In a recent ruling, the Supreme Court of India set aside a National Company Law Appellate Tribunal (NCLAT) order that had admitted an insolvency petition against GLS Films Industries Pvt. Ltd., holding that there existed a plausible pre‑existing dispute between the parties prior to the demand notice under the Insolvencyand Bankruptcy Code, 2016 (IBC).
Chemical Suppliers India had approached the NCLT under Section 9 of the IBC, claiming that GLS Films owed ₹2.92 crore for chemical supplies made between March and July 2021. A demand notice was issued on 11 November 2021, followed by an application for initiation of the corporate insolvency resolution process (CIRP).
The appellant, GLS Films, however,…