COMPANY LAW3 Sept 2026
Indian Kanoon - Search engine for Indian Law
An international cotton supplier moved NCLT under the Insolvency and Bankruptcy Code after a buyer failed to pay an agreed USD 74,342. The buyer had acknowledged the debt and signed a settlement on 1 September 2017, fixing payment by 20 September 2017 with 15% default interest. NCLT rejected the petition. The supplier appealed to NCLAT, which heard the case on merits after the buyer stopped appearing.
Key Statutory Highlights
- The dispute arose from a cotton supply contract; after quality issues, the buyer agreed to pay USD 74,342.
- The buyer acknowledged the debt by email on 28 July 2017 and signed a settlement agreement on 1 September 2017, promising payment by 20 September 2017 with 15% default interest.
- After the buyer failed to pay, the supplier filed a Section 9 petition under the IBC, which NCLT rejected; NCLAT later heard the appeal on merits.
Actionable Advice for Taxpayers / Founders:If you hold a signed settlement and written admission of debt from a customer who hasn't paid, keep these documents — they can support a Section 9 petition under the IBC. Speak to a lawyer before filing, as each case depends on its facts.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
Share: