# In the matter of Jindal Poly Films Ltd.

> NCLT judgment dated 2023-12-14. Citation: TCN-2023-NCLT-00251. The case involves an application under Section 9 of the Insolvency & Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 14 Dec 2023
- **Citation:** TCN-2023-NCLT-00251
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/jindal-poly-films-ltd-3296c532

## Summary

### Background

The case involves an application under Section 9 of the Insolvency & Bankruptcy Code, 2016, filed by M/s Morex Corporation Limited (Operational Creditor) against Jindal Poly Films Ltd. (Corporate Debtor) for initiating Corporate Insolvency Resolution Process (CIRP) due to default in payment of an outstanding operational debt of Rs. 3,42,60,000/-. The Operational Creditor claimed that the Corporate Debtor failed to deliver contracted goods (non-woven fabric) after receiving an advance payment of Rs. 3,00,00,000/-. The Corporate Debtor contended that the goods were manufactured but could not be exported due to a government ban imposed due to the COVID-19 pandemic, and that a pre-existing dispute existed regarding the termination of the contract.

## Facts

Morex Corporation Ltd. (Operational Creditor) placed a purchase order with Jindal Poly Films Ltd. (Corporate Debtor) for the supply of non-woven fabric (SSMMS) in February 2020. The order was for 50,000 Kgs to be delivered by March 15, 2020, later revised to March 23, 2020. Morex paid an advance of Rs. 3,00,00,000/-. Jindal Poly Films claims to have manufactured the goods by March 19, 2020. However, on March 19, 2020, the Government of India imposed a ban on the export of such goods due to the COVID-19 pandemic. Morex terminated the contract on April 1, 2020, and demanded a refund. Jindal Poly Films offered to supply the goods for local sale or wait until the export ban was lifted. Morex refused and filed an application under Section 9 of the IBC to initiate CIRP.

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## Issues and analysis

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

**Ratio:** A pre-existing dispute, as envisaged under Section 8 and Section 9(5)(ii)(d) of the

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**Reasoning:** The NCLT reasoned that the Corporate Debtor had presented sufficient evidence, including

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**Interpretation:** The interpretation of 'pre-existing dispute' requires a genuine disagreement

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**Application:** In this case, the NCLT applied the ratio by finding that the dispute over the

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## Parties

- **Judges:** Praveen…; Ashish…
- **Appellants:** M/s Morex…
- **Respondents:** Jindal Poly Films…
- **Advocates:** Sonali D…; Alok…; +4 more

## Timeline

- **2020-02-01 — Purchase Orde…**: Morex Corporation Ltd. placed a purchase order with Jindal Poly Films Ltd. for the supply…
- **2020-03-04 — Advance P…**: Morex Corporation Ltd. paid an advance of Rs. 1,61,28,750/- (USD 215050) to Jindal Poly…

## 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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