Bhandari Hosiery Exports Ltd. & Ors vs In-Time Garments Pvt. Ltd. & Ors

M/s. Bhandari Hosiery Exports Ltd. & Ors. ...Appellants

Versus

M/s. In-Time Garments Pvt. Ltd. & Ors. ...Respondents

Present:

For Appellant : Mr. S.P. Sharma, Advocate

For Respondent : Mr. Rakesh Kumar, Mr. Aashish Khattar and Mrs. Chetna Bisht, Advocates

ORDER

01.03.2019 This appeal has been preferred by M/s. Bhandari Hosiery

Exports Limited & Ors. (Operational Creditors) against the order dated 4th

December, 2018 passed by the Adjudicating Authority (National Company Law

Tribunal), New Delhi (Court No. IV) rejecting the application filed under Section

9 of the Insolvency and Bankruptcy Code, 2016 (for short, 'the I&B Code'). The

appeal has been preferred after delay of 12 days. However being satisfied with

the grounds, the delay of 12 days in preferring the appeal is condoned.

2. From the record and the impugned order we find that the demand Notice

under Section 8(1) was issued on 29th January, 2018 but much prior to the same

by WhatsApp message dated 4th December, 2017, the respondent 'M/s. In-Time

Garments Private Limited' (Corporate Debtor) intimated the appellants that the

fabrics were defective and, therefore, they are not acceptable. -2-

3. We find that there is a pre-existing dispute due to which the application

under Section 9 of the I&B Code was not accepted.

4. Learned counsel appearing on behalf of the appellants submits that the

respondent committed fraud which vitiates the impugned order dated 4th

December, 2018. According to him, the respondent wrongly stated that the

defective fabrics were returned by courier which is not the fact. However, such

issue cannot be decided by the Adjudicating Authority as the question of return

of fabrics is subsequent to that of the pre-existing dispute communicated by

WhatsApp message on 4th November, 2017. Such being the position, the

Adjudicating Authority having noticed the pre-existing dispute rightly rejected

the application under Section 9 of the I&B Code. However, we make it clear that

the Adjudicating Authority has not decided nor we have gone into the question

whether while returning the fabric fraud is committed or not, which will be

decided by the Court of competent jurisdiction.

The appeal is dismissed. No cost.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice Bansi Lal Bhat ] Member (Judicial)

/ns/gc/ Company Appeal (AT) (Insolvency) No. 143 of 2019