1 min read.Updated: 06 Nov 2019, 04:08 PM ISTSalman S.H.
CloudWalker Streaming Technologies Pvt Ltd had filed the insolvency plea to recover ₹27 crore from Flipkart
The NCLT order would have severely hit Flipkart's business in India
Bengaluru: Flipkart India Pvt Ltd on Wednesday said the Karnataka High Court has stayed insolvency proceedings against Walmart-owned Flipkart in the National Company Law Tribunal (NCLT) that was initiated by a supplier.
CloudWalker Streaming Technologies Pvt Ltd, a Mumbai-based supplier of LED televisions, had filed the insolvency plea to recover ₹27 crore from Flipkart.
The stay is important for Flipkart as the NCLT order, a copy of which has been reviewed by Mint, would have severely hit its business in India.
A Flipkart spokesperson, in an email response, said “Karnataka High Court has stayed the order of the NCLT in favour of Flipkart. This is an ongoing commercial litigation which we are challenging."
According to the NCLT petition, CloudWalker had entered into an agreement in December, 2016 to supply its products to Flipkart India.
The e-commerce company received and paid for TV sets worth about ₹85 crore, but refused to take delivery of the rest of the order claiming its warehouses had run out of space, CloudWalker alleged. As of March 2018, Flipkart India had allegedly refused to accept 70% of the TV sets it had ordered.
CloudWalker said it was consequently forced to offload the products at low prices. Flipkart India denied the claims and said it owes no money to the Mumbai-based company.
Flipkart India, the business-to-business commerce entity of Flipkart, supplies products to various third-party sellers who then sell to shoppers through Flipkart’s app and website. Flipkart and other e-commerce firms have adopted such convoluted structures in order to get around foreign investment laws, which ban direct online retailing by a foreign firm.