# In the matter of Umachi Foods and Commodities Pvt. Ltd. Company Petition No. IB-1422-ND-2018

> NCLT judgment dated 2019-08-19. Citation: TCN-2019-NCLT-01936. The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, read…

- **Court:** NCLT
- **Order date:** 19 Aug 2019
- **Citation:** TCN-2019-NCLT-01936
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/umachi-foods-and-commodities-pvt-ltd-company-petition-no-ib-1422-nd-2018-07b7bd4b

## Summary

### Background

The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, by M/s Ganesh Rice & General Industries (Operational Creditor) through its authorized representative Mr. Amolak Ram, seeking to initiate the Corporate Insolvency process against M/s Umachi Foods and Commodities Pvt. Ltd. (Corporate Debtor). The Operational Creditor claimed that the Corporate Debtor approached them for the purchase of Basmati Sella Rice, with an oral agreement for timely payment upon receipt of goods and raising of invoices. The Operational Creditor supplied the goods and raised invoices, which were received and acknowledged by the Corporate Debtor. Despite

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## Facts

M/s Ganesh Rice & General Industries (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Umachi Foods and Commodities Pvt. Ltd. (Corporate Debtor). The Operational Creditor claimed that the Corporate Debtor approached them for the purchase of Basmati Sella Rice, with an oral agreement for timely payment upon receipt of goods and raising of invoices. The Operational Creditor supplied the goods as per the orders placed by the Corporate Debtor and raised invoices, which were duly received and acknowledged by the Corporate Debtor. Despite various requests and reminders, the Corporate Debtor failed to pay the outstanding dues of Rs.

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## Issues and analysis

### Issue 1: Whether there was a pre-existing dispute between the Operational Creditor and the Corporate Debtor …

**Ratio:** A pre-existing dispute is a dispute raised before the demand notice or invoices are

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**Reasoning:** The NCLT reasoned that the Corporate Debtor's reply to the demand notice, disputing the

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**Interpretation:** The interpretation of 'pre-existing dispute' is crucial in determining the

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**Application:** In this case, the Corporate Debtor's claim of non-supply of goods was raised

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## Parties

- **Judges:** DEEPTI M…; Pradeep R.…
- **Appellants:** M/s GANESH RICE &…
- **Respondents:** M/s. Umachi Foods…
- **Advocates:** Sameer…; A.K. G…

## Timeline

- **2018-07-27 — Demand Notice…**: The Operational Creditor sent a demand notice to the Corporate Debtor under Section 8 of…
- **2018-06-23 — Cheque Prese…**: The security cheque issued by the Corporate…

## 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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