2018 (12) TMI 1699

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....d Bankruptcy (Application to Adjudicating Authority) Rules, 2016 by M/s Bhandari Hosiery Exports Limited (for brevity 'Applicant') through its Managing Director, Mr. Nitin Bhandari with a prayer for initiation of Corporate Insolvency process against M/s In-Time Garments Private Limited (for brevity 'Corporate Debtor'). The board resolution authorizing Mr. Nitin Bhandari vide board meeting dated 14.11.2017, is annexed to the application. 2. The applicant M/s. Bhandari Hosiery Exports Limited, claimed to be the operational creditor, is a public limited and a listed company having its registered office at Bhandari House, village Meharban, Rahon Road, Ludhiana-141007, Punjab. 3. The respondent M/s. In-Time Garments Private Limited a corpo....

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....ates to Rs. 47,10,203/- as on 23.01.2018. The balance default amount thus aggregated to Rs. 17,42,195/- as on 23.01.2018. 7. The applicant has stated that the last supply to the CD was made on 11.11.2017 and the applicant received last payment from the CD on 05.12.2017. 8. The applicant had been following up with the CD for the balance amount payable both over mobile and message. Despite the repeated follow ups by the applicant, the CD failed and neglected to pay the applicant. 9. Therefore, the applicant issued a demand notice, dated 29.01.2018 under section 8 (1) of the Insolvency and Bankruptcy Code, 2016 on 29.01.2018 seeking repayment of unpaid amount of Rs. 17,42,195/-. The notice was duly served on the CD, who replied to the....

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....rom different lots of fabric delivered on 08.12.2017, rejected thrice shipment on the grounds of defective fabric because the product was not as per the specification of the buyer. The respondent contended that the CD had suffered huge monetary losses due to rejection from the Newtimes Group and also the reputation of CD was put on stake. 13. The Learned Counsel for the Respondent relied on the various orders of the NCLAT, which are as follows:  i.  In the order of the Hon'ble NCLAT in the Case of Philips India Limited Vs. Goodwill Hospital & Research Centre Limited, Company Appeal No. 14 of 2017; Philips India Limited Vs. Karina Healthcare Private Limited, Company Appeal No. 15 of 2017; Grasim Industries Limited Vs. S....

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....ed color standards of the fabric in the package. 15. The applicant also stated that the material was supplied as per the requirements and specifications of the CD. The applicant has made supply through different invoices till 14.10.2017 and the CD has returned certain material vide sales return in the WhatsApp message dated 04.11.2017, the CD informed and complained to applicant that the problem was not accepted.  But it was contended by the applicant that it is not a dispute but suggestion for correction relating to the supplies to be made in future. 16. Further, the applicant also contended that the applicant continued to supply material upto 11.11.2017 and also received payments from the CD upto 05.12.2017. The applicant also ....

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....application. It was further stated that there was no defect in the fabric but rather the holding back of payment was purely due to wrong intention of the CD. 19. The applicant stated that the materials supplied was in accordance with the quality and to the satisfaction of the CD. Further, it is denied that CD suffered any loss in consequence of fabric supplied by the applicant. Even otherwise, the CD never communicated of any such loss suffered before the issuance of demand notice to the applicant.   20. On hearing the Ld. Counsels of both the sides and on perusal of the record, it can be concluded as under: i. The record of the instant case reveals that the alleged liability has been disputed from time to time and ....

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....arranty." iii. It is no longer Res-Integra that the definitions of dispute is inclusive and not exhaustive.  Dispute has been given wide meaning so as to cover all disputes on debt, default etc. and not be limited to only pending suit or a record of a pending arbitration. iv. A dispute does truly exist between the parties in terms of section 5(6)(b) in the present case, which may or may not ultimately succeed but requires trial/investigation. On one hand the applicant has relied on invoices in support of its claim. On the other hand respondent has disputed the long-standing dispute of quality and non-performance of the complete contract till date on time. Though this is not the forum to examine and adjudicate as to wh....