WhatsApp Conversations Establish Pre-Existing Dispute, Render Section 9 Application Non-Maintainable: NCLAT Delhi
Case Overview
Case Name: Straw Commodities LLP Vs Anram Agro Trading Pvt. Ltd. (NCLAT Delhi)
Appeal Number: Company Appeal (AT) (Insolvency) No. 2292 of 2024
Date of Order: 16/12/2024
Forum: National Company Law Appellate Tribunal, Delhi
Background and Contractual Arrangement
The present appeal arose from an order dated 25.10.2024 passed by the National Company Law Tribunal, by which an application filed by the Operational Creditor under Section 9 of the Insolvency and Bankruptcy Code, 2016 was rejected. The application sought initiation of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor in connection with an alleged operational debt amounting to ₹1,01,89,178.77.
The dispute between the parties had its roots in three sale contracts executed for the supply of agricultural commodities:
- Contract No. S00128/2021-2022 (dated 21.04.2021) — for delivery of 440 MT of Tanzania Origin Soya Bean, New Crop 2021, NON-GMO, valued at Rs. 2,64,00,000/-
- Contract No. S00128A (Extension of Contract 1) — for delivery of 228 MT of Tanzania Origin Soya Bean, New Crop 2021, NON-GMO, valued at Rs. 13,66,622.40/-
- Contract No. S00131 (dated 19.11.2021) — for sale of 64.46 MTs of Ethiopian Origin Soya Bean Meal Non-GMO @ Rs. 60,000 per MT
- Contract No. S00141/2021-2022 (dated 14.02.2022) — for 440 MT of Ethiopian Origin Soya Bean, New Crop 2022 Non-GMO @ USD 860 per MT
Position of the Operational Creditor
The Operational Creditor (Appellant) contended that despite having made advance payments against these contracts, the Corporate Debtor failed to deliver the contracted quantities of goods within the stipulated timelines. The following table, as reproduced from the memo of appeal, captures the outstanding amounts claimed:
| S. No. | Sale Contract No. | Quantity Ordered (MT) | Quantity Delivered (MT) | Advance Payment Made (Rs.) | Outstanding Balance (Rs.) |
|---|---|---|---|---|---|
| 1. | S00128 (Sale Contract I) | 440 MT | 211.40 MT | Rs. 1,43,18,022 | Rs. 4,65,296.77 |
| 2. | S00128A (Sale Contract I-A) | 228.60 MT | Not delivered | Rs. 84,15,000 | — |
| 3. | S00131 (Sale Contract II) | 64.46 MT | 64.64 MT | Rs. 43,55,766 (settled against advance for Contract I-A) | Rs. 40,59,234 |
| 4. | S00141 (Sale Contract III) | 440 MT | Not delivered | Rs. 56,64,648 | Rs. 56,64,648 |
| Total | Rs. 1,01,89,178.77 |
Following the alleged failure of delivery, the Appellant issued a demand notice dated 18.09.2023 under Section 8 of the Insolvency and Bankruptcy Code, 2016, calling upon the Corporate Debtor to discharge the outstanding debt. When no reply was forthcoming, the Appellant proceeded to file an application under Section 9 of the Code.
Position of the Corporate Debtor
The Corporate Debtor (Respondent) presented a diametrically opposite version of events. It submitted that the agricultural commodities had indeed been imported and were ready for delivery. However, it was the Operational Creditor who had repeatedly failed to take delivery of the goods, despite being requested to do so through verbal communications, email correspondence, and WhatsApp messages. The Corporate Debtor relied heavily on these WhatsApp conversations to establish that the Operational Creditor's own conduct — driven by adverse market conditions — was the actual cause of the dispute.
NCLT's Findings: Role of WhatsApp Conversations
The NCLT undertook a detailed examination of the WhatsApp chat records exchanged between the parties. The Tribunal extracted and analyzed several key communications that painted a clear picture of the actual circumstances surrounding the dispute.
The NCLT, in its impugned order, made the following observations, which were reproduced and affirmed by NCLAT: