NCLT Bengaluru Issues Notice To Flipkart On Insolvency Plea Alleging Rs 4.37 Crore Default

The National Company Law Tribunal (NCLT) at Bengaluru on Wednesday issued notice to Walmart-owned e-commerce company Flipkart Internet Pvt. Ltd. on an insolvency petition alleging a default of Rs 4.37 crore under the Insolvency and Bankruptcy Code, 2016.

The petition has been filed by Netambit Value First Services Pvt. Ltd., an operational creditor, under Section 9 of the Code.

A bench of Judicial Member Mahendra Khandelwal and Technical Member Ravindra Chaturvedi issued the notice after hearing counsel for the petitioner.

“Let notice be issued to the respondent corporate debtor for filing their response and appearance. Notice be served by all means and proof of service be filed. Petitioner may also file a revised affidavit in terms of Section 9(3)(b) of the IBC,” the bench said.

The matter was earlier referred to the NCLT President for the constitution of another bench after the Judicial Member recused himself, citing a family member's association with the petitioner company, following which the present bench took up the case.

Netambit has alleged that the operational debt arose from an affiliate marketing services contract between the parties.

According to the petition, the claim relates to 10 invoices raised pursuant to purchase orders issued by Flipkart under the contract. While several invoices were paid, the petitioner contended that amounts due under ten invoices remain unpaid.

Netambit further stated that a demand notice under Section 8 of the IBC had been issued prior to initiating the insolvency proceedings.

In a separate matter, the National Company Law Appellate Tribunal (NCLAT) in February 2020 had set aside an insolvency admission order against Flipkart in a petition filed by operational creditor Cloudwalker Streaming Technologies Pvt. Ltd.

The matter has been listed for further hearing on April 10.

For Petitioner: Advocates Krishan Malhotra and NPS Chawla