Fairmacs Shipping & Transport Services (P) Ltd. v. Mrunmaha Agro Foods (P) Ltd.

INSOLVENCY & BANKRUPTCY CODE, 2016

--Initiation of corporate insolvency resolution process by operational creditor --Petition against non-payment of rendering services for exporting of goodsPre-existence of dispute in respect of quality of goods or service --No dispute raised by corporate debtor prior to issuance of demand notice under section 8 --When no dispute in respect of quality of goods or service was raised by corporate debtor before issuance of demand notice under section 8, then, the dispute was not covered under meaning of existence of dispute, the corporate debtor had committed default in making payment in respect of services for exporting of goods to the operational creditor, therefore, petition under section 9 was admitted against the corporate debtor. --Corporate debtor exported various goods through operational creditor. The operational creditor rendered services for exporting their shipments and raised invoices upon the corporate debtor for making payment of the same, but the corporate debtor committed default in payment of debts. Therefore, the operational creditor filed petition under section 9. The corporate debtor raised objections that it had caused heavy losses due to deficiency in services, as there was delay in delivery of documents like Bills of Lading. Therefore, there was pre-existing dispute between the parties. Held: There was no dispute in respect of the quality of goods or service before issuance of demand notice under section 8. Therefore, the dispute which had been raised after receiving the demand notice was not covered under the meaning of existence of dispute. Therefore, argument of the corporate debtor that the dispute was pre-existence in respect to the services provided by the operational creditor was not sustainable. It appeared from the record that the corporate debtor having defaulted in making payment to the operational creditor. Thus, the petition was admitted.