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The NCLAT Registrar has accepted TVS Supply Chain’s plea for more time to plug the loopholes, which it accepted on Thursday. It also directed that the petition be listed before a bench for hearing.
In October this year, the Chandigarh-based bench of the National Company Law Tribunal (NCLT) had dismissed the insolvency petition filed by TVS Supply Chain Solutions after noting the pre-existing dispute between the parties.
The NCLT, in its order, had said that the debt claimed by TVS Supply Chain Solutions is in dispute since 2017 and is subject to reconciliation.
TVS Supply Chain Solutions, formerly known as TVS Logistics Services, had moved the insolvency tribunal claiming default. Recovery of Rs 4.27 crore from ZTE Telecom India by filing a petition under Section 9 of the Insolvency and Bankruptcy Code. This dispute is from the period from June 2012 to February 2019.
ZTE, a telecom equipment supplier to companies like Reliance, Tata, Aircel and BSNL, had entered into two master service agreements (MSAs) with TVS Supply Chain.
According to the MSA, TVS Supply Chain Solutions used to issue invoices at regular intervals, which were required to be paid within 30 days of issuing the invoice.
However, TVS Supply Chain alleged that ZTE had generally made either partial payment against the invoices raised or delayed payment on the pretext that the invoices were not satisfactory, and that certain amounts remained due and payable at all times since 2012.
As of September 2015, the amount of ZTE had outstanding payments of Rs 7.04 crore for various projects.
However, ZTE had sent an audit query on the bills, and was contesting discrepancies in earlier invoices. Later, some emails were exchanged between the parties.
Ultimately, on January 29, 2018, ZTE wrote a letter to TVS in which it alleged discrepancies in TVS’s invoices. 5.60 crores.
However, ZTE did not share any supporting documents.
On July 9, 2018, TVS issued a demand notice under Section 8 of the IBC, demanding payment. 4.27 crore principal and interest at the rate of 12 percent per annum. In its response, ZTE argued there was a pre-existing dispute, accusing TVS of paying additional amounts.
Later, on May 7, 2019, TVS moved NCLT by filing a bankruptcy petition against ZTE.
The NCLT observed that the case involved multiple reconciliations and audit objections before the statutory demand notice. NCLT rejected TVS’s plea saying that ZTE never accepted the loan.