Cryptic and unreasoned orders rejecting Section 9 petitions without evaluating evidence of pre-existing disputes are unsustainable.

The Appellant (Operational Creditor), a supplier of hydrocarbon oil, entered into business with the Respondent (Corporate Debtor) in January 2022 on a 'Bill to Ship' basis.

Between December 13 and 18, 2022, the Appellant raised invoices totaling ₹17,732,898/-, which remained unpaid.

The Appellant issued a Section 8 demand notice on August 17, 2023.

The Respondent replied on August 29, 2023, alleging that the goods were sub-standard, caused machine failures, and that these issues were communicated via WhatsApp and lab reports as early as November 1, 2022.

The NCLT Ahmedabad (Adjudicating Authority) dismissed the Section 9 petition on November 8, 2024, holding that a pre-existing dispute regarding quality existed.

The Appellant challenged this order, asserting it was cryptic, unreasoned, and based on factually incorrect findings regarding credit/debit notes.

1. Whether the Adjudicating Authority committed a manifest illegality by passing a cryptic and unreasoned order.

2. Whether there existed a "pre-existing dispute" regarding the quality of goods sufficient to reject an application under Section 9 of the IBC.

Section 9 of the Insolvency and Bankruptcy Code, 2016, which governs the initiation of the Corporate Insolvency Resolution Process (CIRP) by an operational creditor and requires the absence of a pre-existing dispute.

The principle that an Adjudicating Authority must pass reasoned orders and considered the standard for "pre-existing dispute" as established in Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd.

Section 65B of the Information and Technology Act regarding the admissibility of electronic evidence (WhatsApp chats).

The Appellate Tribunal expressed dissatisfaction with the NCLT’s order, characterizing it as "cryptic" for failing to provide detailed reasoning beyond a single summary paragraph.

In reviewing the merits, the Tribunal noted that while the Respondent provided WhatsApp screenshots from November and December 2022 indicating complaints about sub-standard goods and machine damage, the Appellant did not specifically deny the authenticity of these chats, only claiming they were "selective".

The Tribunal observed that a debit note from a third party (Hiltop) corroborated claims of sub-standard supply.

However, the Tribunal found that critical evidence, such as the actual lab test reports and a specific communication dated August 14, 2023, mentioned in the NCLT order, were missing from the appellate record.

Consequently, the Tribunal determined that the lack of a reasoned order and the absence of key documents necessitated a fresh adjudication.

The matter was remanded to the Adjudicating Authority (NCLT Ahmedabad) to pass a fresh, reasoned order after providing both parties an opportunity to be heard.

The Section 9 petition (CP (IB) 252 of 2023) was revived, and the parties were directed to appear before the NCLT on April 22, 2026.

No order was made as to costs.