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Judgment
This Petition has been filed under Section 9 of the Insolvency and Bankruptcy code, 2016 ("IBC") read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 by Fettech Commercial Enterprises Private Limited, (hereinafter referred to as 'Operational Creditor') seeking initiation of Corporate Insolvency Resolution Process against Mercury Trade Links Limited (hereinafter referred to as 'Corporate Debtor') for the outstanding amount of Rs.2,70,00,000/-.
As per Part IV of the application, it is averred that the Operational Creditor and the corporate debtor are companies incorporated under the provisions of Companies Act, engaged in the business of agriculture related products. The Applicant submitted that during the period from 01.04.2024 to 31.12.2024, the Corporate Debtor approached the Operational Creditor for supply of agricultural products which were supplied and received by the Corporate Debtor without dispute. It is submitted that a running account was maintained, with the invoices being payable within 3 months of issuance. It is submitted that against total supplies of Rs.4,41,50,034.05/-, the Corporate Debtor paid Rs.1,71,50,034.05/- and an amount of Rs.2,70,00,000/- remained unpaid. The Applicant stated that the last invoice was raised on 31.12.2024 and the debt fell due on 31.03.2025, i.e. 90th day from the date of invoice, which constitutes the date of default. The Applicant further submits that a demand notice in Form-3 and Form-4 dated 15.11.2025 was issued and delivered to the Corporate Debtor on 18.11.2025. It is submitted that neither any dispute was raised nor payment was made by the Corporate Debtor. Therefore, the Applicant seeks initiation of CIRP against the Corporate Debtor for the unpaid operational debt of Rs.2,70,00,000/-. The date of default stated to be 31.12.2024.
The Operational Creditor has proposed the name of Insolvency Professional Mrs. Dipti Narayan Mundra having IBBI Reg. No. IBBI/IPA-001/IP-P-02845/2023-2024/14366, email- [email protected] to act as a Interim Resolution Professional. The consent letter dated 08.01.2026 from the IP has been placed on record.
The Respondent has filed its reply and disputed the amount of Rs.2.70 crore claimed by the applicant as there were pre-existing disputes regarding delayed supply and inferior quality of goods. It states that credit notes were issued by the respondent in respect of the quality issues and after reconciliation the actual amount payable would not exceed Rs.2 crore. It is submitted that such commercial disputes cannot be decided summarily in proceedings under the Code. The Respondent also objected the applicant's authority to institute the petition, pointing to the different Board Resolutions authorising issuance of the demand notice and filing of the petition. It further submitted that the Corporate Debtor is a going concern with no secured financial creditor and that initiation of CIRP would adversely affect persons dependent upon it.
In compliance of order dated 16.06.2026, the applicant filed an affidavit stating that receipt of the goods by the Corporate Debtor is undisputed and no documentary evidence has been produced in support of the alleged dispute. It is further submitted that the agricultural produce supplied is exempt from GST under Section 23 of the CGST Act, 2017 and Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, at Serial No. 24, under Heading 9986 and therefore GST is not applicable to the transactions in question. The applicant further relied upon the endorsement letter dated 04.01.2019 issued by Deputy Finance, Indian Council of Agricultural Research Krishi Bhavan, New Delhi.
The Respondent, by way of the Additional Affidavit submitted its Net worth certificate along with audited Balance Sheets stated that the Corporate Debtor suffered substantial losses due to unseasonal rains, as reflected in its limited review report for the half-year ended September 2025. It is further stated that, being engaged in agricultural products, the Corporate Debtor had advanced payments to farmers/vendors, but due to seasonal and other factors, the expected quality of produce was not received and recovery of such advances remained limited. The Respondent also submits that the Corporate Debtor has no secured financial creditors.
We have heard the learned Counsels for both the parties and perused the documents on record along with written submissions of the parties.
