TMI Blog2018 (12) TMI 1699X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 ) read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 by M/s Bhandari Hosiery Exports Limited (for brevity Applicant ) through its Managing Director, Mr. Nitin Bhandari with a prayer for initiation of Corporate Insolvency process against M/s In-Time Garments Private Limited (for brevity Corporate Debtor ). The board resolution authorizing Mr. Nitin Bhandari vide board meeting dated 14.11.2017, is annexed to the application. 2. The applicant M/s. Bhandari Hosiery Exports Limited, claimed to be the operational creditor, is a public limited and a listed company having its registered office at Bhandari House, village Meharban, Rahon Road, Ludhiana-141007, Punjab. 3. The respondent M/s. In-Time Garments Private Limited a corporate debtor against whom initiation of corporate insolvency resolution process has been prayed for, is a company incorporated on 4th January, 1999 under the Companies Act, 1956 having its registered office at House No. 1107, Gali No. 10 Govind Puri, Kalakaji New Delhi and having CIN U18101DL1999PTC097778. 4. The Authorised share capital of the Corporate Debtor is ₹ 28,20,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid defective fabric, the CD immediately brought into the notice of the applicant about the defective fabric. The CD had sent WhatsApp message dated 04.11.2017 to the applicant mentioning that the defective fabric is not acceptable. 11. The Respondent further contended that even after being informed about defective fabric, the applicant continued to supply the defective fabric to the CD. That on repeated complaints by the CD, the applicant had sent an official to inspect the fabric at the CD s factory and he had also verified that the supplied fabric was defective. After various attempts for justification/replacement of the fabric, the applicant had assured that the CD may proceed with the manufacturing of the garments with the fabric and the final product would be as per the requirements and specifications. 12. That the CD had manufactured the garments after the assurance of the quality goods supplied by the applicant, but the buyer of the CD namely, Newtimes Group upon the inspection of the final garments from different lots of fabric delivered on 08.12.2017, rejected thrice shipment on the grounds of defective fabric because the product was not as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e WhatsApp message dated 04.11.2017, the CD informed and complained to applicant that the problem was not accepted. But it was contended by the applicant that it is not a dispute but suggestion for correction relating to the supplies to be made in future. 16. Further, the applicant also contended that the applicant continued to supply material upto 11.11.2017 and also received payments from the CD upto 05.12.2017. The applicant also stated that there were five dispatches/supply invoices from 25.10.2017 to 11.11.2017 and at that time, the CD had not raised any issue relating to the quality of fabrics supplied in relation to subsequent dispatches. The CD was avoiding payment by making lame excuses. 17. The applicant also contends that if the supply of material was continued to be defective, then the CD would have raised his objection or returned the material. The CD has not attached any proof of correspondences regarding its official communicating the defect in the material supplied. It is also categorically denied that the representatives of applicant had verified fabrics supplied by it and if had it been so, then the CD would have attached the proof of such ver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debtor to rectify the defects in the fabrics. There is thus force in the contention of respondent that there is established and long-standing dispute between the parties much prior to the initiation of the present proceedings under the code. ii. Dispute has been defined under the code in section 5 (6) which envisages that: Dispute includes a suit or arbitration proceedings relating to (a) the existence of the amount of debt; (b) the quality of goods or service; or (c) the breach of a representation or warranty. iii. It is no longer Res-Integra that the definitions of dispute is inclusive and not exhaustive. Dispute has been given wide meaning so as to cover all disputes on debt, default etc. and not be limited to only pending suit or a record of a pending arbitration. iv. A dispute does truly exist between the parties in terms of section 5(6)(b) in the present case, which may or may not ultimately succeed but requires trial/investigation. On one hand the applicant has relied on invoices in support of its claim. On the other hand respondent has disputed the long-standing dispute of quality and non-performa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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