RKB Global Limited vs Tulip Polychem Private Limited

The present Appeal has arisen out of the Judgment dated 19.12.2025 passed by the Adjudicating Authority (Ld. National Company Law Tribunal, Ahmedabad Bench), in Company Petition (IB) No. 277 of 2024, whereby the Application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “Code”) by the Appellant- RKB Global Limited, against the Respondent- Tulip Polychem Private Limited, seeking initiation of Corporate Insolvency Resolution Process (“CIRP”) came to be dismissed. The dispute between the parties pertains to liability towards freight charges, demurrage charges and anchorage charges arising out of shipment of iron ore cargo from Redi Port in India to Rizhao Port in China. A Charter Party Agreement was executed between the Appellant/RKB Global Limited and Jaldhi Overseas Pte. Ltd. for transportation of iron ore Both the Appellant/RKB Global Limited as well as the Respondent/Tulip Polychem Private Limited had loaded their respective consignments on the same vessel M.V. Sun Lucia. The freight invoice for the consolidated cargo came to be raised upon RKB Global Limited because the Charter Party Agreement stood in its name.

Aggrieved by the impugned order the Appellant contends impugned order overlooks material documentary evidence; commercial correspondence; payment records; debit notes; settlement terms; and admissions already recorded before this Tribunal in earlier appeal.

Brief Facts of the Case

The facts relevant for deciding this appeal are as given below:

Following execution of the Settlement Agreement and payment of dues to Jaldhi Overseas Pte. Ltd., the Appellant issued Debit Notes dated 06.02.2024 bearing Nos. RKB/DN/01-23-24 and RKB/DN/02-23-24 upon the Respondent claiming reimbursement of freight charges amounting to Rs. 2,63,80,074/- and demurrage/anchorage charges amounting to Rs. 60,21,111/-respectively. The total claim raised by the Appellant against the Respondent thus aggregated to Rs.3,24,01,185/-. The Appellant thereafter forwarded the aforesaid debit notes to the Respondent through communication dated 23.03.2024 and called upon the Respondent to reimburse the amounts allegedly paid on its behalf.

Ld. Counsel for the Appellant/RKB Global Limited submits that it had entered into a Charter Party Agreement dated 22.04.2019 with Jaldhi Overseas Pte. Ltd. (“Jaldhi”) for chartering the Vessel MV Sun Lucia for transportation of cargo from a port in India to a port in China. The said Charter Party Agreement has been placed on record. Under the said arrangement, the Appellant shipped 27,500 WMT of iron ore, whereas the Respondent, Tulip Polychem Pvt. Ltd., shipped 27,107 WMT of iron ore on the same Vessel MV Sun Lucia. It is submitted that both the Appellant and the Respondent were independently liable to pay freight charges corresponding to their respective consignments transported through the said vessel.

Ld. Counsel further submits that Jaldhi, on oath and by way of Affidavit before this Hon’ble Tribunal, has categorically admitted that it had received freight charges from the Appellant, but had not received any freight charges from the Respondent. The said statement of Jaldhi has already been recorded by this Hon’ble Tribunal in its Order dated 05.02.2024 passed in Company Appeal (AT) (INS) No. 237 of 2024. It is submitted that the Respondent has never challenged the said Order and, therefore, the findings recorded therein have attained finality against the Respondent. Reference in this regard has been made to the Additional Affidavit filed by the Appellant dated 03.03.2026.

He submits that Clause 7 of the Settlement Agreement executed between the parties clearly records that Jaldhi Overseas Pte. Ltd. confirmed and declared that it had not received any payment from Tulip Polychem Pvt. Ltd. under the Charter Party Agreement and further clarified that nothing in the Settlement Agreement would prejudice the rights of RKB Global Limited against Tulip Polychem Pvt. Ltd. under the Charter Party Agreement. The Settlement Agreement further specifically permitted the Appellant to recover freight, demurrage and anchorage charges from the Respondent. Counsel for the Appellant submits that the said clause conclusively demonstrates that the liability towards freight charges remained unpaid by the Respondent.

