NCLT refuses to admit plea by DHL to initiate insolvency against Eicher Motors

The National Company Law Tribunal (NCLT) at Delhi refused to admit a plea DHL Supply Chain India Pvt Ltd (DHL) to initiate insolvency proceedings against Eicher Motors Limited, a commercial vehicle manufacturer and also the parent company of Royal Enfield. .A coram of judicial member Bachu Venkat Balaram Das and technical member LN Gupta noted that there were pre-existing disputes between the parties before the issuance of the demand notice and refused to allow the insolvency application..DHL and Eicher had entered into an agreement called "service agreement for warehouse" in August 2019 and DHL was to provide logistical and warehousing services.The term of the agreement was three years effective from October 1, 2019 to September 30, 2022. The entire term constituted a lock-in period for both parties.Around February 2021, Eicher decided not to use the warehouse even for bike storage and sought to prematurely terminate the agreement. DHL rejected the proposal of premature termination of the agreement. When Eicher did not respond to the rejection notice, DHL asked Eicher to remove the assets lying in the warehouse.As the dismantling and shifting etc. was to be done by DHL, it raised invoices to the tune of ₹6,71,36,644.Both the parties alleged deficiency of services by the other.In view of the unilateral blockage of dispatches of inventory pointed out by Eicher, and DHL's alleged refusal to rectify the same, the parties agreed to terminate the agreement in December 2020. In the plea filed by DHL before the NCLT, it claimed an operational debt of ₹8,28,86,046.."The correspondence establishes severe disputes between the parties inter-se, with each party having claims and counter-claims against the other. Eicher too, has raised plausible contentions, which require further investigation. In view of the above we conclude that there being pre-existing disputes between the parties, the Application is dismissed," the tribunal held..Advocate Amit Dayal appeared for DHL. Advocate Anoop Dawar appeared for Eicher.[Read Order]