Rawfert Resources Private Limited vs R V Global Private Limited

[PER: CORAM]

This C.P. (IB) No. 367 of 2025 (Application) was filed on 29.01.2025 by Rawfert Resources Private Limited, the Operational Creditor (OC) having CIN No.: U51496DL2021PTC382610, 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, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against R V Global Private Limited, the Corporate Debtor (CD), having CIN No.: U74990MH2009PTC195301.

As per Part IV of the Application, the amount claimed to be in default is Rs.13,98,94,883.92/- (Thirteen Crores Ninety-Eight Lakhs Ninety-Four Thousand Eight Hundred and Eighty-Three Rupees and Nine two Paisa) out of which Rs.11,11,94,925.00/- is towards principal dues and Rs.2,86,99,958.92/- towards interest. The date of default in Part IV is stated to be 27.04.2023.

The Applicant has proposed one Mr. Bhattiprolu Pavan Kumar, having Registration No. as IBBI/IPA-002/IP-N00762/2018-2019/12371, to act as the Interim Resolution Professional (IRP) in case the Application is admitted.

The Applicant is engaged in the business of trading and conducting High Seas Sales of goods. It entered into two separate contracts with the CD for the supply of Rock Phosphate, with a guaranteed minimum P2O5 content of 29.50%.

The first contract, dated 03.01.2023 (Contract No. HSS/RP/10), involved the supply of 8,000 MT (metric tons) aboard MV Sparrow, valued at Rs.9,90,90,000/-. Under this contract, the Applicant raised 3 invoices with payment terms of 150 days for one invoice (HSS/RP/10/23) and 120 days for the other two invoices (HSS/RP/11/23 and HSS/RP/12/23).

The second contract, dated 31.03.2023 (Contract No. HSS/RP/24), involved the supply of 5,800 metric tons on MV One Victory, valued at Rs.7,07,74,790/-. This contract also included three invoices (HSS/RP/27/23, HSS/RP/28/23 and HSS/RP/29/23) payable within 120 days.

The Applicant contends that the CD paid only 1 invoice (HSS/RP/10/23) in full but failed to make payments on the remaining 5 invoices despite the due dates having long passed. The Applicant issued Demand Notices under Form 3 and Form 4 on 15.05.2024, which included detailed calculations of the outstanding amount along with copies of all invoices.

Post-dated cheques aggregating to Rs.14,86,35,000/- were initially given by the CD and its associate company, Bhilai Engineering Corp (Fert), with the following details:

However, BEC Fertilizer vide its letter dated 24.07.2023, requested not to deposit the said cheques as payment for the 3 invoices under the first contract would be paid by August 2023. However, as there has been no further payment received by the Applicant from the CD or any other entity on their behalf. The Applicant asserts that it has made multiple attempts to recover the dues amicably, but the Corporate Debtor defaulted.

Computation and Working for Amount in Default is attached as Annexure 'I' to the Application.

The Applicant has attached the following supporting documents along with the Application and Rejoinder dated 17.06.2025, respectively:

Reply dated 29.05.2025 was filed, affirmed by one Mr. Tirath Raj Singh, authorized representative of the CD, authorised vide Board Resolution dated 25.04.2025 passed by the CD.

The CD asserts that the quality of the Rock Phosphate supplied by the Applicant was not as per the agreed specifications. The contract guaranteed a minimum P2O5 content of 29.5%, but the supplied goods failed to meet this standard even though, under the Agreement, the seller was required to appoint an international agency for quantity and quality check of the rock phosphate at the load port. The relevant clauses from the First HSS Agreement are elucidated below:

Further, the moisture content exceeded the contractually permitted limit of 4.5%, with independent inspection reports by Mitra S.K. Private Limited showing values of 6.77% for the first shipment and 5.80% for the second shipment.

