NCLAT upholds insolvency of Shri Paramsukh Edible Foods over unpaid supplier dues
The NCLAT dismissed an appeal by a former director and upheld the NCLT Indore order admitting Shri Paramsukh Edible Foods into insolvency on a mustard-seed supplier's claim.
Key points
- The NCLAT held on 14 October 2026 that the NCLT Indore rightly admitted Shri Paramsukh Edible Foods into insolvency.
- Per the order, the company's own ledger showed Rs 1,29,33,407 outstanding to the supplier, above the threshold under the Code.
- The NCLAT held that a wrong PIN code on invoices did not disprove supply when TDS and GST input tax credit records showed it.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, on 14 October 2026 dismissed an appeal by a former director of Shri Paramsukh Edible Foods Pvt Ltd. The appeal challenged an order of 11 September 2025 by the National Company Law Tribunal (NCLT), Indore, which admitted the company into the corporate insolvency resolution process on the application of a supplier, Mohini Food Product. The supplier had claimed Rs 1,42,46,178 for mustard seeds, plus interest.
What Happened
Per the order, the supplier raised 8 invoices between 5 August 2021 and 31 August 2021 and filed its application under Section 9 of the Insolvency and Bankruptcy Code, the route used by operational creditors such as suppliers, on 20 July 2023. The former director argued that the goods were never supplied, because the invoices and e-way bills carried a wrong PIN code, and that there was no written agreement.
The NCLAT rejected this. It noted that the company had deducted TDS on the purchases under Section 194Q of the Income Tax Act and had claimed GST input tax credit on the same 8 invoices. The tribunal held that these records showed the goods were supplied and received, and that a difference in the PIN code alone could not lead to the conclusion that nothing was supplied. It also noted that the director accepted that the company had no other office or godown and never raised a query about non-delivery.
On the amount, the NCLAT said the company's own ledger showed Rs 1,29,33,407 outstanding on the date of the application, above the threshold in Section 4 of the Code. It held that the NCLT rightly declined a request for reconciliation, and that the admission was in accordance with law.
What It Means
For suppliers owed money by a company, the ruling shows that the buyer's own tax records, such as TDS deducted on a purchase and GST input tax credit claimed on an invoice, can be treated as proof that goods were delivered. A minor error in an address may not defeat a claim when such records exist.
The NCLT's admission order therefore stands. The NCLAT's order may be appealed to the Supreme Court.
Source: NCLAT order
Sources & Citations
- NCLAT order — National Company Law Appellate Tribunal