He further submits that this Appellate Tribunal, while disposing of Company Appeal (AT) (Ins.) No. 237 of 2024 by Order dated 05.02.2024, had recorded the Settlement Agreement between the parties and set aside the admission order passed under Section 9 of the Code, in view of the settlement arrived at between the parties. The order specifically records that the Operational Debt had been settled and directed the Appellant therein to pay the fee and expenses of the IRP. Counsel for the Appellant submits that the said Order assumes significance because the same records the settlement terms under which Jaldhi expressly denied having received any freight payment from the Respondent.

It is submitted that the Respondent, in its reply to the Statutory Demand Notice issued by the Appellant, itself alleged that it had paid freight charges to Jaldhi. Ld. Counsel for the Appellant submits that such a stand itself amounts to an admission of liability under the IBC regime, because the Respondent thereby admitted the existence of freight liability arising from shipment of its cargo on the vessel arranged by the Appellant. The only defence sought to be raised by the Respondent was that the amount had allegedly been paid to Jaldhi.

It is his submission that the Ld. Adjudicating Authority in the Impugned Judgment itself, has recorded a categorical finding that the Respondent failed to produce any document from its bankers demonstrating payment of freight charges to Jaldhi. The Appellant submits that the Respondent has not challenged this specific finding recorded by the Adjudicating Authority and, therefore, the said finding has attained finality against the Respondent. It is submitted that if the Respondent still seeks to contend before this Appellate Tribunal that freight charges were in fact paid to Jaldhi, then it is incumbent upon the Respondent to produce cogent documentary evidence including banking records and income-tax returns to substantiate such payment. In absence of such documents, the Respondent cannot be permitted to continue making assertions contrary to the material on record.

Ld. Counsel stated that the Adjudicating Authority has further held in the Impugned Judgment that the Respondent had failed to place on record any material to show that either the Respondent or the purchaser was required to directly pay freight charges to Jaldhi bypassing the Appellant. The Adjudicating Authority further recorded that the contractual arrangement with Jaldhi existed only with the Appellant and not with the Respondent. Counsel for the Appellant submits that these findings clearly establish that the Appellant alone had chartered the vessel and was liable towards the ship owner, whereas the Respondent remained liable to reimburse freight charges corresponding to its cargo shipment.

It is submitted that since the Charter Party Agreement was executed between Jaldhi and the Appellant, Jaldhi subsequently assigned the debt owed by the Respondent to the Appellant under the Settlement Agreement dated 02.02.2024. Counsel for the Appellant submits that such assignment became necessary because the Respondent failed to pay freight charges either to Jaldhi or to the Appellant.

It is submitted that the dismissal of the Section 9 Application by the Adjudicating Authority on the grounds mentioned in the Impugned Judgment is legally unsustainable and contrary to the record. Ld. Counsel thereafter made his submissions regarding the findings of the Adjudicating Authority in respect to three issues which were framed by the Adjudicating Authority.

The first finding of the Adjudicating Authority was that the Appellant has not been able to establish the existence of operational debt and a corresponding default on part of the Respondent within the meaning of Section 9 of the Code. In response to the same, Ld. Counsel submits that the Adjudicating Authority failed to appreciate the Respondent’s own admissions on record. The Respondent itself admitted that its cargo was transported on the Vessel MV Sun Lucia which had been chartered by the Appellant. Consequently, the Respondent was liable to pay freight charges corresponding to its shipment. It is submitted that the Respondent further admitted the debt by claiming in its reply to the Statutory Demand Notice that freight charges had allegedly been paid to Jaldhi. The Appellant submits that once the liability itself stood admitted, the Adjudicating Authority erred in holding that operational debt and default were not established.

In its second finding the Adjudicating Authority noted that the adjudication of Section 9 application would require the it to investigate the disputed facts between the parties. Ld. Counsel submits that the aforesaid finding is also erroneous and contrary to the material available on record. He submits that the Respondent Corporate Debtor itself admitted shipment of its consignment on Vessel MV Sun Lucia and further admitted liability towards freight charges arising from such shipment. Simultaneously, Jaldhi categorically denied before this Appellate Tribunal that it had received any freight charges from the Respondent, which denial stands recorded in the Order dated 05.02.2024 passed by this Hon’ble Tribunal. In such circumstances, there remained no disputed factual issue requiring adjudication by the Adjudicating Authority. The only issue before the Adjudicating Authority ought to have been whether the Respondent had discharged its admitted freight liability either towards the vessel owner or towards the Appellant who had chartered the vessel. Since no proof of payment was produced by the Respondent, the Appellant submits that there was no occasion for the Adjudicating Authority to dismiss the Section 9 Application on the ground that disputed facts required investigation.

