NCLAT: Section 9 IBC Petition Dismissed as Fabricated Invoices Stemmed from Matrimonial Dispute
Pranav B Prem
In a significant ruling, the National Company Law Appellate Tribunal (NCLAT), New Delhi, has held that a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC), cannot be admitted where the operational creditor has misused its control over the corporate debtor to fabricate documents and initiate proceedings for collateral reasons rooted in personal disputes. The bench, comprising Justice Ashok Bhushan (Judicial Member) and Mr. Arun Baroka (Technical Member), dismissed the appeal filed by Om Sai Moulds & Plastics and upheld the NCLT’s finding that the petition was an abuse of the insolvency process.
Background of the Dispute
Om Sai Moulds & Plastics (Operational Creditor) filed a Section 9 petition before the NCLT Mumbai, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Plastomax Engineering Pvt. Ltd. (Corporate Debtor) for alleged unpaid dues amounting to ₹1.27 crore, inclusive of interest. The claim was based on the supply of plastic injection moulds during 2021–2022, supported by invoices and delivery challans.
However, the NCLT rejected the petition, holding that the claim arose not from genuine operational debt but from personal disputes between Mr. Nilesh Dahanukar, a partner of the operational creditor, and his estranged wife, Mrs. Sheetal Dahanukar, director of the corporate debtor. It found that the litigation was a retaliatory step in an ongoing matrimonial discord and associated shareholder disputes, and imposed ₹10 lakh as costs on the petitioner.
Appellant's Arguments
In appeal, Om Sai contended that the NCLT erred in dismissing the petition by considering personal disputes, which are not recognized as “disputes” under Section 5(6) of the Code. It was argued that lifting the corporate veil to assess matrimonial or shareholder disputes was impermissible under the IBC. The appellant further argued that the delivery of goods was evidenced by e-way bills, invoices, and other documentation, and that no dispute was raised by the debtor at the time of delivery.
Allegations by the Respondent
Plastomax Engineering opposed the petition, stating that the invoices and e-way bills were fabricated, and that the documents were generated using the petitioner’s own systems due to their administrative control over the corporate debtor. The respondent pointed out that its registered email ID was created using the operational creditor’s domain, and that Mr. Nilesh Dahanukar was managing the debtor’s affairs, including maintaining records and signing on behalf of the company. It was also asserted that the invoices were created to harass Mrs. Sheetal Dahanukar during ongoing divorce and criminal proceedings. It was revealed that police complaints had been lodged regarding the misuse of digital signatures and generation of false documents.
Tribunal’s Analysis
The NCLAT observed that the corporate debtor's registered email was indeed created using the operational creditor’s domain, showing undue influence and control by Mr. Nilesh Dahanukar. The registered office of the corporate debtor was found to be the personal residence of Mr. Dahanukar, further reinforcing his managerial control.
Crucially, the tribunal noted that all the purchase orders forming the basis of the debt claim were signed by persons other than Mrs. Sheetal Dahanukar. Some of them were signed by Mr. Gaurang Ghodi, whose wife was a director in the debtor company. The documents submitted suggested a nexus between individuals from both companies, casting serious doubts on the legitimacy of the transactions.
The tribunal also relied on an order of the Additional Chief Judicial Magistrate, Nashik, dated 07.11.2022, which found sufficient grounds to proceed against Mr. Nilesh Dahanukar under Section 465 of the IPC (forgery), further lending weight to the respondent’s case that the insolvency petition was fraudulently motivated.
Verdict
The NCLAT concluded that the Section 9 petition was not filed for legitimate recovery of operational debt but to settle personal scores and misuse the provisions of the IBC. It held that such abuse of the insolvency process is impermissible and upheld the NCLT’s decision to dismiss the petition with costs. Accordingly, the appeal was dismissed.
Appearance
For Appellant: Mr. Vijay Nair, Mr. Arpit Dwivedi, Mr. Manmeet Nagpal, Ms. Sakshi Kapoor, Advocates.
For Respondent: -
Cause Title: Om Sai Moulds & Plactics V. Pllastomax Engineering Private Limited And Anr.
Case No: Company Appeal (AT) (Insolvency) No. 261 of 2025
Coram: Justice Ashok Bhushan [Chairperson], Arun Baroka [Member (Technical)]
[Read/Download order]
