NCLT Rejects West-In Avo Insolvency Petition Against Workin Business

Case Details

Case Name: West-In Avo Private Limited vs Workin Business Private Limited

Court/Authority: National Company Law Tribunal Chandigarh Bench (Court-II)

Case Number: CP(IB) No.212/Chd/Hry/2024

Date of Order: 22.05.2026

Period of Dispute: Transactions occurred between November-December 2023 with disputes arising from 2022-2024

Parties Involved

Petitioner/Operational Creditor: West-In Avo Private Limited (formerly West-In Avo Nurseries Private Limited), represented by Advocates Mr. Prateek Khanna and Ms. Rumella Jain

Respondent/Corporate Debtor: Workin Business Private Limited, represented by Senior Advocate Ms. Munisha Gandhi along with Advocates Ms. Salina Chalana, Ms. Pooja Singh, and Mr. Karan Tomar

Tribunal Members: Mr. Kaushalendra Kumar Singh (Member Technical) and Mr. Khetrabasi Biswal (Member Judicial)

Issues / Allegations / Violations

• Operational Creditor claimed default amount of ₹1,43,15,524/- for avocados supplied through five invoices between 21.11.2023 and 12.12.2023: INV01074 (₹36,81,600.30 after adjustment), INV01078 (₹25,86,984.00), INV01086 (₹44,39,635.20), INV01095 (₹14,38,437.00), and INV01096 (₹21,68,866.70).
• Corporate Debtor alleged supply of rejected, repacked, or substandard goods and raised disputes regarding quality issues, shortages, and rate differences.
• Corporate Debtor issued debit notes totaling ₹2,08,48,168.3/-, of which credit notes of only ₹1,05,42,266.6/- were issued by Operational Creditor.
• Corporate Debtor claimed ₹1,05,74,466.53 was recoverable from Operational Creditor through four categories: Accepted Debit Notes (₹14,78,186.83), Unsettled Debit Notes (₹39,97,639.84), Quality Dispute Unresolved (₹48,30,075/-), and Discrepancy in Invoiced Amount (₹2,68,564.86).
• Disputes involved perishable nature of avocados requiring 10-20 days for quality assessment versus Operational Creditor's claim that complaints should be raised within 48 hours.

Findings & Observations

• Tribunal found parties maintained running account with reciprocal obligations and substantial payments of ₹26,98,25,712.72 had been made by Corporate Debtor.
• Reconciliation of accounts was ongoing and not finalized at time of demand notice issuance (07.06.2024).
• Contemporaneous communications and issuance of debit/credit notes demonstrated genuine disputes existed prior to demand notice.
• Corporate Debtor's assertion that net outstanding reduced to ₹37,41,057.07 (below ₹1 crore IBC threshold) required detailed examination.
• Tribunal applied Mobilox Innovations vs Kirusa Software precedent, finding "plausible contention" requiring further investigation rather than patently feeble defense.

Penalties / Settlements / Directions

• No penalties or settlements imposed as petition was rejected.
• No monetary consequences for either party from this proceeding.

Corrective Actions & Future Obligations

• No specific corrective actions ordered by tribunal.
• Parties may pursue dispute resolution through appropriate civil forums for account reconciliation and debt recovery.

Final Ruling & Enforcement

• Company Petition CP(IB)No.212/Chd/Hry/2024 stands rejected and disposed of.
• Tribunal held application does not satisfy requirements for initiation of Corporate Insolvency Resolution Process under Section 9 of IBC.
• Existence of genuine pre-existing dispute and absence of crystallized operational debt above statutory threshold rendered application not maintainable.
• Complex factual disputes regarding quality assessment, debit/credit notes, and reconciliation require adjudication in appropriate forum outside summary IBC proceedings.