The CD contends that the Applicant failed to provide critical shipping documents, such as the bills of lading nos. 1, 2 and 3 dated 28.12.2022 under First HSS Invoices; bills of lading nos. 7, 8 and 9 dated 29.03.2023 under Second HSS Invoices; and quality inspection reports, which are essential for verifying the quality and quantity of the goods delivered. This omission violated the terms of the contract and deprived the CD of the ability to properly assess the goods at the time of receipt. The absence of these documents directly impacted the CD’s capacity to process the payment legitimately.

In addition to quality disputes, the CD points out discrepancies in the payment timelines claimed by the Applicant. There exist grave inconsistencies in the Application, as the date of default mentioned in the above therein is 27.04.2023, but the First HSS Invoices and Second HSS Invoices were due on 10.05.2023 and 27.07.2023; respectively. The Applicant’s calculation of the date of default is erroneous, as it pre-dates the actual due dates on the invoices, making the claim of default premature and factually incorrect. The CD emphasizes that it never refused payment but withheld it due to genuine grievances concerning product quality and contractual non-compliance by the Applicant.

The CD also disputes the Applicant’s claim of interest at the rate of 24% per annum on the outstanding amount. The contracts do not stipulate such a high rate of interest, and the CD asserts that any interest must be calculated strictly as per agreed contractual terms or applicable law. The excessive interest claimed by the Applicant is arbitrary and unjustified.

Furthermore, the CD highlights that there has been a long-standing dispute between the parties regarding the quality of goods and payments. The CD had addressed a letter dated 15.07.2024 in response to the Demand Notice raising concerns regarding the quality of the consignment. Thus, it is evident that there exists a per-existing dispute between the parties. This dispute is subject to the arbitration clause embedded in the Agreements, which clearly mandates that any disagreements must be resolved through arbitration rather than litigation or insolvency proceedings. By filing this Application without exhausting the arbitration mechanism, the Applicant has violated the procedural sanctity of the agreement.

The CD also challenges the validity and propriety of the Demand Notices (in Form 3 or Form 4) issued by the Applicant as the Demand Notices are signed by an alleged director of the Applicant, the Demand Notices are issued to the CD by an Advocate purporting to be authorised on behalf of the Applicant.

Additionally, the CD brings to attention the withdrawal of the post-dated cheques originally issued by itself and an associate company. This withdrawal was communicated formally to the Applicant due to the Applicant’s breach of contract and quality issues, thereby legally justifying the cessation of payments. The CD paid certain amounts to the Applicant as per the agreed terms and withheld payment of the remaining amount on account of defects and deficiencies in the goods supplied by the Applicant.

The Rejoinder dated 17.06.2025 was signed and authorised by Mr. Nilkamal Mandal, who is stated to be a Director of the Applicant.

The Applicant states that these is no Authority Letter attached to the Affidavit in Reply. Because of this, the Reply lacks proper authorisation. This is a serious issue, making the Reply unreliable. It should be dismissed with costs.

The CD always intended to repay the debt to the Applicant. This is clear from the Post-Dated Cheques issued by the CD and a related entity, covering the full outstanding amount. This shows that the current "technical issues" are an afterthought. The consignment was of acceptable quality and was likely used by the CD. The only reason the CD hasn’t paid is its current financial distress. Therefore, this is a fit case for admission into the CIRP under the IBC.

Bills of Lading numbered 1, 2, 3, 7, 8, and 9 have been attached to the Rejoinder.

The claim that the Applicant did not carry out an Inspection Report is false. Inspections were done at both the loading and arrival ports. Reports from both transactions are included in the Rejoinder.

The CD claims that it repeatedly asked for a quality assessment report for the rock phosphate. But there is no proof of any such request in their Affidavit in Reply.

Even if the Inspection Report by Mitra S.K. is accepted (without admitting or agreeing to it), there is still no pre-existing dispute. Both HSS Agreements contain clear terms. If moisture exceeds 4.5%, the excess value is to be deducted from the invoice—not grounds to reject the goods. So, the only potential issue would be the exact amount to deduct, not rejection of the consignment.

