An appeals court has dismissed insolvency proceedings against e-commerce major Flipkart, which was dragged to the National Company Law Tribunal (NCLT) last year.
A three-judge bench of the National Company Law Appellate Tribunal (NCLAT) said on Monday that Flipkart’s operational creditor, which had filed the case, failed to submit any documents to prove the existence of the debt and the amount in default.
Mumbai-based Cloudwalker Streaming Technologies Pvt Ltd, which imported and retailed LED TVs on Flipkart's online platform, had dragged the company to the Bengaluru bench of the NCLT last year over alleged default of Rs 26.95 crore towards procured imported televisions as per the supply agreement. On October 24, the NCLT admitted its application to initiate an insolvency resolution process against Flipkart. The e-commerce company then moved the NCLAT.
Flipkart, a unit of US-based Walmart Inc., had previously denied the allegations and said that there was no debt or liability as it had already paid Rs 85.57 crore towards the invoices raised by Cloudwalker.
Flipkart said it was not liable to pay any further. It argued that the petition was an "abuse of law" and an attempt to use insolvency proceedings to “arm-twist” the company to succumb to CloudWalker’s “illegal” demands.
In its order, the NCLAT order also said that the figures provided by Flipkart to Cloudwalker were only projections and didn’t constitute a binding purchase order. Cloudwalker “solely placed reliance on a few emails to allege that he had suffered losses on account of projections for the demand provided by Flipkart,” the tribunal added.