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National Company Law Appellate Tribunal Decisions in March 2026: Case Law Digest

Read 100 LawLens analyses of National Company Law Appellate Tribunal decisions published in March 2026, covering key rulings, legal principles and case law.

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March 2026 Decisions

100 ARTICLES · NEWEST FIRST
### Reconciliation Requests and Contractual Default Clauses Establish Pre-Existing Disputes Barring Section 9 IBC Proceedings 1. Facts * Operational Debt: The Appellant (Operational Creditor), a partnership firm, executed wind energy projects for the Respondent (Corporate Debtor) under an MOU and various work orders. * The Claim: The Appellant claimed an outstanding debt of approx. ₹25.72 Crores (plus interest) based on 75 invoices raised between 2018 and 2019. * The Defense: The Respondent contended that there were pre-existing disputes regarding delays, liquidated damages (LD) paid to third parties, and tax issues. They further argued that the Section 9 petition was premature based on a contract clause (Clause 38) stating "default" only occurs 365 days after the due date. * Adjudicating Authority (AA): The NCLT Ahmedabad rejected the petition, citing pre-existing disputes evidenced by emails and the lack of a specific "date of default." 2. Issues * Whether there was a "pre-existing dispute" between the parties prior to the issuance of the Section 8 demand notice. * Whether a communication for "reconciliation" constitutes evidence of a dispute under the Insolvency and Bankruptcy Code (IBC). * Whether the Section 9 application was maintainable given the contractual definition of "default." 3. Decision * Pre-existing Dispute: The NCLAT affirmed that numerous emails exchanged between August 2018 and December 2018 (prior to the July 2019 demand notice) regarding invoice discrepancies and delay-linked losses established a "plausible contention" of dispute. * Reconciliation as Dispute: Relying on the Supreme Court’s ruling in *Sabarmati Gas Ltd. vs. Shah Alloys Ltd.*, the Tribunal held that requests for account reconciliation to adjust outstanding items (such as LD and generation losses) indicate a pre-existing dispute. * Prematurity of Default: The Tribunal noted that Clause 38 of the work order specifically defined "default" as expiring 365 days after the due date. Since the demand notice was issued before this period lapsed for several invoices, it was deemed premature. * Ongoing Arbitration: The fact that the parties were already in arbitration (where the Appellant’s counter-claim for the same amount had been rejected) further supported the existence of a substantial, non-spurious dispute. 4. Conclusion The Appellate Tribunal upheld the NCLT's dismissal, concluding that the dispute was not a "moonshine" defense but a genuine, pre-existing disagreement documented through correspondence. Section 9 proceedings cannot be used as a substitute for debt recovery when accounts remain unreconciled and subject to contractual LD claims.. M/s. Sri Bajrang Wind Park Developers v. M/s Inox Wind Infrastructure Services Limited & Ors. [Company Appeal (AT) (Insolvency) No. 630 of 2024]. NCLAT. LawLens