The Invoice dated 10.01.2023 says payment is due 120 days from the Bill of Lading dated 28.12.2022. Yet, the CD incorrectly calculated 120 days from the invoice date (10.01.2023), which resulted in an incorrect default date. Therefore, the statements in Paragraphs 7 and 8 of their reply are factually incorrect and irrelevant. The correct date of default is 29.04.2023— 120 days from 28.12.2022—as rightly stated.

In this case, whether or not interest is included, the default amount crosses the required threshold of Rs. 1 Crore. The principal amount in default alone is Rs.11,11,94,925/-.

The advocate for the Applicant did not issue the Demand Notice personally. It was sent under instructions. So, the allegation that the Demand Notice violates legal provisions is completely baseless.

The First HSS Agreement was executed on 03.01.2023, with payment terms requiring settlement within 120 days from the date of the Bills of Lading, which were issued on 28.12.2022. Invoices were raised on 10.01.2023, making the due date for payment 27.04.2023.

The Inspection Report dated 30.12.2022 confirmed that the goods pertaining to the First HSS Agreement met the contractual specifications at dispatch.

The Second HSS Agreement was signed on 31.03.2023, also with 120-day payment terms from the Bills of Lading dated 29.03.2023. Invoices were issued on 04.04.2023, setting the due date as 27.07.2023. However, since the first default occurred on 27.04.2023, that is considered the Date of Default.

The Inspection Report dated 29.03.2023 similarly confirmed that the cargo under the Second HSS Agreement met contractual requirements.

The CD has not denied acceptance of the goods under either agreement, thereby implicitly admitting receipt and acceptance.

The CD’s Reply to the Demand Notice does not dispute the amounts due, the existence of agreements, or the validity of invoices. The only issue raised is regarding the quantum payable.

A letter from the Applicant’s Bank Manager confirms that no payments have been received against the outstanding debt, thereby evidencing default.

The CD has not produced any evidence of a dispute prior to the issuance of the Demand Notice. This aligns with the Hon’ble Supreme Court’s ruling in Mobilox Innovations v. Kirusa Software (Civil Appeal No. 9405/2017), which holds that a mere bluster or unsupported claim does not constitute a valid dispute under the IBC.

As per the HSS Agreements, rejection of the goods is only permitted if P2O5 falls below 29.50%; otherwise, only payment adjustment is allowed. Therefore, liability always exists.

The liability under all 3 First HSS Invoices was expressly acknowledged by the CD via email dated 24.07.2023 and it has fully paid the 1^st invoice, while the 2^nd and 3^rd invoices therein remain partially paid.

Inspection Report dated 26.01.2023, conducted by the CD, confirms that the goods under all three invoices were identical in quality. Since the first was fully paid, the remaining two are implicitly accepted.

The goods under the Second HSS Agreement were also accepted without any dispute.

On 19.05.2023, the CD issued Post-Dated Cheques along with a cover letter for the entire outstanding amount under the 5 unpaid/partially paid invoices, indicating intent to pay.

CD’s Reply to the present Application is a misleading attempt to fabricate a dispute where none exists.

Further, the questions raised about the Bills of Lading and Inspection Reports are baseless, as partial payments have already been made under those very documents. These concerns have also been adequately addressed in the Rejoinder.

The Inspection Reports submitted by the CD itself show the cargo met the minimum 29.50% P2O5 requirement, confirming the goods were non-rejectable under both agreements.

The Applicant claims the default date as 27.04.2023 for both the First and Second HSS Invoices. While this applies to the First HSS (based on a 120-day term from the Bill of Lading dated 28.12.2022), the Second HSS Invoices were only due on 27.07.2023, as the Bill of Lading is dated 29.03.2023. This results in a clear inconsistency, making the Petition defective since the date of default is a critical criterion under Section 9 of the IBC.

Neither of the HSS Agreements provides for charging interest. However, the Petitioner has claimed 24% p.a., which is unilateral and contrary to the contract, rendering the interest claim untenable.

