# Button Industries Pvt Ltd vs. Viaz Tyres Limited

> NCLT judgment dated 2026-09-24. Citation: TCN-2026-NCLT-01180. Button Industries Pvt Ltd (Financial Creditor) filed a Section 7 IBC petition against Viaz…

- **Court:** NCLT
- **Order date:** 24 Sept 2026
- **Citation:** TCN-2026-NCLT-01180
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-ahmedabad/viaz-tyres-limited-kd2zm

## Summary

### Background

Button Industries Pvt Ltd (Financial Creditor) filed a Section 7 IBC petition against Viaz Tyres Limited (Corporate Debtor) for an alleged financial debt of Rs. 2,94,43,614.63/-. The debt originated from an advance for Basmati Rice, later converted into a loan through two Memoranda of Understanding (MOUs) with stipulated interest and repayment dates, which the Corporate Debtor failed to honor.

## Facts

Button Industries Pvt Ltd (Petitioner/Financial Creditor) filed a petition under Section 7 of the IBC against Viaz Tyres Limited (Respondent/Corporate Debtor).

The petitioner advanced Rs. 1,16,05,384/- to the corporate debtor for the supply of Basmati Rice under 5 invoices dated 22.03.2020.

This advance was converted into a loan via a 1st Memorandum of Understanding (MOU) dated 12.04.2022, with a repayment deadline of 12.04.2023 and 18% interest on default.

The Corporate Debtor sought and obtained an extension for repayment until 30.04.2024, agreeing to 18% interest on the principal amount.

A 2nd MOU dated 02.07.2024 was executed, where the Corporate Debtor again acknowledged liability and agreed to repay the principal plus 18% interest by 02.01.2025.

…

## Issues and analysis

### Issue 1: Whether the debt claimed by Button Industries Private Limited against Viaz Tyres Limited …

**Ratio:** A debt arising from an advance for goods, later converted into a loan via MOUs, does not

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**Reasoning:** The Tribunal found that the underlying transaction was for invoices against another

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**Interpretation:** Section 5(8) of the IBC requires a "disbursal against the consideration

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**Application:** In this case, the advance was for Basmati Rice, which is an operational

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## Parties

- **Judges:** Chitra Ha…; Velamur G Venkata…
- **Appellants:** Button Industries…; Button Industries…
- **Respondents:** Viaz Tyres…
- **Other parties:** Committee of…; Directors of Viaz…; +3 more
- **Advocates:** Ravi P…; Devashish K…

## Timeline

- **2020-03-22 — Invoices…**: 5 invoices for the supply of…
- **2022-04-12 — 1st Memorandum of…**: The advance payment was converted into a loan advance, and the 1st MOU was executed, with…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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