Failure to supply goods leads to IBC

The National Company Law Tribunal, Ahmedabad Bench, admitted a Section 9 insolvency application against the Corporate Debtor for failure to either supply goods or refund an advance consideration of ₹1.95 crore received towards a purchase order for FSG Castor Oil. 

The Tribunal held that the documentary evidence on record clearly established the existence of an operational debt and default, while no pre-existing dispute was demonstrated by the Corporate Debtor. 

Consequently, Corporate Insolvency Resolution Process (CIRP) was initiated and a moratorium was imposed under Section 14 of the Insolvency and Bankruptcy Code, 2016.