Achenbach Buschhutten Gmbh & Co. KG v. Arcotech Ltd.

INSOLVENCY AND BANRKRUPTCY CODE, 2016

--Corporate insolvency--Petition against non payment of debtRaised bona fide disputes--Whether insolvency resolution process initiated--Where petition was filed for initiation of corporate insolvency resolution process, in which corporate debtor had raised bone fide dispute in its reply, the petition was rejected due to deficiency of accounts, operation creditor had not complied with the mandatory requirement of section 9(3)(c) and there being bona fide dispute raised by corporate debtor.--Operational creditor company was engaged in supply of rolling mills. Subsequently, corporate debtor approached the operational creditor and they entered into a sale and purchase agreement. Operational creditor had sent the mill to the corporate debtor, but payment was not made. After issuing statutory notice, operational creditor filed petition under section 9. Corporate debtor contended that operational creditor had failed to deliver the goods within time and due to which it suffered huge loss and consignment was dispatched without verification of corporate debtor. Held: Corporate debtor had raised many serious issues, which amount to raising of dispute as intended by the Legislature in the definition of section 5(6) of the Code. There was a bona fide dispute raised by the corporate debtor in reply to the notice of operational creditor. Further, due to deficiency in accounts of the operational creditor, mandatory requirement of section 9(3)(c) was not complied with. Hence, petition was rejected.