Regarding the third finding of Ld. Adjudicating Authority relating to pre-existing dispute between the parties, Ld. Counsel submits that this finding is equally erroneous. It is submitted that there existed no dispute whatsoever between the Appellant and the Respondent prior to issuance of the Statutory Demand Notice. In fact, the Respondent itself had taken the stand before the Adjudicating Authority that there was no direct contractual relationship or privity between the Appellant and the Respondent. It is submitted that the alleged dispute was raised for the first time only in reply to the Statutory Demand Notice issued by the Appellant. Consequently, such dispute cannot be treated as a genuine pre-existing dispute within the meaning of the Code.

It is further submitted that during the course of hearing before this Appellate Tribunal, counsel appearing for the Respondent attempted to mislead the Tribunal by contending that the Respondent had already discharged its freight liability by making payment to Jaldhi and that the amount recovered by Jaldhi under the Settlement Agreement represented liability of the Appellant alone. Counsel for the Appellant submits that such submission is directly contrary to the Order dated 05.02.2024 passed by this Appellate Tribunal, wherein the Settlement Agreement was recorded and Jaldhi expressly denied receipt of any freight payment from the Respondent. The Appellant submits that the said Order also records acknowledgment by Jaldhi of receipt of USD 395,000 from the Appellant towards the balance freight payable by the Respondent. According to the Appellant, this clearly establishes that Jaldhi had received freight charges from the Appellant and had thereafter assigned the Respondent’s outstanding freight liability to the Appellant for recovery.

Ld. Counsel submits that the Respondent relied upon various documents filed by the Appellant in the present Appeal to contend that the Respondent had discharged its liability to Jaldhi and that the payment made by the Appellant pursuant to the Settlement Agreement represented only the Appellant’s independent liability. He submits that such contention is contrary to the categorical statement made by Jaldhi before this Appellate Tribunal on 02.02.2024 that it had not received any payment from Tulip Polychem Pvt. Ltd. The Appellant therefore submits that the Respondent cannot be permitted to raise submissions contrary to the admitted and recorded position before this Appellate Tribunal.

With regard to the contention of delay raised by the Respondent, Ld. Counsel submits that the Adjudicating Authority has not recorded any finding whatsoever on limitation or delay in the Impugned Order and, therefore, the said contention falls outside the scope of the present Appeal. Without prejudice to the aforesaid, counsel for the Appellant submits that the cause of action against the Respondent arose from the Settlement Agreement dated 02.02.2024 executed between Jaldhi and the Appellant, whereby Jaldhi categorically denied receipt of payment from the Respondent and assigned the Respondent’s debt to the Appellant so as to enable recovery of freight charges from the Respondent.

Ld. Counsel submits that this Appellate Tribunal, in “Siti Networks Limited v. Assets Care and Reconstruction Enterprises & Ors., Company Appeal (AT) (INS) No. 1449 of 2022” decided on 13.12.2022, has already held that under the IBC, assignment of debt by a Corporate Creditor is legally permissible and that the Assignee steps into the shoes of the original Corporate Creditor and is fully entitled to initiate CIRP proceedings against the Corporate Debtor.

In light of the aforesaid facts and circumstances, Ld. Counsel submits that the Adjudicating Authority committed grave error in dismissing the Section 9 Application filed by the Appellant despite the categorical denial by Jaldhi that it had received any freight charges from the Respondent, which fact already stands recorded by this Appellate Tribunal in its Order dated 05.02.2024. He submitted that by dismissing the Application, the Adjudicating Authority has effectively disregarded the binding effect of the Order passed by this Appellate Tribunal dated 05.02.2024. Concluding his submissions, Ld. Counsel prays allowing the appeal and setting aside the Impugned Order dated 19.12.2025.

