| In the instant case, the operational creditor and the corporate debtor entered into a raw material supply agreement for supply of broken rice and coal to the corporate debtor. The Operational debtor stated that despite timely and qualitative supply of broken rice and coal, the corporate debtor failed and neglected to pay amount of pending invoices of the operational creditor even after several reminders. |
| The Operational creditor filed petition under section 9 of the Code for initiating corporate insolvency resolution process against the corporate debtor stating that the corporate debtor had defaulted in repaying a sum. |
| The Corporate debtor contended that there existed no contract between the operational creditor and the corporate debtor for supply of raw material. It was found that two persons ‘Ar’ and ‘An’ entered into contract with the corporate debtor for supply of raw material but they supplied raw material through their firm which was operational creditor. |
| The Corporate debtor was accepting consignment delivered by the operational creditor. Even in the absence of an agreement, the operational creditor was entitled for money for supply of raw material and the corporate debtor could not say that it was not liable to pay to the operational creditor on ground that it entered into contract with two individuals. |
| Having received raw material, it was duty of the corporate debtor to honour invoices raised by the operational creditor. Since the corporate debtor categorically admitted an amount was actually payable to supplier, the operational creditor had locus standi to file petition under section 9 against the corporate debtor. There was no material filed by the corporate debtor that there existed a dispute in fact between it and the operational creditor, and, therefore, petition filed by the operational creditor was to be admitted. |