Supreme Court Judgment On Goods Of Inferior Quality









ZNK Traders Private Limited (Appellant) versus Shri Kishore Shankar Singh Purkar And Anr On 13.12.2021

 In Civil Appeal No. 4804 of 2019 between ZNK Traders Private Limited (Appellant) versus Shri Kishore Shankar Singh Purkar And Anr, Hon'ble Supreme Court held that the dispute with respect to the inferior quality was taken by the corporate debtor much belatedly after the transaction between the parties and the same was taken for the first time in the reply to the notice section 138 of Negotiable Instruments Act. 

 Supreme Court further said that no such dispute was taken by the corporate debtor till the cheque were issued which came to be dishonoured and till the proceedings under section 138 of the Negotiable Instruments Act were initiated. The aforesaid aspect was not properly appreciated by the NCLAT and the order passed by the NCLAT is unsustainable. 

 Hence, the present appeal was allowed and the impugned judgment and order passed by NCLAT dated 29.01.2019 in Company Appeal (AT) (Insolvency) No. 739 was quashed and set aside. Further, the matter was remitted back to NCLAT to decide the said Appeal afresh in accordance with law and on its own merits. 

All the contentions and/or defences, which may be available to the respective parties, however, excluding the dispute raised by the respondent(s) corporate debtor with respect to the inferior quality of the goods, were kept open to be considered by the NCLAT in accordance with the law and on its own merits. The present Appeal was allowed to the aforesaid extent without any cost.


Article Written By: Mr. Raman Sharma (CS, LLB, DIM, B.Com)
Contact: barristerramansharma@gmail.com 



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