Submissions of the Respondent

Ld. Counsel for the Respondent submitted that the present Appeal arises from the order dated 19.12.2025 passed by the Adjudicating Authority, in CP (IB) No. 277 of 2024, whereby the Section 9 Application filed by the Appellant, RKB Global Limited, against the Respondent, Tulip Polychem Pvt. Ltd., came to be dismissed. It was submitted that the dispute pertains to freight charges relating to a single voyage of MV Sun Lucia under a Charter Party dated 22.04.2019 executed between Jaldhi Overseas PTE LTD. (“Jaldhi”) and RKB Global Limited. The Respondent/Tulip Polychem Pvt. Ltd. was not a party to the Charter Party.

He submits that under the said voyage, Tulip shipped approximately 27,017 WMT of iron ore to its customer BST (HK) Limited, while RKB shipped approximately 27,500 WMT. Freight attributable to Tulip’s cargo was already paid in 2019 itself through BST (HK) Limited and Globechart. BST (HK) Limited, by email dated 16.06.2019, informed Jaldhi that Globechart had paid USD 470,000 on behalf of Tulip Polychem Pvt. Ltd. as freight. Globechart thereafter issued a declaration confirming payment of USD 470,575 towards freight, demurrage and anchorage charges on behalf of Tulip.

It is further submitted that Jaldhi’s own invoice dated 19.06.2019 raised upon RKB reflected total freight of USD 894,765.88 and specifically recorded “less received USD 470,575”, leaving a balance amount of USD 424,190.88 payable by RKB. Counsel submitted that this contemporaneous invoice itself demonstrated that freight attributable to Tulip’s cargo stood discharged in 2019 and the remaining liability was treated by Jaldhi as payable by RKB under the Charter Party.

Ld. Counsel submits that despite this position, the Appellant attempted to shift its own contractual liability upon Tulip after insolvency proceedings were initiated against Appellant by Jaldhi in CP No. 444/IBC/MB/2023. The said petition was admitted on 24.01.2024, following which Appellant filed Company Appeal (AT) (Ins.) No. 237 of 2024 before this Appellate Tribunal. During pendency of the Appeal, Appellant and Jaldhi entered into a Settlement Agreement dated 02.02.2024, under which Appellant agreed to pay USD 395,000 to Jaldhi. This Appellate Tribunal thereafter set aside the CIRP proceedings vide order dated 05.02.2024.

Ld. Counsel submits that only thereafter, on 06.02.2024, the Appellant for the first time raised debit notes upon Tulip for freight and demurrage/anchorage charges aggregating to Rs. 3,24,01,185/-, followed by letter dated 23.03.2024 and demand notice dated 06.05.2024. Tulip replied on 16.05.2024 clearly stating that freight and related charges had already been paid on its behalf through BST (HK) Limited and Globechart in 2019 itself.

He submits that the Respondent’s case is supported by three contemporaneous documents, namely: (i) the Globechart declaration confirming payment of USD 470,575 on behalf of Tulip; (ii) the email dated 16.06.2019 from BST (HK) Limited stating that Globechart had paid USD 470,000 on behalf of Tulip as freight; and (iii) the invoice dated 19.06.2019 issued by Jaldhi showing deduction of USD 470,575 from the total freight amount. These documents collectively establish that freight attributable to Tulip’s cargo stood discharged in 2019 itself.

Ld. Counsel further submits that the Appellant has alleged that the email dated 16.06.2019 relied upon by Tulip was fabricated and that the payment of USD 470,575 was actually made on behalf of the Appellant. However, he submitted that these allegations themselves demonstrate existence of a serious and substantial factual dispute.

It is his submission that the present dispute involves contested email trails, disputed SWIFT remittances, clarificatory emails, ledger entries and beneficiary details, all of which require detailed factual examination. The Adjudicating Authority itself observed in paragraph 20.9(E) of the Impugned Order that such disputed questions cannot be adjudicated within the summary jurisdiction under Section 9 of the Code. Therefore, no crystallised operational debt can be said to exist against the Respondent.

Ld. Counsel further submits that from 2019 till 2023, the Appellant never alleged that Tulip was liable for any freight amount. The alleged claim was raised for the first time only after the Settlement Agreement dated 02.02.2024 was executed between Appellant and Jaldhi. The first assertion of liability against Tulip appeared only through the debit notes dated 06.02.2024, the letter dated 23.03.2024 and the demand notice dated 06.05.2024. It is his submission that the Adjudicating Authority rightly characterised the present proceedings as a mischievous and belated attempt by the Appellant to shift its own liability arising out of the 2019 voyage after settling its own dispute with Jaldhi.

