# In the matter of In-Time Garments Private Limited Company Petiiton No. (IB)-559(ND)-2018

> NCLT judgment dated 2018-12-04. Citation: TCN-2018-NCLT-00204. M/s Bhandari Hosiery Exports Limited filed an application under Section 9 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 4 Dec 2018
- **Citation:** TCN-2018-NCLT-00204
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/in-time-garments-private-limited-company-petiiton-no-ib-559nd-2018-74d14da9

## Summary

### Background

M/s Bhandari Hosiery Exports Limited filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against M/s In-Time Garments Private Limited, the Corporate Debtor. The applicant claimed to be an operational creditor, alleging that the corporate debtor defaulted on payments for knitted cloth and fabrics supplied. The corporate debtor, however, contended that the supplied fabrics were defective and not as per the required specifications, leading to a pre-existing dispute.

## Facts

M/s Bhandari Hosiery Exports Limited (Applicant) filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s In-Time Garments Private Limited (Corporate Debtor). The Applicant claimed that the Corporate Debtor defaulted on payments for knitted cloth and fabrics supplied, amounting to Rs. 17,42,195/- as of 23.01.2018. The Applicant stated that the last supply was made on 11.11.2017, and the last payment was received on 05.12.2017. The Corporate Debtor contended that the fabrics supplied were defective and not as per the required specifications. The Corporate Debtor claimed to have informed the Applicant about the defective fabrics via WhatsApp message dated 04.11.2017 and that their

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## Issues and analysis

### Issue 1: Whether a pre-existing dispute existed between the operational creditor and the corporate debtor …

**Ratio:** The ratio decidendi is that the existence of a genuine pre-existing dispute, as defined

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**Reasoning:** The court reasoned that the corporate debtor had raised concerns about the quality of the

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**Interpretation:** The interpretation of 'dispute' under Section 5(6) of the IBC is broad and

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**Application:** In this case, the court applied the ratio and reasoning to the specific facts

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## Parties

- **Judges:** DEEPTI M…
- **Appellants:** M/s Bhandari…
- **Respondents:** M/s. In-Time…

## Timeline

- **1999-01-04 — Incorporation of…**: M/s In-Time Garments Private Limited was…
- **2017-09-25 — Purchase Order by…**: Corporate Debtor issued…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8(1) — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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