The rock phosphate was required to meet specific technical standards, including ≤1% R2O3 and ≤4.5% moisture, with acceptance of deviations at the Corporate Debtor’s discretion.

Both agreements mandated quality checks at both load and discharge ports, and joint analysis at a third-party lab in case of dispute. While the CD conducted discharge port inspections through Mitra S.K. Pvt. Ltd., revealing excessive moisture (6.77% and 5.80%) and other deviations, the Applicant failed to conduct or submit any such inspection at the discharge port. The deviations in the quality of the rock phosphate sold under the HSS Agreements, as evident from the Certificate of Analysis, are as follows:

The Applicant, in its Rejoinder, only relies on loading port inspection reports, while omitting mandatory discharge port inspection, where non-compliance was identified. This suppression of material evidence further supports the existence of a dispute.

The Demand Notice dated 15.05.2024 is defective as it uses both Form 3 and Form 4, creating ambiguity. Moreover, it was signed by a Director but issued by an Advocate without clear authorisation, violating procedural requirements under the IBC.

Given the incorrect default date, unauthorised interest claim, pre-existing dispute on quality, suppression of key inspection reports, and a procedurally defective demand notice, this Application is not maintainable under Section 9 of the IBC and is liable to be dismissed.

We have perused the documents as placed before us and heard both the Ld. Counsels for the Applicant and the CD.

The admitted facts in this case are as under:

This is undisputed that the CD accepted goods under both Agreements and even made part payment toward one invoice. The issuance of post-dated cheques covering the outstanding dues further confirms acknowledgment of liability. This aligns with the principle laid down in Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407, where the Hon’ble Supreme Court held that once default is established, the Adjudicating Authority must admit the petition.

The CD alleges quality issues based on inspection reports from Mitra S.K. Pvt. Ltd. conducted at the discharge port, post-delivery. However, the Agreements contain a clear clause that moisture above 4.5% attracts invoice deduction and not rejection. The P2O5 content—which is the only ground for rejection—has not been proven to fall below 29.50%. The Applicant has filed inspection reports from agencies conducted at the load port, confirming conformity with contractual specifications. Disputes arising post-facto cannot defeat an otherwise valid application under Section 9. As held in Mobilox Innovations (supra), a dispute raised after the Demand Notice, without supporting contemporaneous material, does not amount to a “pre-existing dispute”. The CD’s alleged grievances were raised only after receipt of the Demand Notice. This delay weakens the credibility of its defence and suggests the dispute is an afterthought.

The Applicant claims 24% interest p.a. While the Agreements do not specify an interest rate, the absence of a contractual clause does not affect the principal amount of debt. The statutory threshold under Section 4 IBC is crossed even without interest. Disallowing the interest component, therefore, does not affect admissibility.

The existence of an arbitration clause does not preclude the filing of an application under Section 9 of the IBC. It is establishef law that the operational creditor may initiate insolvency proceedings even when an arbitration agreement is present, as the objective of the IBC is resolution rather than mere recovery of dues through traditional dispute resolution mechanisms. Moreover, the Hon’ble Supreme Court in Tata Consultancy Services Ltd. v. Vishal Ghisulal Jain, [Civil Appeal No 3045 of 2020] has categorically held:

Accordingly, it is now well settled that the jurisdiction of the Adjudicating Authority under the IBC is not excluded merely by reason of an arbitration clause. Hence, the CD’s argument that arbitration should be pursued before insolvency is legally unsustainable.

The Applicant has correctly calculated the default date as 27.04.2023, being 120 days from the Bill of Lading dated 28.12.2022 for the First HSS Agreement. The second set of invoices became due on 27.07.2023. The use of 27.04.2023 as the first default date is sufficient for the purposes of triggering insolvency proceedings. Section 9 requires a single default and not a default across all invoices.

