The National Company Law Appellate Tribunal (NCLAT) has dismissed an order of the dedicated bankruptcy court initiating insolvency proceedings against ecommerce major Flipkart.
A three-member bench of the NCLAT has directed the interim resolution professional (IRP) appointed by the Bengaluru bench of the National Company Law Tribunal (NCLT) to hand over the records as well as the assets of the company back to its promoter immediately.
Cloudwalker Streaming Technologies Pvt Ltd, an operational creditor of Flipkart that used to supply the ecommerce major imported LED TVs, had filed a petition before NCLT contending that Flipkart defaulted for an amount of ?26.95 crore.
NCLT had issued its insolvency order against Flipkart on October 24, 2019. The ecommerce firm challenged it before the appellate tribunal.
NCLAT rejected the lower court order saying the demand notice delivered under Section 8(1) of the Insolvency & Bankruptcy Code (IBC) was “not proper and was also incomplete”.
“The operational creditor failed to submit any documents to prove in existence of the operational debt and the amount in default,” the appellate tribunal said in its order issued on February 24. It observed that Cloudwalker Streaming also failed to submit the copy of invoices and all the documents referred to in the application.
“Flipkart India Pvt Ltd (corporate debtor) is released from the corporate insolvency resolution process,” the appellate tribunal said.
Cloudwalker Streaming said Flipkart entered into a supply agreement for LED TVs on December 29, 2016.
Flipkart received delivery of the first few batches but after that it avoided taking delivery of the LED televisions on the ground of lack of warehouse space, it said.
It also alleged that Flipkart was putting pressure on Cloudwalker Streaming to offer the already imported and warehoused LED TVs, at a discounted price.
Challenging the order of NCLT, Flipkart contended that the order was passed without appreciating the fact that Cloudwalker Streaming has not produced any documentary evidence as purchase orders, acceptance letters, invoices and proof of any intimation of sale to the end customers or any post-delivery services with specific reference to the amounts.
Source: The Economic Times, February 28, 2020