Ld. Counsel submits that there exists no clear or crystallised operational debt owed by Tulip. The contemporaneous invoice dated 19.06.2019 issued by Jaldhi itself deducted USD 470,575 as amount already received and treated only USD 424,190.88 as payable by RKB. The contemporaneous email correspondence of 2019, including the BST email dated 16.06.2019 and the Globechart declaration, clearly show that the payment was made on behalf of Tulip towards freight for its cargo.

He further submits that the Appellant is now attempting to shift this already deducted amount upon Tulip only after entering into settlement with Jaldhi on 02.02.2024. The Appellant’s present case is based upon disputed SWIFT remittances and ledger entries which neither clearly identify Jaldhi as beneficiary nor properly align with the voyage timeline. These documents cannot override the contemporaneous documents of 2019.

It is submitted that the Adjudicating Authority rightly concluded that the Appellant failed to establish existence of any clear and crystallised operational debt and that Tulip had raised a substantial and genuine defence which could not be treated as sham or illusory.

Ld. Counsel submits that Tulip, in its reply dated 16.05.2024 to the demand notice, clearly asserted that freight and related charges had already been paid to Jaldhi through BST/Globechart on Tulip’s behalf. In response, the Appellant merely alleged fabrication of the email dated 16.06.2019 and relied upon rival email chains, clarificatory emails and internally generated SWIFT and ledger entries to contend otherwise.

He further submits that these rival factual assertions create a serious and fact-intensive dispute requiring forensic examination of electronic and banking evidence, which falls completely outside the limited scope of Section 9 proceedings. Counsel relied upon the judgments of the Hon’ble Supreme Court in “Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd., (2018) 1 SCC 353”, “Kay Bouvet Engg. Ltd. v. Overseas Infrastructure Alliance (India) Pvt. Ltd. (2021) 10 SCC 483” and “Transmission Corporation of A.P. Ltd. v. Equipment Conductors and Cables Ltd. (2019) 12 SCC 697” to submit that where genuine disputes exist, the Insolvency and Bankruptcy Code cannot be used as a debt recovery mechanism and a Section 9 application must be rejected.

We have gone through the records of the case including the written submissions of the parties and heard the Counsel in details.

The principal issue which arises for consideration in the present Appeal is whether the Appellant has been able to establish the existence of a clear and undisputed operational debt and default against the Respondent under Section 9 of the Code.

At the outset, it is necessary to examine the nature of the transaction between the parties and the sequence of events which ultimately led to filing of the present proceedings. The material placed on record shows that the Appellant had entered into a Charter Party Agreement dated 22.04.2019 with Jaldhi Overseas Pte. Ltd. for chartering Vessel MV Sun Lucia for transportation of iron ore cargo from Redi Port in India to Rizhoa Port in China. The Appellant transported approximately 27,500 WMT of iron ore through the said vessel, whereas the Respondent transported approximately 27,017 WMT cargo through the same voyage.

The case of the Appellant is that since the Charter Party Agreement stood executed between the Appellant and Jaldhi, the entire freight liability initially rested upon the Appellant, and the Respondent was liable to reimburse the freight attributable to its cargo. The Appellant has further contended that Jaldhi raised invoices upon the Appellant for the freight charges and that the Appellant subsequently settled the liability with Jaldhi, including the portion attributable to the Respondent’s cargo.

However, when the documents placed on record are examined in detail, it becomes evident that the controversy between the parties is not a straightforward case of admitted operational debt. Rather, the dispute revolves around the core factual question as to whether the freight attributable to the Respondent’s cargo had already been discharged in the year 2019 itself through BST (HK) Limited and Globechart, or whether such liability ultimately remained unpaid and was later settled by the Appellant.

The Respondent has relied upon contemporaneous documents of the year 2019 to contend that freight charges attributable to its cargo had already been paid on its behalf. One such document is the email dated 16.06.2019 sent by BST wherein it was specifically stated that Globechart had paid USD 470,000 “on behalf of Tulip Polychem Pvt. Ltd. as freight.” The Respondent has pointed out that this email was marked to representatives of Jaldhi and that the contents of the email were never disputed at the relevant point of time. The Respondent has also relied upon a declaration issued by Globechart wherein it was stated that payment of USD 470,575 had been made to Jaldhi on authorization of Tulip Polychem Pvt. Ltd. towards freight, demurrage and anchorage costs for cargo shipped by the Respondent.

