Fettech Commercial Enterprises Pvt Ltd’s Application Under IBC Section 9 Approved; Moratorium Imposed
In a significant ruling, the Ahmedabad Bench of the National Company Law Tribunal (NCLT) has admitted Mercury Trade Links Ltd into the Corporate Insolvency Resolution Process (CIRP) following a petition by Fettech Commercial Enterprises Pvt Ltd. The decision, delivered on September 1, 2026, was presided over by Mrs. Chitra Hankare, Member (Judicial), and Dr. V. G. Venkata Chalapathy, Member (Technical).
The case, filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, involves an operational debt of Rs. 2.7 crore owed by Mercury Trade Links Ltd to Fettech Commercial Enterprises Pvt Ltd. The petitioner, an operational creditor in this context, had supplied agricultural products to Mercury Trade Links Ltd, maintaining a running account. Despite the supply and receipt of goods, a significant portion of the debt remained unpaid.
Mercury Trade Links Ltd, represented by Mr. Harmish Shah, attempted to dispute the claim, citing pre-existing disagreements over the quality of goods and delayed supply. However, the tribunal found no substantial evidence supporting these claims. The respondent's failure to provide documentary proof of any pre-existing disputes, despite asserting the issuance of credit notes, weakened its defense.
The tribunal noted that the demand notice was duly served on November 15, 2025, with no valid response or payment forthcoming from the corporate debtor. Consequently, the tribunal determined the existence of an operational debt and a default, justifying the commencement of CIRP.
Upon admitting the application, the NCLT imposed a moratorium under Section 14 of the IBC. This halts all pending or future legal proceedings against the corporate debtor, securing its assets while the insolvency resolution process is underway. The tribunal appointed Mr. Manish Kumar Bhagat as the Interim Resolution Professional (IRP) to manage the debtor's assets and operations and to oversee the CIRP proceedings.
The tribunal's decision underscores the stringent adherence to the IBC provisions, emphasizing the importance of maintaining transparent and documented business transactions. The ruling not only highlights the NCLT's decisive role in resolving corporate insolvency but also underscores the rigorous standards required to dispute operational debts within the framework of the IBC.
Bottom Line:
Insolvency and Bankruptcy Code, 2016 Section 9 Application for initiation of Corporate Insolvency Resolution Process (CIRP) - Operational debt of Rs. 2.7 crore established - Absence of any documentary evidence of pre-existing disputes by the Corporate Debtor - Application allowed, and Corporate Debtor admitted into CIRP.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 - Sections 9, 14, 17, 18, 20, 21
