observed that the Corporate Debtor filed the reply to this petition stated

therein for the first time that the goods which had supplied by the Applicant were

not in good condition and were of much inferior quality but without any substance

or evidence.

21. At this stage we take into consideration the relevant portion of the

Impugned Order, which reads as under:

"18. The Applicant has attached a copy of the ledger account of the Applicant in the books of the Respondent at page no. 58 and 59 of the application which confirms that the payment of Rs.50,000/- was made on 10.11.2014, the ledger account is a running account and the debt as per books of accounts of

Page 8 of 10 Comp. App. (AT) (Ins.) No. 1370 of 2023

the Corporate Debtor is more than Rs.1,00,000/- (Rupees One Lakh). Further, another payment of Rs.40,000/- was admittedly made though cheque on 17.05.2016 which extended the limitation since such payments were made within the period of three years from the date of the last invoice."

(Emphasis Supplied)

22. The Appellant has raised two issues i.e. Limitation and Pre-existing

Disputes against the Impugned Order, which we shall examine.

23. As regarding to the issue of limitation, we note that the last invoice

outstanding was dated 2nd November 2013, as per which 30 days is the credit

term and therefore the due date would be 2nd December 2013. By way of

acknowledgement of debt by the Corporate Debtor on 17th May 2016 in form of

the entries in the books of accounts which is reflected by way of Ledger account

of the Respondent No.1 in the books of Corporate Debtor, which was supplied by

the Corporate Debtor and further the part payment by cheque of ₹40,000 which

got cleared on 20th May 2016, would extend the period of limitation under section

18 and 19 of Limitation Act. Thus, we find that the Respondent No.1 filed the

section 9 application within the limitation. We do not find any error in the

Impugned Order on this ground.

24. Now we will examine aspect of pre-existing dispute. We note that the

Corporate Debtor never raised are pre-existing disputes before filing reply before

Page 9 of 10 Comp. App. (AT) (Ins.) No. 1370 of 2023

Adjudicating Authority. The Appellant did not link any letter or email sent to the

Respondent No.1 even before us. We have seen from Impugned Order that the

argument of inferior quality of goods was for the first time raised by the Appellant

only in affidavit in reply by the Corporate Debtor before the Adjudicating

authority and that too without any of evidence supporting the assertion. We have

also noted that statutory notice was also not replied thus we consider the alleged

dispute as not legally tenable and an assertion of fact unsupported by evidence

and therefore is liable to be rejected.

25. Thus, we are not convinced that the pleading of the Appellant and reject

the same. The Appeal fails. No cost. I.A., If any are closed.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Justice Mohammad Faiz Alam Khan] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical)

Sim

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