Both the Appellant and Respondent have relied upon the Invoice dated 19.06.2019 issued, by Jaldhi the same is extracted below:-

The aforesaid Invoice records total freight of USD 894,765.88 and simultaneously reflects deduction of USD 470,575 under the heading “less received”, leaving the balance amount payable by RKB Global Limited. The Respondent has relied upon this document to contend that the deduction corresponded to the payment already made on behalf of the Respondent and the same has been confirmed to the Jaldhi vide the email dated 16.06.2019 sent by BST wherein it was specifically stated that Globechart had paid USD 470,000 “on behalf of Tulip Polychem Pvt. Ltd. as freight.

At the same time, the Appellant has disputed the above interpretation entirely. According to the Appellant, the amount of USD 470,575 reflected as “less received” in the Invoice was not payment made on behalf of the Respondent, but rather payment made on behalf of the Appellant itself through BST/Globechart owing to prior commercial arrangements between those entities. The Appellant has also alleged that the email relied upon by the Respondent is fabricated and contrary to the genuine chain of communications between the parties.

Thus, at this stage itself, it becomes apparent that the dispute between the parties is founded upon rival interpretations of commercial transactions, disputed communications, disputed remittance details and disputed accounting treatment of payments allegedly made in the year 2019. The controversy is not confined merely to computation of liability but extends to the very existence of liability itself.

Further records show that a proceeding were initiated by Jaldhi Overseas Pte. Ltd. against the Appellant before the NCLT Mumbai in relation to outstanding freight liability under the Charter Party Agreement. Those proceedings ultimately led to a Settlement Agreement dated 02.02.2024 between the Appellant and Jaldhi during pendency of Company Appeal (AT) (Ins.) No. 237 of 2024 before this Appellate Tribunal.

In Clause 7 of the said Settlement Agreement, Jaldhi stated that it had not received payment from Tulip Polychem Pvt. Ltd. under the Charter Party and that the Appellant would be at liberty to recover freight, demurrage and anchorage charges from the Respondent. The Appellant has treated this clause as conclusive proof of the Respondent’s liability.

When the matter is examined carefully, it becomes clear that the Settlement Agreement itself cannot conclusively determine the liability of the Respondent under Section 9 proceedings. Firstly, we note that the Respondent was not a party to the Settlement Agreement. Secondly, the Settlement Agreement was executed nearly five years after the original transaction of 2019. Thirdly, even after execution of the Settlement Agreement, the rival parties continue to dispute the nature and purpose of the payments reflected in the records of 2019.

The Respondent has specifically contended that the Appellant raised debit notes and claims against the Respondent only after settlement of proceedings with Jaldhi in the year 2024. The Respondent has therefore alleged that the present claim is itself disputed and arose only after the Appellant settled its own liability with Jaldhi.

These circumstances show that the dispute between the parties was not created artificially as a mere defence to the Section 9 proceedings. The material on record demonstrates that the controversy relates to the underlying transaction itself and existed much prior to issuance of the demand notice.

The Appellant has also argued that the Respondent admitted liability by stating in its reply to the demand notice that freight charges had been paid to Jaldhi. However, the Respondent’s stand throughout has been that the freight liability stood discharged in 2019 itself through BST/Globechart on its behalf. Such a defence cannot be treated as admission of a subsisting operational debt. Rather, it reinforces the existence of a dispute regarding whether any amount remained payable at all.

The Appellant has relied upon the judgment of this Appellate Tribunal in “Siti Networks Limited v. Assets Care & Reconstruction Enterprises Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 1449 of 2022”, decided on 13.12.2022, to contend that an assignee of debt can initiate CIRP proceedings under the IBC. There is no dispute regarding the legal proposition laid down in the said judgment.

In the present matter, the core issue is not merely assignment of debt, but whether any undisputed and crystallized operational debt existed against the Respondent at all. The Respondent has consistently disputed its liability and has relied upon contemporaneous documents of 2019 to contend that freight charges had already been paid on its behalf through BST/Globechart. Further, the alleged assignment arises only from the Settlement Agreement dated 02.02.2024 between the Appellant and Jaldhi, to which the Respondent was not a party. Thus, unlike Siti Networks, the present case involves serious disputed questions regarding the very existence of debt itself. Therefore, the said judgment does not assist the Appellant in the facts of the present case.

