# In the matter of Gaurik Fashions Private Limited Company Petition No. (IB)-287(ND)-2021

> NCLT judgment dated 2022-07-21. Citation: TCN-2022-NCLT-01609. M/s. Major Brands (India) Private Limited, an operational creditor, filed a petition under…

- **Court:** NCLT
- **Order date:** 21 Jul 2022
- **Citation:** TCN-2022-NCLT-01609
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/gaurik-fashions-private-limited-company-petition-no-ib-287nd-2021-dfbb1193

## Summary

### Background

M/s. Major Brands (India) Private Limited, an operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Gaurik Fashions Private Limited, the corporate debtor. The operational creditor claimed that the corporate debtor defaulted in making payments for stocks, rentals, and secondary sales. The corporate debtor argued that a pre-existing dispute existed between the parties regarding the amount of debt, non-fulfillment of promises, and breach of covenants of term sheets.

## Facts

M/s. Major Brands (India) Private Limited (Operational Creditor) filed a petition against M/s. Gaurik Fashions Private Limited (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Operational Creditor claimed that the Corporate Debtor defaulted on payments for stocks, rentals, and secondary sales amounting to INR 2,06,29,997/- as of December 31, 2019, plus interest. The Corporate Debtor argued that a pre-existing dispute existed, citing email correspondence and replies to legal notices. The Operational Creditor supplied stocks to the Corporate Debtor for stores in Elante Mall (Chandigarh) and Pavilion Mall (Ludhiana) under term sheets dated September 2, 2017. The terms included outright sales with 100% stock correction, subject to Sale or

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## Issues and analysis

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

**Ratio:** The principle that a pre-existing dispute, which may be a ground to thwart an application

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**Reasoning:** The court found that the respondent corporate debtor had raised a dispute with sufficient

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**Interpretation:** The existence of a 'dispute' is defined as a conflict or controversy; a

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**Application:** In the instant case, the court found sufficient evidence on record to exhibit a

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## Parties

- **Judges:** DHARMINDER…; BINOD KUMAR…
- **Appellants:** M/s. Major Brands…
- **Respondents:** M/s. Gaurik…

## Timeline

- **2017-09-02 — Term Sheets E…**: Two term sheets were executed between the applicant and the respondent corporate debtor,…
- **2019-01-08 — Last Payment…**: The last payment which was received by the applicant was on January 08,2019 for both the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60 — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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