New Delhi: Popular e-commerce platform owned by Walmart, Flipkart India, is in a pickle as the National Company Law Tribunal (NCLT) has initiated insolvency proceedings for defaulting on Rs 18 crore payment to one of its suppliers.
A Corporate Insolvency Resolution Process (CIRP) was initiated by NCLT’s Bengaluru bench after one of Flipkart’s LED TV suppliers, CloudWalker Streaming Technologies filed a petition under Insolvency and Bankruptcy Code (IBC), 2016.
The supplier had sought the CIRP on the ground that the company paid only Rs 85 crore against the admitted dues of Rs 103 crore on the supply of LED TVs. As a result, it had committed default on the payment of Rs 26.95 crore.
The petitioner also claimed that Flipkart denied collecting all the LED TVs after placing an order, citing a shortage of space in its warehouse.
Cloudwalker further claimed that due to Flipkart’s failure in fulfilling its commitment it was forced to unload the uncollected goods at a heavily marked-down price just so it could remain afloat.
Cloudwalker said it had sent a demand notice to which Flipkart failed to reply. It said that the company has “consistently and persistently failed, omitted and neglected to discharge its admitted and acknowledged debt and liability.”
Cloudwalker concluded in the petition that in view of the circumstances, it is apparent that Flipkart is commercially insolvent and is unable to pay its debts. The Corporate Debtor company is not economically viable and poses a threat to commercial morality, the petitioner said.
However, Flipkart has denied all allegations and refused to admit debt stating that it has already paid the supplier the due amount against various invoices.
Flipkart said it is a profit-making company with sufficient financial strength and is actively doing business. Claiming that it had already paid Rs 85.57 crore, the company asserted that the allegation is “baseless, frivolous, bereft of truth and filed with malafide intentions.”
The e-commerce retailer argued in NCLT that the petition is not maintainable either in law or on facts and it is liable to be rejected with exemplary costs.