Saturday 29 February 2020

NCLAT sets aside insolvency proceeding against Flipkart

NCLAT sets aside insolvency proceeding against FlipkartNew Delhi : The National Company Law Appellate Tribunal (NCLAT) on Monday set aside the insolvency proceedings against e-commerce major Flipkart.

CloudWalker, an operating creditor, which imported and retailed LED TVs on Flipkart's platform, dragged the company to the NCLT last year over alleged default of Rs 26.95 crore towards procured imported televisions as per the supply agreement. On October 24, the tribunal admitted the its application for initiation of corporate insolvency resolution process (CIRP) against Flipkart, which moved the NCLAT.

The three judge NCLAT bench said that the the operational creditor failed to submit any documents to prove in existence of the operational debt and the amount in default.

"The operational creditor also failed to submit the copy of invoices and copies of all the documents referred in the application to be submitted in Form 5, under Section 9 of the Code (IBC). The operational creditor has failed to submit the relevant documents under which the debt has become due," said the judgement.

Further, the NCLAT noted that CloudWalker Streaming Technologies only filed the copy of the 'Supply Agreement', and the projections email, "which by themselves can by no stretch of the imagination constitute proof of debt".

"We set aside the impugned order dated 24th October 2019 passed by the Adjudicating Authority (NCLT) and the application filed under Section 9 by the Operational Creditor Cloudwalker Streaming Technologies Pvt Ltd., company petition -- CP (IB)260/BB/2019 -- is rejected. The Flipkart India Pvt Ltd is released from the 'Corporate Insolvency Resolution Process'," it said.

Flipkart, in its response dated September 25, has denied the allegations and said that there is no admitted debt or liability as it had already paid an amount of Rs 85.57 crore towards the invoices raised by Cloudwalker.

"The Corporate Debtor (Flipkart) is not liable to make any payment to the Operational Creditor," said the Walmart-backed e-commerce major in its response.

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