The National Company Law Tribunal (NCLT) at Ahmedabad has rejected a CIRP plea against Electrotherm (India) Ltd. over an operational debt of about Rs. 5.70 crore, finding that the claim was tied up in disputes raised well before the insolvency notice.
The order was passed by the bench of Judicial Member Shammi Khan and Technical Member Sanjeev Sharma.
A.T. Trade Overseas Pvt. Ltd., which moved the tribunal on July 7, 2025, said the dues arose from supplies of coal, iron ore pellets and billets under purchase orders placed between May and October 2022
Invoices were raised between September and November 2022, and the company said payments were not made despite repeated reminders.
On February 7, 2025, a demand notice was issued. Electrotherm responded on February 24, 2025, disputing the liability. The creditor replied again on May 13, 2025 before approaching the tribunal.
Electrotherm said the claim could not be treated as undisputed. It pointed to issues with the quality of goods, short supply, and debit notes that had been raised earlier. These concerns, it said, were communicated through emails and other correspondence before the notice was sent.
It also referred to pending cheque bounce proceedings and earlier disagreements between the parties to show that the dispute had been ongoing.
The creditor, however, maintained that the goods were supplied and accepted in the ordinary course of business and that the objections were raised later to avoid payment.
Looking at the record, the tribunal noted that the supply of goods and invoices were supported by documents. The dispute lay in whether the liability was clear, especially in light of the correspondence exchanged before the demand notice.
Issues relating to quality, quantity, and financial adjustments would require examination of evidence, which cannot be done in insolvency proceedings, the bench said.
With that, the tribunal held that a pre-existing dispute existed and declined to admit the plea.
For Appellants: Senior Advocate Manish Bhatt with Advocate Yash Dadhich
For Respondents: Senior Advocate Saurabh Soparkar and Rashesh Sanjanwala with Ravi Pahwa