NCLAT·

Insolvency and Bankruptcy LawArbitration and Mediation

### Reconciliation Requests and Contractual Default Clauses Establish Pre-Existing Disputes Barring Section 9 IBC Proceedings 1. Facts * Operational Debt: The Appellant (Operational Creditor), a partnership firm, executed wind energy projects for the Respondent (Corporate Debtor) under an MOU and various work orders. * The Claim: The Appellant claimed an outstanding debt of approx. ₹25.72 Crores (plus interest) based on 75 invoices raised between 2018 and 2019. * The Defense: The Respondent contended that there were pre-existing disputes regarding delays, liquidated damages (LD) paid to third parties, and tax issues. They further argued that the Section 9 petition was premature based on a contract clause (Clause 38) stating "default" only occurs 365 days after the due date. * Adjudicating Authority (AA): The NCLT Ahmedabad rejected the petition, citing pre-existing disputes evidenced by emails and the lack of a specific "date of default." 2. Issues * Whether there was a "pre-existing dispute" between the parties prior to the issuance of the Section 8 demand notice. * Whether a communication for "reconciliation" constitutes evidence of a dispute under the Insolvency and Bankruptcy Code (IBC). * Whether the Section 9 application was maintainable given the contractual definition of "default." 3. Decision * Pre-existing Dispute: The NCLAT affirmed that numerous emails exchanged between August 2018 and December 2018 (prior to the July 2019 demand notice) regarding invoice discrepancies and delay-linked losses established a "plausible contention" of dispute. * Reconciliation as Dispute: Relying on the Supreme Court’s ruling in *Sabarmati Gas Ltd. vs. Shah Alloys Ltd.*, the Tribunal held that requests for account reconciliation to adjust outstanding items (such as LD and generation losses) indicate a pre-existing dispute. * Prematurity of Default: The Tribunal noted that Clause 38 of the work order specifically defined "default" as expiring 365 days after the due date. Since the demand notice was issued before this period lapsed for several invoices, it was deemed premature. * Ongoing Arbitration: The fact that the parties were already in arbitration (where the Appellant’s counter-claim for the same amount had been rejected) further supported the existence of a substantial, non-spurious dispute. 4. Conclusion The Appellate Tribunal upheld the NCLT's dismissal, concluding that the dispute was not a "moonshine" defense but a genuine, pre-existing disagreement documented through correspondence. Section 9 proceedings cannot be used as a substitute for debt recovery when accounts remain unreconciled and subject to contractual LD claims.

The Appellant (Operational Creditor), a partnership firm, was engaged by the Respondent (Corporate Debtor) for wind energy projects in Gujarat and Maharashtra.

2 MIN READ

### Reconciliation Requests and Contractual Default Windows Constitute Pre-Existing Dispute Barring Section 9 Proceedings Key Legal Takeaways: * Pre-Existing Dispute: Persistent requests for account reconciliation, disputes over invoice discrepancies, and potential Liquidated Damages (LD) claims via email correspondence prior to a Section 8 demand notice constitute a "plausible contention" of a pre-existing dispute under the *Mobilox* standard. * Premature Default: If the contract stipulates that "default" only occurs after a specific period (e.g., 365 days) from the due date, a Section 9 application filed before the expiry of such period is premature and maintainable. * Nature of Reconciliation: Following the *Sabarmati Gas* precedent, the need for "reconciliation"—defined as an adjustment of amounts to reach an agreement—indicates a lack of consensus on the debt, thereby establishing a legal dispute that necessitates investigation beyond summary insolvency proceedings.. M/s. Sri Bajrang Wind Park Developers v. M/s Inox Wind Infrastructure Services Limited & Ors. Company Appeal (AT) (Insolvency) No. 630 of 2024.. NCLAT. LawLens

NCLAT·

Insolvency and Bankruptcy LawArbitration and Mediation

### Reconciliation Requests and Contractual Default Windows Constitute Pre-Existing Dispute Barring Section 9 Proceedings Key Legal Takeaways: * Pre-Existing Dispute: Persistent requests for account reconciliation, disputes over invoice discrepancies, and potential Liquidated Damages (LD) claims via email correspondence prior to a Section 8 demand notice constitute a "plausible contention" of a pre-existing dispute under the *Mobilox* standard. * Premature Default: If the contract stipulates that "default" only occurs after a specific period (e.g., 365 days) from the due date, a Section 9 application filed before the expiry of such period is premature and maintainable. * Nature of Reconciliation: Following the *Sabarmati Gas* precedent, the need for "reconciliation"—defined as an adjustment of amounts to reach an agreement—indicates a lack of consensus on the debt, thereby establishing a legal dispute that necessitates investigation beyond summary insolvency proceedings.

The Appellant (Operational Creditor), a partnership firm, was engaged by the Respondent (Corporate Debtor) for wind energy projects.

2 MIN READ