NCLT Bengaluru Admits Insolvency Plea Against Camson Seeds: Absence of Dispute Record Validates Operational Creditor’s Claim
Pranav B Prem
In a recent judgment delivered on April 9, 2025, the National Company Law Tribunal (NCLT), Bengaluru Bench, comprising Hon'ble Shri Sunil Kumar Aggarwal (Judicial Member) and Hon'ble Shri Radhakrishna Sreepada (Technical Member), admitted a petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016. The petition was filed by Pan Oceanic Seed Solutions Private Limited (Operational Creditor) against Camson Seeds Limited (Corporate Debtor), alleging default in payment of operational debt amounting to ₹1,08,09,250.
Background
The dispute arose from the supply of biotechnology agricultural products by the Operational Creditor to the Corporate Debtor, against multiple purchase orders issued in 2017 and 2018. The Operational Creditor supplied various seeds including Watermelon, Ridge Gourd, Chilly, Okra, Tomato, Bitter Gourd, and Bottle Gourd. Despite raising invoices amounting to ₹1,20,11,800, only partial payments totaling ₹12,02,550 were received. A credit note of ₹1,03,000 was also issued after the Corporate Debtor requested return of unordered goods.
The Corporate Debtor repeatedly acknowledged the dues in various written communications from 2018 to 2022. A final demand notice was issued in August 2023, to which the Corporate Debtor failed to respond. The Operational Creditor also submitted a banker’s certificate and statement of account confirming non-receipt of the outstanding balance.
Corporate Debtor’s Response
In its statement of objections, the Corporate Debtor contended that the letters relied upon by the Operational Creditor were not unequivocal admissions of liability. It argued that such letters were issued under commercial pressure and meant for business continuity rather than legal acknowledgment of debt. The Corporate Debtor also cited financial distress, particularly due to the COVID-19 pandemic, as the reason for non-payment and maintained that reconciliation of accounts was still ongoing. The Corporate Debtor emphasized that the application was premature and that partial payments demonstrated its intention to resolve the matter.
Findings and Observations
The Tribunal observed that the goods were indeed supplied by the Operational Creditor, and the Corporate Debtor had failed to pay the outstanding amount despite repeated reminders and written acknowledgments. The Tribunal specifically noted the letters of acknowledgment dated 20.12.2018, 10.02.2019, 10.11.2020, 22.03.2021, and 28.01.2022.
Importantly, the NCLT addressed the issue of limitation in light of these acknowledgments and held that the acknowledgment dated 28.01.2022 was valid for the purpose of Section 18 of the Limitation Act, 1963. The Tribunal relied on the Supreme Court’s judgment in Dena Bank vs. C. Shivakumar Reddy & Anr. [(2021) SCC Online SC 543], stating that acknowledgment of debt in writing within the limitation period extends the limitation.
Additionally, the Tribunal referred to the landmark judgment in Mobilox Innovations Private Limited v. Kirusa Software Private Limited [(2017) ibclaw.in 01 SC], reiterating: “If there is no record of dispute in the information utility, nor any documents submitted to show any dispute, it cannot be held that there is a pre-existing dispute.”
The Tribunal found that no such record or documentation showing pre-existing dispute had been submitted by the Corporate Debtor. Moreover, in its own reply, the Corporate Debtor had admitted and accepted the liability due to the Operational Creditor. The NCLT held: “The Corporate Debtor has admitted that there is a debt and obligation to pay. The reasons for inability to pay including recovery of pending payments cannot be a valid ground for non-payment of debt and obligation to pay.”
Admission of Petition and Appointment of IRP
Accordingly, the Tribunal admitted the petition and initiated the Corporate Insolvency Resolution Process (CIRP) against Camson Seeds Limited. It declared a moratorium in terms of Section 14 of the IBC and imposed prohibitions on institution or continuation of legal proceedings, transfer or alienation of assets, and recovery actions against the Corporate Debtor during the moratorium period.
Mr. Ramanathan Bhuvaneshwari (IBBI/IPA-002/IP-N00306/2017-18/10864) was appointed as the Interim Resolution Professional (IRP) to conduct the CIRP. The Operational Creditor was directed to deposit ₹2,00,000 for expenses, subject to approval by the Committee of Creditors.
Cause Title: Pan Oceanic Seed Solutions Private Limited V. Camson Seeds Limited
Case No: CP (IB) No. 163/BB/2024
Coram: Hon’ble Shri Sunil Kumar Aggarwal [Member (Judicial)], Hon’ble Shri Radhakrishna Sreepada [Member (Technical)]
[Read/Download order]
