# In the matter of Kamal Sponge Steel and Power Limited

> NCLT judgment dated 2025-06-04. Citation: TCN-2025-NCLT-00934. M/s Mahakaleshwar Mines & Metal Pvt. Ltd. filed a petition under Section 9 of the Insolvency…

- **Court:** NCLT
- **Order date:** 4 Jun 2025
- **Citation:** TCN-2025-NCLT-00934
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-jaipur/kamal-sponge-steel-and-power-limited-796f0356

## Summary

### Background

M/s Mahakaleshwar Mines & Metal Pvt. Ltd. filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against M/s Kamal Sponge Steel & Power Ltd. seeking initiation of Corporate Insolvency Resolution Process (CIRP). The Operational Creditor and Corporate Debtor entered into an agreement for the sale of goods on 01.03.2016, where the Operational Creditor agreed to buy 2600 MT of Sponge Iron from the Corporate Debtor, making an advance payment of Rs. 1,70,00,000/- by 14.06.2016.

## Facts

An agreement for the sale of goods was entered into on 01.03.2016 between M/s Mahakaleshwar Mines & Metal Pvt. Ltd. (Operational Creditor/Petitioner) and M/s Kamal Sponge Steel & Power Ltd. (Corporate Debtor/Respondent).

The Operational Creditor agreed to purchase 2600 MT of Sponge Iron from the Corporate Debtor.

The Operational Creditor made an advance payment of Rs. 1,70,00,000/- by 14.06.2016, representing 50% of the total sale consideration.

The Corporate Debtor failed to supply the goods as per the agreement.

The Operational Creditor sent various reminders to the Corporate Debtor seeking a refund of the advance payment.

The Corporate Debtor acknowledged the debt in letters dated 02.06.2016, 20.10.2016, 15.11.2017, 02.11.2019, 27.02.2021, and 25.04.2023.

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## Issues and analysis

### Issue 1: Whether the petition filed under Section 9 …

**Ratio:** Section 18 of the Limitation Act provides that where acknowledgment in writing of the

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**Reasoning:** The Corporate Debtor argued that the petition was time-barred as the advance payment was

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**Interpretation:** The court relied on the Supreme Court's decision in Laxmi Pat Surana Vs Union

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**Application:** The court found that the Corporate Debtor had acknowledged its liability in

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## Parties

- **Judges:** Reeta K…; Kavita Bha…
- **Appellants:** M/s Mahakaleshwar…
- **Respondents:** M/s Kamal Sponge…
- **Other parties:** Pawan Kumar…
- **Advocates:** Tarun Ag…; Swadeep Sin…; +4 more

## Timeline

- **2016-03-01 — Agreement…**: Agreement for sale of goods between…
- **2016-06-14 — Advance P…**: Operational Creditor paid Rs.…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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