Operational Creditor cannot initiate Insolvency Proceedings When Complaints Regarding Defects Remain Unresolved: NCLT rules against Schneider Electric India Pvt. Ltd. [Read Order]
When there is a legitimate pre-existing dispute regarding the quality of goods and services, particularly when those issues were brought up before the demand notice was issued, the Operational Creditor cannot begin insolvency proceedings under Section 9 of the IBC.
In a ruling against Schneider Electric India Pvt. Ltd., the National Company Law Tribunal (NCLT), New Delhi bench has held that an Operational Creditor cannot initiate insolvency proceedings against the Corporate Debtor for non-payment, when complaints regarding defects in products remain unresolved. Patiala House Court grants Bail to Accused in Rs. 75 Cr Fake GST…
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