Insolvency proceedings against Flipkart dropped after order from NCLAT

Insolvency proceedings against Flipkart dropped after order from NCLAT
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28 Feb, 2020

The National Company Law Appellate Tribunal (NCLAT) has dismissed an order of corporate insolvency proceedings against Flipkart Internet Services, which owns and operates the e-commerce marketplace. 

The order dated February 24 was passed by a three-member bench, comprising Justice Venugopal M, technical member Kanthi Narahari and technical member VP Singh. 

Corporate Insolvency Resolution Process against the Walmart-backed ecommerce giant was initiated by the National Company Law Tribunal (NCLT), Bengaluru in October 2019.  It was based on a plea filed by Cloudwalker Streaming Technologies. Flipkart had appealed to NCLAT against the decision. 

Cloudwalker had alleged that Flipkart did not take the delivery of 21,808 LED TV sets imported between October 2017 and December 2017, which were imported by the entity. Cloudwalker said that Flipkart pressured it into selling the stock at a discounted price at a later date. The company claimed that its losses amounted to Rs 21.58 crore.

In the order reviewed by TechCircle, the NCLAT stated that there was no purchase order and “in the absence of any supply or sale and any document to substantiate the same, Respondent 1 (Cloudwalker) cannot be the operational creditor.” 

NCLAT also pointed out that due to lack of documents, the authority could not determine the amount payable to Cloudwalker.

Flipkart was represented by senior advocates Kapil Sibal, Arun Kathpalia and others from Shardul Amarchand Mangaldas.