NCLAT Rejects Plea For Insolvency Against Amazon Wholesale

The National Company Law Appellate Tribunal has set aside a petition seeking to initiate insolvency proceedings against Amazon Wholesale (India) Pvt. A three-member NCLAT bench upheld the order passed by the National Company Law Tribunal, which had in March this year dismissed the insolvency plea filed by Multiplier Brand Solutions.

Multiplier Brand Solutions had filed the plea under Section 9 of the Insolvency & Bankruptcy Code. It had alleged a default of Rs 3.7 crore for eight invoices raised between March 2023 and May 2023.

However, rejecting it, NCLAT said the "claim of Appellant for payment of invoices which are the subject matter of Section 9 Application was disputed much before Demand Notice was issued".

The appellate tribunal further said, "The adjudicating authority (NCLT) has not committed any error in refusing to initiate CIRP, there being pre-existing dispute which is reflected with the correspondence which took place between the parties much prior to issuance of demand notice." Multiplier Brand Solutions had entered into a novation and substitution agreement with Amazon Seller Services and Amazon Wholesale (India) and provided its services.

It had raised invoices amounting to Rs 3.69 crore from March 2023 to May 2023. However, the amount was disputed by Amazon.

Later claiming default over the said invoices, Multiplier Brand Solutions approached the Delhi bench of NCLT.

This was opposed by Amazon which submitted the existence of a dispute regarding the amount claimed by the operational creditor before the issuance of the demand notice.

Agreeing to this, NCLT rejected the plea. However, it said it was not expressing any opinion on entitlement or the claim raised by the petitioner on the corporate debtor.

This order was challenged by Multiplier Brand Solutions in April this year before the appellate tribunal, NCLAT.