The Tax Publishers 2019 TaxPub(CL) 0248 (NCLT-Kol) : (2019) 212 CompCas 0473

 

Gandher Oil Refinery (India) Ltd. v. Sapphire Equities (P) Ltd.

 

INSOLVENCY AND BANKRUPTCY CODE, 2016

--Initiation of corporate insolvency resolution process by operational creditor --Application against non-payment of supplied coalPre-existence of dispute regarding poor quality of goods supplied--Non serving of demand notice under section 8 to corporate debtor--Where operational creditor filed an application under section 9 against corporate debtor for non-payment of supplied coal, but the operational creditor had not served demand notice under section 8 to the corporate debtor and there was also pre-existing dispute regarding poor quality of goods supplied by the operational creditor, therefore, the application was not maintainable. --Operational creditor supplied steam coal to corporate debtor. The corporate debtor committed default in payment of outstanding dues. Therefore, the operational creditor filed an application under section 9 against the corporate debtor. The corporate debtor raised objection that there was pre-existence of dispute, as goods supplied by the operational creditor were of poor quality. Further that, the operational creditor had not served demand notice under section 8 to the corporate debtor. Held: The operational creditor failed in proving that the demand notice had been delivered to the corporate debtor. Further that, the corporate debtor succeeded in establishing existence of a dispute between the corporate debtor and the operational creditor regarding the quality of the goods and regarding the amount liable to be paid. Therefore, there was a genuine pre-existing dispute between the parties. Thus, the application was not maintainable.

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