Pranav B Prem

The National Company Law Tribunal (NCLT), Bengaluru Bench comprising Shri Sunil Kumar Aggarwal (Judicial Member) and Shri Radhakrishna Sreepada (Technical Member), has admitted a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Dunzo Digital Private Limited, filed by Velvin Packaging Solutions Pvt. Ltd., for default of an operational debt of ₹1.91 crore. The Tribunal declared a moratorium and appointed an Interim Resolution Professional (IRP) to initiate the Corporate Insolvency Resolution Process (CIRP).

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Background

Velvin Packaging Solutions supplied goods to Dunzo Digital between July 2022 and April 2023, raising 107 invoices aggregating to ₹6.81 crore. After adjusting payments made by the corporate debtor, an outstanding sum of ₹1.91 crore remained due as on 12 July 2022, which the operational creditor claimed as default. Interest of ₹37.9 lakh at 19.5% per annum was also claimed, making the total debt ₹2.29 crore.

Despite issuing a demand notice on 1 September 2023, which was duly received by Dunzo on 11 September 2023, no payment was made. Initially, Dunzo failed to file objections within the time granted. Though the NCLT closed its right to respond, the NCLAT, Chennai, later granted two weeks’ time. The corporate debtor filed objections belatedly, which the NCLT nevertheless took on record in light of the appellate order.

Contentions

The corporate debtor argued that the petition was not maintainable as there were disputes about the quality and nature of the goods supplied, which the petitioner allegedly concealed. It also pointed to a settlement agreement dated 24 June 2024, under which Dunzo agreed to remit ₹1.5 crore, of which ₹35 lakh was paid, and another ₹20 lakh was later remitted. Dunzo contended that the outstanding dues had fallen below the threshold and that disputes should have been referred to arbitration under the agreement.

Velvin Packaging, however, maintained that the disputes raised were vague and unsupported by contemporaneous evidence. It also denied receipt of payments beyond ₹35 lakh under the settlement.

Tribunal’s Findings

The Bench observed that the so-called disputes raised by Dunzo were neither supported by contemporaneous material nor indicative of any genuine pre-existing dispute. Relying on the Supreme Court ruling in Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd. (2017), it held that vague and afterthought allegations could not defeat an otherwise valid claim under Section 9 IBC.

Regarding the settlement agreement, the Tribunal held that partial compliance with its terms did not alter the original date of default or extinguish the cause of action. Referring to Trafigura India Pvt. Ltd. v. TDT Copper Ltd. (2020), it emphasized that breach of a settlement does not constitute new operational debt nor does it bar enforcement of the original claim.

The Tribunal also clarified that the existence of an arbitration clause in the settlement did not bar admission of the insolvency petition, citing the Supreme Court ruling in Vidarbha Industries Power Ltd. v. Axis Bank Ltd. It further rejected Dunzo’s plea that the debt had fallen below the threshold due to part payment, noting that no credible evidence such as receipts or bank statements had been produced.

Directions

Allowing the petition, the Bench admitted Dunzo Digital Pvt. Ltd. into CIRP, imposed a moratorium under Section 14 of the IBC, and appointed Srinivas Vaidyanath Subramaniam as the Interim Resolution Professional. The IRP has been directed to issue public notice, collate claims, constitute the Committee of Creditors (CoC), and file the report on constitution within thirty days.

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Holding that Dunzo Digital Pvt. Ltd. had defaulted on its operational debt of ₹1.91 crore and that its defenses were vague and unsupported by evidence, the NCLT admitted the insolvency petition filed by Velvin Packaging Solutions and commenced CIRP proceedings against the company.

Appearance 

For Petitioner: Shri Ajinkya Kurdukar with Shri Abhishek D.H.

For Respondent: Shri Kumar Anurag Singh with Shri Zain A. Khan, Shri Mohd. Abran Khan

Cause Title: Velvin Packaging Solutions Pvt. Ltd. vs. Dunzo Digital Pvt. Ltd.

Case No: CP (IB) No. 36/BB/2024

Coram: Shri Sunil Kumar Aggarwal (Member-Judicial), Shri Radhakrishna Sreepada (Member-Technical)