NCLAT Upholds NCLT Order; Rejects Multiplier Brand’s Insolvency Plea Against Amazon Wholesale

NCLAT upholds NCLT order; rejects Multiplier Brand’s insolvency plea against Amazon Wholesal

The submission was made under the Insolvency and Bankruptcy Code

The National Company Law Appellate Tribunal (NCLAT) has upheld the National Company Law Tribunal (NCLT) order and dismissed a petition by Multiplier Brand Solutions seeking to initiate insolvency proceedings against Amazon Wholesale (India).

Multiplier Brand had filed the plea under Section 9 of the Insolvency and Bankruptcy Code, 2016, alleging a default of Rs.3.7 crore for eight invoices raised between March and May 2023.

However, the three-member NCLAT bench rejected it stating, “The appellant’s claim for payment of invoices, which are the subject matter of Section 9 application, was disputed much before the demand notice was issued."

It added, "The adjudicating authority (NCLT) has not committed any error in refusing to initiate Corporate Insolvency Resolution Process (CIRP), as there was a pre-existing dispute that reflected with the correspondence which took place between the parties.”

Multiplier Brand entered a novation and substitution agreement with Amazon Seller Services and Amazon Wholesale and provided services. It raised invoices for Rs.3.69 crore from March and May 2023. However, Amazon disputed the amount.

Later, claiming default over invoices, Multiplier Brand approached the Delhi bench of the NCLT. Opposing the move, Amazon submitted proof of a dispute regarding the amount claimed by the operational creditor before issuing the demand notice.

Thus, the NCLT rejected the plea, but did not rule on the entitlement or the claim raised by the petitioner on the corporate debtor. Multiplier Brand challenged the order before the appellate tribunal in April.