The National Company Law Appellate Tribunal (NCLAT) has stayed insolvency proceedings against cable and wire manufacturer Polycab India Limited over an alleged operational debt of ₹2.78 crore. [Bharat Ajay Jaisinghani v. Asier Metals Pvt. Ltd. & Anr.]
NCLAT's principal bench comprising officiating chairperson Justice Yogesh Khanna and technical members Barun Mitra and Ajai Das Mehrotra granted interim relief on October 9 in an appeal filed by Bharat Ajay Jaisinghani, the suspended director of Polycab.
The tribunal directed that the corporate insolvency resolution process (CIRP) be kept in abeyance, subject to Polycab depositing the entire claimed amount of ₹2.78 crores.
Senior Advocate Arun Kathpalia, appearing for Jaisinghani, submitted that Polycab was ready to deposit the sum without prejudice to its rights and contentions.
Kathpalia pointed to pre-existing disputes over credit notes and highlighted Polycab's standing as India's largest integrated cable manufacturer.
The NCLAT bench observed in its order:
“Though the existence of dispute has been agitated by the Respondent (Asier) but suffice is to say that considering the status of the Appellant (Polycab) as above as also the fact the Appellant is inclined to deposit an amount, though without prejudice to its rights and contentions, let the said amount be deposited and that the impugned order is stayed and be kept in abeyance till further orders,” the NCLAT recorded in its order.
The appeal challenged an October 7 order of the NCLT Ahmedabad Bench admitting a Section 9 IBC plea by operational creditor Asier Metals Private Limited over aluminium ingot supplies.
Polycab had opposed the insolvency arguing that invoices reflected ‘provisional billing’, ledgers required reconciliation and an ₹80 lakh deduction for demurrage was pending.
The NCLT bench of judicial member Shammi Khan and technical member Sanjeev Sharma rejected Polycab's defence.
“Item on the Purchase Order states that the purchase price for products payable by Polycab shall be as specified in the PO, fixed, firm, and cannot be varied without the prior written consent from Polycab... We do not find any correspondence that disputes the quantity, quality, or charges for delayed supplies if any. No debit note is raised by the Corporate Debtor to support its position,” the bench recorded.
“We do not think it is a material issue because the CD has not submitted any final invoice that differed from the provisional invoice,” the NCLT further recorded.
The Ahmedabad bench consequently initiated CIRP and appointed Sunit Jagdishchandra Shah as Interim Resolution Professional.
This led to the appeal before NCLAT.
It will be heard next on October 26.
[Read NCLAT order]
[Read NCLT order]