The Learned Adjudicating Authority has taken note of the fact that adjudication of the claim would require detailed examination of disputed documents, emails, remittances, ledger accounts and communications exchanged between several entities involved in the transaction, including BST, Globechart and Jaldhi. The Learned NCLT also observed that the matter involved complicated questions regarding the actual nature of the payments and the person on whose behalf such payments were made.

In our considered view, the findings recorded by the Learned Adjudicating Authority are fully borne out from the record. The present dispute cannot be decided merely on the basis of isolated clauses or selective documents relied upon by either party. Determination of liability would necessarily require detailed evidentiary examination and adjudication of disputed facts, which falls outside the limited and summary jurisdiction exercised under Section 9 of the IBC.

The IBC is not intended to be used as a substitute for recovery proceedings in matters involving seriously disputed contractual claims. Once the material placed on record discloses existence of a genuine dispute requiring detailed investigation, the Adjudicating Authority is required to reject the Section 9 Application.

The Respondent has relied on several judgments in support of his submissions. He has cited the judgment of Hon’ble Supreme Court in “Mobilox Innovations Private Limited v. Kirusa Software Private Limited, (2018) 1 SCC 353”, which explains the scope of enquiry under Section 9 of the Code and held that where the Corporate Debtor raises a plausible contention requiring further investigation, and the dispute is not spurious, hypothetical or illusory, the Adjudicating Authority must reject the Section 9 Application. The Hon’ble Supreme Court clarified that the IBC is not intended to decide disputed contractual claims requiring detailed adjudication. In the present case, the Respondent has relied upon contemporaneous documents including emails, declarations and invoices of the year 2019 to contend that freight charges attributable to its cargo had already been paid through BST/Globechart. At the same time, the Appellant disputes the authenticity and interpretation of those documents. Thus, the dispute raised between the parties clearly requires detailed examination of facts and evidence, which cannot be undertaken in summary proceedings under Section 9 of the IBC.

Further the Hon’ble Supreme Court in “Kay Bouvet Engineering Ltd. v. Overseas Infrastructure Alliance (India) Private Limited, (2021) 10 SCC 483”, reiterated that insolvency proceedings cannot be used as a substitute for recovery proceedings in cases involving disputed claims. The Court observed that where complicated questions of fact arise requiring examination of evidence, the remedy under the IBC is not appropriate. In the present matter, the controversy involves disputed remittances, disputed email trails, rival interpretations of commercial records and conflicting stands regarding the actual nature of freight payments allegedly made in 2019. Such disputed issues necessarily require adjudication before a competent forum after detailed evidence is led by the parties.

Likewise, Hon’ble Supreme Court in “Transmission Corporation of Andhra Pradesh Limited v. Equipment Conductors and Cables Limited, (2019) 12 SCC 697”, emphasized that admission of an insolvency application is not automatic merely because a claim of default is asserted. The Adjudicating Authority must examine whether a real dispute exists between the parties. In the present case, the Respondent has consistently maintained that no subsisting liability exists since freight attributable to its cargo had already been discharged through BST/Globechart. The material placed on record therefore demonstrates existence of serious disputed questions of fact, rightly noticed by the Learned NCLT while dismissing the Section 9 Application.

In the present case, the defence raised by the Respondent cannot be said to be a sham or illusory defence unsupported by documents. On the contrary, the Respondent has relied upon contemporaneous emails, declarations and invoices of the year 2019 itself to support its stand that freight attributable to its cargo had already been paid. Whether those documents ultimately establish payment or not is a matter requiring adjudication before a competent forum after detailed evidence is led by the parties. Such exercise cannot be undertaken in insolvency proceedings.

After considering the entire factual matrix, the chronology of events, the contemporaneous documents placed on record, we are satisfied that the Learned Adjudicating Authority correctly held that the present matter involved serious disputed questions of fact and that the Appellant failed to establish existence of a clear and undisputed operational debt and default against the Respondent.

In view of the findings above, we do not find any infirmity in the impugned order. Appeal is accordingly dismissed. Pending IA’s, if any, are closed. No order as to costs.