The liability under all 3 First HSS Invoices (aggregating to more than the threshold of Rs. 1 Crore) was expressly acknowledged by the CD via email dated 24.07.2023, and it has fully paid the 1^st invoice, while the 2^nd and 3^rd invoices therein remain partially paid. This acknowledgement alone is enough to admit the present Application as it meets the threshold of Rs. 1 Crore.

In view of the above discussion, it is evident that the Applicant is an Operational Creditor within the meaning of the IBC, that there exists a legally enforceable operational debt, that the CD has committed default in repayment of such debt despite a statutory Demand Notice, and that the alleged disputes raised are neither bona fide nor pre-existing but are illusory and afterthoughts. The Application is also filed within the limitation period. Accordingly, all statutory requirements under Section 9 of the IBC are fulfilled.

The Applicant has also proposed the name of an IRP, Mr. Bhattiprolu Pavan Kumar, whose valid AFA expired on 30.06.2025. hence, we are appointing another IRP from the list of RPs. Further, this Application is complete as all the required documents have been attached along with the Application. Accordingly, the present Application deserves to be admitted under Section 9 of the IBC, 2016.

We make it clear that at this stage we have not crystallised the amount as claimed in this Application; the same is left to be collated by the IRP.

In view of the aforesaid findings, this Application, being C.P. (IB) 367/MB/2025, filed under Section 9 of IBC, 2016, by Rawfert Resources Private. Limited, the OC, for initiating CIRP in respect of R V Global Private Limited, the CD, is admitted.

We further declare a moratorium under Section 14 of IBC, 2016, with consequential directions as mentioned below:

I. We prohibit:

II. That the supply of essential goods or services to the CD, if continuing, shall not be terminated or suspended or interrupted during the moratorium period.

III. That the order of moratorium shall have effect from the date of this order till the completion of the CIRP or until this Tribunal approves the resolution plan under Section 31(1) of the IBC or passes an order for the liquidation of the CD under Section 33 thereof, as the case may be.

IV. That the public announcement of the CIRP shall be made in immediately as specified under Section 13 of the IBC read with Regulation 6 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

V. That this Bench hereby appoints Mr. Madan Bajarang Lal Vaishnawa, having Registration No. as IBBI/IPA-001/IP-P-02011/2020-2021/13052 and e-mail ID madan.vaishnawa@icai.org, having valid Authorisation for Assignment up to 31.12.2025, from the panel of as provided by the IBBI, as the IRP in this matter.

VI. That the fee payable to IRP/RP shall be in accordance with such Regulations/Circulars/ Directions as may be issued by the IBBI.

VII. That during the CIRP Period, the management of the CD shall vest in the IRP or, as the case may be, the RP in terms of Section 17 or Section 25, as the case may be, of the IBC. The officers and managers of the CD are directed to provide effective assistance to the IRP as and when he takes charge of the assets and management of the CD. Coercive steps will follow against them under the provisions of the IBC read with Rule 11 of the NCLT Rules, 2016 for any violation of the law.

VIII. That the IRP/IP shall submit to this Tribunal periodical reports with regard to the progress of the CIRP in respect of the CD.

IX. In exercise of the powers under Rule 11 of the NCLT Rules, 2016, the OC is directed to deposit a sum of Rs.3,00,000/- (Three Lakh Rupees) with the IRP to meet the initial CIRP cost arising out of issuing public notice and inviting claims, etc. The amount so deposited shall be interim finance and paid back to the OC on priority upon the funds becoming available with IRP/RP from the Committee of Creditors (CoC). The expenses incurred by IRP out of this fund are subject to approval by the CoC.

X. A copy of this Order be sent to the Registrar of Companies, Maharashtra, Mumbai for updating the Master Data of the Corporate Debtor.

XI. A copy of the Order shall also be forwarded to the IBBI for record and dissemination on their website.

XII. The Registry is directed to immediately communicate this Order to the OC, the CD and the IRP by way of Speed Post, e-mail and WhatsApp.

XIII. Compliance report of the order by Designated Registrar is to be submitted today.