Atlantis Agritech Private Limited v. M/s Kendriya Bhandar and Another

What happened

The petitioner, a manufacturer of agricultural machinery, is a supplier under the MSMED Act and supplied goods to respondent 1 under orders from August 2019 to June 2020. After conciliation, the Facilitation Council passed an award on 10 June 2024 for ₹41,86,98,166 in principal with interest and additional interest, ₹74,62,22,812 as on 9 December 2024. The Commercial Court at Hyderabad allowed CEP No. 29 of 2024 on 1 April 2025 and directed respondent 1 to file an affidavit in Form 16A of Appendix E of the CPC with particulars of its assets. Respondent 1 filed an affidavit of disclosure on 10 July 2025, which the petitioner said was vague, and the petitioner filed CEA No. 135 of 2025 under Order XXI Rule 41(2) for a fresh affidavit and documents. By the order of 16 June 2026 the Commercial Court refused prayer (ii), for all receivables due from various projects across India with copies of contracts, purchase orders and invoices. Annexure-2 to the affidavit listed departments, items, contract value on a back-to-back basis and a margin percentage. Respondent 1 argued that its section 47 application, filed on 25 June 2026 and numbered on 8 July 2026, was pending, that the petitioner may not be a medium enterprise, that it had disclosed assets above the award, and that it was a no-profit no-loss entity living on commissions.

Questions before the court

• Can the award-debtor delay disclosure of assets by relying on a pending section 47 application, and was its affidavit sufficient?

Why the court ruled this way

Order XXI Rule 41(2) lets the court require a judgment-debtor to file an affidavit of assets where a money decree remains unsatisfied for thirty days, and Form 16A requires particulars including debts due to the debtor (paragraphs 8 to 10). Annexure-2 gave only percentages of margin and no amounts due from the named entities, which did not satisfy the Form and explained the petitioner's second application (paragraphs 14 and 18). The award-debtor showed no statutory basis for delaying disclosure pending a section 47 application, which was filed after the disclosure application and the impugned order, and nothing stops the Commercial Court from deciding it in due course (paragraphs 19 to 21). The attempt to put disclosure on the back burner was stark given the continued resistance to depositing 75% of the awarded amount under section 19 of the MSMED Act, which Tirupati Steels v. Shubh Industrial Components says cannot be bypassed beyond permitting instalments on proof of hardship (paragraph 22). Section 19 bars a court from entertaining a challenge unless 75% has been deposited, and a section 47 application is similar to a challenge to the decree and not independent of section 19 (paragraphs 23 to 25). None of the cases cited, including Electrosteel Steel v. Ispat Carrier, addressed whether a section 47 application exempts the debtor from section 19 (paragraphs 27 and 31). The Commercial Court failed to give reasons for refusing prayer (ii) (paragraph 33).

Controlling point

The Commercial Court erred in refusing disclosure of receivables, and the section 47 application was no ground to delay.

Order and next steps

The Civil Revision Petition was allowed. The impugned order was set aside and respondent 1 was directed to file a fresh affidavit of disclosure of assets disclosing all receivables, including specific amounts due from continuing and completed projects across India, in terms of prayer (ii) of CEA No. 135 of 2025, within three weeks of receiving the order.

Practical implications

An MSME award-holder facing a defending buyer should seek a Form 16A affidavit with specific amounts of receivables, and point out that a section 47 application does not excuse the 75% deposit.

Limits of this ruling

• The Court did not decide whether the petitioner is a medium or micro enterprise or the section 47 objections, which the Commercial Court may decide in due course.