8. Observations & findings:
a. From the documents submitted and pleadings made, it is observed that the applicant had supplied agricultural produce (vegetables etc.,) which had GST exemptions, with proof of delivery and the invoices mention 90 days credit. The invoices raised during the period from 01.04.2024 to 31.12.2024 remained unpaid. Against the total supplies of Rs.4,41,50,034.05/-, the Corporate Debtor paid Rs.1,71,50,034.05/-, leaving an outstanding principal amount of Rs.2,70,00,000/-. No interest has been claimed, there being no stipulation for interest in the invoices. The last invoice was raised on 31.12.2024 and, in terms of the agreed credit period of 90 days, the debt became due on 31.03.2025. The application has thus been filed within the prescribed period of limitation and the operational debt is above the threshold prescribed under Section 4 of the Code.
b. The demand notice was issued on 15.11.2025 in Form 3 and Form 4. The respondent has apparently not replied to the same. The respondent has not provide any documentary proof as to pre-existing disputes, even though it is mentioned in the reply that various credit notes were issued on quality aspects.
c. The debt is not denied by the respondent and seeking a reconciliation meeting even after filing this application or before or after issue of the demand notice cannot be accepted, as the terms of trade seems to be even without interest and principal amount is debt sought to be due. Further, the CD is observed to be a listed entity with a high level of trade payables and had only cash as assets from the balance sheet submitted.
d. In view of the above, we are satisfied that there exists an operational debt of Rs.2,70,00,000/- and that a default has occurred. The debt is due and payable, the demand notice has been served to the CD and no genuine pre-existing dispute has been established by the Corporate Debtor. Hence, we pass the following orders:
ORDER
I. CP (IB) 24 of 2026 is allowed.
II. The Corporate Debtor - Mercury Trade Links Limited is admitted into Corporate Insolvency Resolution Process under section 9(5) of the Code.
III. The order of moratorium under section 14 of the Code shall come to effect from the date of this order till the completion of the Corporate Insolvency Resolution Process or until this Adjudicating Authority approves the Resolution Plan under sub-section (1) of section 31 or passes an order for liquidation of the corporate debtor under Section 33 of the IBC 2016, as the case may be.
IV. However, in terms of Section 14(2) to 14(3) of the Code, the supply of essential goods or services to the corporate debtor as may be specified, if continuing, shall not be terminated or suspended, or interrupted during the moratorium period.
V. We hereby appoint Mr. Manish Kumar Bhagat, Registered Insolvency Professional from the penal provided by IBBI having Reg. No. IBBI/IPA-001/IP-P00856/2017-2018/11438, [email protected], under Section 13(1)(c) of the Code to act as Interim Resolution Professional (IRP). He shall conduct the Corporate Insolvency Process as per the Insolvency and Bankruptcy Code, 2016 r.w. Regulations made thereunder.
VI. The IRP so appointed shall make a public announcement of the initiation of Corporate Insolvency Resolution Process and call for submissions of claims under section 15, as required by Section 13(1)(b) of the Code.
VII. The IRP shall perform all his functions as contemplated, inter-alia, by sections 17, 18, 20 and 21 of the Code. It is further made clear that all personnel connected with the corporate debtor, its promoters, or any other person associated with the management of the corporate debtor are under legal obligation as per section 19 of the Code to extend every assistance and cooperation to the IRP. Where any personnel of the corporate debtor, its promoters, or any other person required to assist or co-operate with IRP, do not assist or cooperate, the IRP is at liberty to make appropriate application to this Adjudicating Authority with a prayer for passing an appropriate order.
VIII. The IRP is expected to take full charge of the corporate debtor's assets, and documents without any delay whatsoever. He is also free to take police assistance in this regard, and this Court hereby directs the Police Authorities to render all assistance as may be required by the IRP in this regard.
IX. The IRP shall be under a duty to protect and preserve the value of the property of the 'corporate debtor company' and manage the operations of the corporate debtor company as a going concern as a part of obligation imposed by section 20 of the Code.
X. The IRP or the RP, as the case may be shall submit to this Adjudicating Authority periodical report with regard to the progress of the CIRP in respect of the Corporate Debtor.
XI. We direct the Operational Creditor to pay IRP a sum of Rs.2,00,000/- (Rupees Two Lakh Only) in advance within a period of 7 days from the date of this order to meet the cost of CIRP arising out of issuing public notice and inviting claims till the CoC decides about his fees/expenses.
XII. The Registry is directed to communicate this order to the Operational Creditor, corporate debtor, and to the Interim Resolution Professional, the concerned Registrar of Companies and the Insolvency and Bankruptcy Board of India after completion of necessary formalities, within seven working days and upload the same on the website immediately after pronouncement of the order. The Registrar of Companies shall update its website by updating the Master Data of the Corporate Debtor in MCA portal specific mention regarding admission of this Application and shall forward the compliance report to the Registrar, NCLT.
XIII. The commencement of the Corporate Insolvency Resolution Process shall be effective from the date of this order.