Tribunal rejects respondent's defense citing third-party bankruptcy, orders appointment of Interim Resolution Professional to manage CIRP
In a significant ruling dated September 9, 2026, the National Company Law Tribunal (NCLT), Ahmedabad Bench, has admitted the Corporate Insolvency Resolution Process (CIRP) petition filed by Immacule Lifesciences Private Limited against FTF Pharma Private Limited for non-payment of dues amounting to over Rs. 2.18 crore under a Technology Transfer Agreement.
The dispute arose from a contractual agreement wherein FTF Pharma was to transfer pharmaceutical manufacturing technology to Immacule Lifesciences, enabling the latter to produce submission batches related to ANDA filings. While the first milestone payment was duly settled, the petitioner claimed that the respondent failed to pay for the second and third milestones despite the petitioner fulfilling its obligations.
FTF Pharma contended that the project was put on hold due to the bankruptcy of Akorn Pharmaceuticals, a third-party involved with the respondent, and also raised issues regarding delayed and incomplete submission of stability data by the petitioner. However, the Tribunal clarified that such external bankruptcy proceedings and unrelated third-party agreements do not absolve the respondent's liability under the bilateral contract with the petitioner.
The Tribunal emphasized that to deny initiation of CIRP under Section 9 of the Insolvency and Bankruptcy Code, 2016, any pre-existing disputes must be significant and genuine. The respondent failed to demonstrate such a dispute sufficiently, and the outstanding debt exceeded the statutory threshold of Rs. 1 crore.
Consequently, the Tribunal allowed the petition and ordered the commencement of CIRP against FTF Pharma. It imposed a moratorium under Section 14 of the Code, prohibiting any recovery actions against the corporate debtor during the resolution period. Further, the Tribunal appointed Mr. Sunil Kumar Kedia as the Interim Resolution Professional (IRP) to take charge of the debtor's assets and manage its operations as a going concern.
The petitioner was directed to pay Rs. 2,00,000 towards interim costs for the CIRP process. The IRP is tasked with making a public announcement inviting claims and ensuring compliance with the Code's provisions. The order also mandates the Registrar of Companies to update the master data accordingly.
This judgment reiterates the principle that insolvency proceedings under the IBC cannot be stalled by disputes unrelated to the contractual obligations between the operational creditor and the corporate debtor. It affirms that contractual obligations under bipartite agreements must be honored regardless of external factors, thereby strengthening the efficacy of the IBC framework in resolving insolvencies swiftly.
Bottom Line:
Insolvency and Bankruptcy Code, 2016 - Section 9 - Corporate Insolvency Resolution Process (CIRP) - Pre-existing disputes must be significant and genuine to deny initiation of CIRP - Defense based on unrelated third-party agreements or bankruptcy of unrelated entities cannot be used to deny liability under a bi-partite agreement.
Statutory provision(s):
Insolvency and Bankruptcy Code, 2016 - Sections 9, 13, 14, 15, 17, 18, 20, 21, 33
