# In the matter of Best Foods Limited CP (IB) No. 117-Chd-CHD-2017

> NCLT judgment dated 2018-02-02. Citation: TCN-2018-NCLT-01879. M/S Hajura Singh Bhim Singh, an operational creditor, filed a petition under Section 9 of the…

- **Court:** NCLT
- **Order date:** 2 Feb 2018
- **Citation:** TCN-2018-NCLT-01879
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/best-foods-limited-cp-ib-no-117-chd-chd-2017-3c8e8c3d

## Summary

### Background

M/S Hajura Singh Bhim Singh, an operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against M/S Best Foods Limited, a corporate debtor, for initiating the insolvency resolution process. The operational creditor claimed that the corporate debtor had defaulted on payments for the supply of paddy. The corporate debtor argued that there was a dispute regarding the quality of the paddy supplied and that the payments were made through Pacca Arthias. The petitioner is a commission agent who procures paddy from farmers. The respondent is engaged in the business of processing rice and purchases paddy from the Mandi through various Pacca Arthias.

## Facts

M/S Hajura Singh Bhim Singh, an operational creditor, filed a petition against M/S Best Foods Limited, a corporate debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016. The operational creditor claimed that the corporate debtor defaulted on payments for paddy supplied during the period from 21.11.2014 to 21.12.2014. The total quantity of paddy sold was 1683 quintals for a total price of ₹47,26,788.34. The corporate debtor made part payments of ₹39,52,749/-. The operational creditor also received ₹11,75,963/- towards interest. The corporate debtor issued Form VAT-D2 dated 22.06.2016 admitting the receipt of the paddy. The petitioner sent a demand notice dated 15.08.2017, followed by another demand notice dated 26.10.2017. The corporate debtor claimed a

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## Issues and analysis

### Issue 1: Whether the reply of the respondent-corporate debtor amounts to a dispute within the definition of …

**Ratio:** The term 'dispute' includes a suit or arbitration proceedings relating to the existence

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**Reasoning:** The court observed that the corporate debtor raised the issue of quality for the first

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**Interpretation:** The court interpreted the definition of 'dispute' under Section 5(6) of the

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**Application:** The court applied the definition of 'dispute' to the facts of the case and

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## Parties

- **Judges:** R.P.Nag…
- **Appellants:** M/s Hajura Singh…
- **Respondents:** M/s Best Foods…

## Timeline

- **2014-11-21 — Paddy Suppl…**: Paddy was supplied to the…
- **2014-12-21 — Paddy Supp…**: Paddy was supplied to the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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