FTF Pharma CIRP closed after prior invoice disputes found

FTF Pharma Private Limited’s corporate insolvency resolution process (CIRP), admitted on 09.09.2026, was closed after the appellate tribunal found plausible pre-existing disputes over all three invoices before the 22.10.2024 demand notice, ending the Section 14 moratorium and immediately restoring board and management powers.

Why did FTF Pharma’s CIRP close?

FTF Pharma’s CIRP closed because the appellate tribunal held that the Section 9 insolvency application should have been rejected where a plausible dispute existed before the 22.10.2024 demand notice. It set aside the National Company Law Tribunal, Ahmedabad order dated 09.09.2026, which had admitted the operational creditor’s application and appointed an interim resolution professional (IRP).

The tribunal found that every one of the three invoices was disputed through correspondence and under the Technology Transfer Agreement (TTA). It concluded that no part of the claim was both undisputed and above the Rs 1 crore threshold considered in the original order. On that basis, the application had to be rejected under Section 9(5)(ii)(d) of the Insolvency and Bankruptcy Code, 2016.

The tribunal said the earlier order had applied the wrong test by assessing whether the disputes were sufficiently “significant” or “convincing.” The relevant Section 9 test was whether a dispute was plausible and not spurious, hypothetical or illusory. The tribunal also held that the earlier order had improperly considered the merits by describing the debt as “proved.”

The order stressed that CIRP admission has immediate consequences, including displacement of management, the Section 14 moratorium on legal proceedings and control by an insolvency professional. It said those consequences could not continue where documents showed a good-faith dispute before the demand notice. The tribunal therefore ordered the CIRP and all actions flowing from the 09.09.2026 admission to cease.

What invoice disputes did FTF Pharma raise?

FTF Pharma raised objections through emails dated from 21.07.2023 to 09.08.2024, all sent before the 22.10.2024 demand notice. The tribunal said the 21.07.2023 and 26.12.2023 emails disputed the first invoice by name and number, while the 26.12.2023, 17.01.2024, 06.08.2024 and 09.08.2024 messages questioned performance supporting the milestone invoices.

The disputes concerned whether contractual conditions for payment under the TTA had been met. The tribunal recorded references to six-month data that had not been received, out-of-specification (OOS) results and provisions governing third-party procurement. It held that these issues concerned whether the claimed payment debt existed, rather than merely whether there had been a delay.

A 26.12.2023 email offering to consider payment after product approval did not amount to an admission of liability, the tribunal found. The same email said testing was the operational creditor’s responsibility and stated that six-month data had not been received. The tribunal held that an offer to settle, tied to a future event and accompanied by stated grievances, showed that there was a matter to settle rather than an undisputed debt.

FTF Pharma was not required to have filed a suit or commenced arbitration before the demand notice to establish a dispute, according to the order. The tribunal said a dispute could exist even if the escalation mechanism in Clause 9.1 of the TTA had not been used. Earlier written correspondence was sufficient for the limited Section 9 inquiry.

How did the tribunal assess FTF Pharma’s Section 9 case?

The National Company Law Appellate Tribunal held that Section 9 does not permit an adjudicating authority to decide whose contractual case is more persuasive once a plausible pre-existing dispute is shown. It said the original order erred by relying on the lack of liquidated damages for delay under the TTA and by determining that the debt had been established.

The tribunal distinguished a delay-related damages claim from FTF Pharma’s actual position that milestone payment conditions had not been satisfied. Whether the TTA contained a liquidated-damages clause did not decide whether the second and third milestone invoices had become payable. The original order had treated those two invoices as exceeding Rs 1 crore even if testing charges were disputed, but the appellate tribunal found that they too were contested.

The order referred to Supreme Court rulings including Mobilox, S.S. Engineers, Rajratan and GLS Films. The tribunal said those decisions require consideration of whether a real dispute existed before the demand notice, not whether the debtor’s defence is likely to succeed. Questions requiring evidence, cross-examination and contract interpretation could instead be addressed through civil proceedings or arbitration.

Immacule Lifesciences Private Limited, the original Section 9 applicant, filed an affidavit in response to an order dated 22.09.2026. It stated that all disputes and claims between the parties had been resolved in full and that it had no objection to suitable disposal of the appeal. The tribunal recorded that there was effectively no contesting respondent, while separately holding that the original application was legally liable to be rejected.

What must FTF Pharma do after CIRP closure?

FTF Pharma must take back control of its assets, books, records and documents immediately after the CIRP closure order. The tribunal discharged Mr Sunil Kumar Kedia as IRP and directed him to hand over all material in his possession to FTF Pharma’s board without delay. The company’s board and management regained their powers with immediate effect.

FTF Pharma must pay the IRP’s fees and actual out-of-pocket expenses, supported by vouchers, for the period from 09.09.2026 until the judgment date. The order gives FTF Pharma 15 days from the judgment date to make that payment. It does not disclose the IRP’s fee amount or the value of the supported expenses.

The earlier order had directed the operational creditor to pay Rs 2 lakh to the IRP. If that amount was paid, it must be adjusted against the IRP’s dues, and FTF Pharma must reimburse the operational creditor by the same 15-day deadline. The tribunal made no order as to costs and closed any pending interlocutory applications.

The closure order does not determine the contractual merits of the three invoices or disclose any settlement payment between the parties. Its finding is limited to the inappropriateness of CIRP under Section 9 where the record showed a prior dispute. The affidavit records a full resolution of claims, but the judgment provides no settlement terms, payment amount or implementation schedule beyond the 15-day IRP payment process.

Conclusion

The combined effect of the ruling is that FTF Pharma exits a CIRP that began on 09.09.2026 because the tribunal found documentary disputes over all three invoices before the 22.10.2024 demand notice. The order separates a contested contractual claim from the insolvency process, finding that no undisputed debt above Rs 1 crore supported admission under Section 9.

The next disclosed milestone is the 15-day period from the judgment date for the IRP’s fees, voucher-supported expenses and, if applicable, reimbursement of the Rs 2 lakh paid by the operational creditor. The source records that Immacule Lifesciences said all claims were resolved, but does not disclose the settlement terms or any further arbitration or court timetable.