# In the matter of In-Time Garments Pvt. Ltd. CP No. (IB)-559-(ND)-2018

> NCLT judgment dated 2018-12-04. Citation: TCN-2018-NCLT-00196. The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 4 Dec 2018
- **Citation:** TCN-2018-NCLT-00196
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/in-time-garments-pvt-ltd-cp-no-ib-559-nd-2018-a3b43bce

## Summary

### Background

The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by M/s Bhandari Hosiery Exports Limited (the Applicant) against M/s In-Time Garments Private Limited (the Corporate Debtor) for initiation of the Corporate Insolvency Resolution Process (CIRP). 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, raised a dispute regarding the quality of the supplied fabrics, claiming they were defective and not as per the required specifications.

## Facts

M/s Bhandari Hosiery Exports Limited (Applicant) filed a petition against M/s In-Time Garments Private Limited (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, claiming unpaid dues for supplied knitted cloth and fabrics. The applicant claimed that the corporate debtor owed Rs. 17,42,195/- as of 23.01.2018. The corporate debtor argued that the supplied fabrics were defective and not as per specifications, leading to rejection by their buyer, Newtimes Group, and causing them monetary losses. The corporate debtor claimed to have informed the applicant about the defective fabric via WhatsApp message dated 04.11.2017. The applicant continued to supply material until 11.11.2017 and received payments until 05.12.2017. The corporate debtor placed

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## Issues and analysis

### Issue 1: Whether a pre-existing dispute exists between the applicant and the corporate debtor regarding the …

**Ratio:** The existence of a 'dispute' as defined under Section 5(6) of the IBC, which includes

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**Reasoning:** The court reasoned that the corporate debtor had raised the issue of defective fabric

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**Interpretation:** Section 5(6) of the IBC defines 'dispute' broadly to include disputes relating

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**Application:** In this case, the court applied the ratio to the facts and found that the

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## Parties

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

## Timeline

- **1999-01-04 — Corporate Debtor…**: M/s In-Time Garments Private Limited…
- **2017-04-11 — WhatsApp M…**: Corporate Debtor sent a WhatsApp message to the applicant mentioning that the defective…

## 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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