[ By Bobby Anthony ]The National Company Law Appellate Tribunal (NCLAT) has set aside insolvency proceedings against e-commerce major Flipkart.CloudWalker, an operating creditor, which had imported and retailed LED TVs on Flipkart's platform, had dragged the electronic online retailer to the National Company Law Tribunal (NCLT) in 2019 regarding an alleged default of Rs 26.95 crore...
The National Company Law Appellate Tribunal (NCLAT) has set aside insolvency proceedings against e-commerce major Flipkart.
CloudWalker, an operating creditor, which had imported and retailed LED TVs on Flipkart's platform, had dragged the electronic online retailer to the National Company Law Tribunal (NCLT) in 2019 regarding an alleged default of Rs 26.95 crore towards procured imported television sets as per the supply agreement.
On October 24, 2019 the NCLT admitted CloudWalker’s application to initiate corporate insolvency resolution process (CIRP) against Flipkart, which moved the NCLAT.
The NCLAT’s three-judge bench said that operational creditor CloudWalker had failed to submit any documents to prove 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 documents referred in the application to be submitted in Form 5, under Section 9 of the Insolvency & Bankruptcy Code (IBC). The operational creditor has failed to submit the relevant documents under which the debt has become due,” the judgment stated.
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. Flipkart India Pvt Ltd is released from the 'Corporate Insolvency Resolution Process',” the NCLAT order stated.
In its response dated September 25, Flipkart denied CloudWalker’s allegations and stated that there is no admitted debt or liability since it had already paid an amount of Rs 85.57 crore towards invoices raised by Cloudwalker.
“The Corporate Debtor (Flipkart) is not liable to make any payment to the Operational Creditor,” Walmart-backed e-commerce major Flipkart stated in its response.