New Delhi, Apr 19 (PTI) TVS Supply Chain Solutions has settled its debt dispute with ZTE Telecom India and withdrawn its appeal in NCLAT against an order that rejected insolvency proceedings against the telecom gear manufacturer.
Earlier this week, TVS Supply Chain counsel informed the National Company Law Appellate Tribunal (NCLAT) about the settlement and requested withdrawal of the appeal.
A two-member NCLAT bench comprising Chairperson Justice Ashok Bhushan and Member (Technical) Barun Mitra allowed the withdrawal for the plea.
"Counsel for the appellant (TVS) submits that the matter has been settled between the parties and he may be permitted to withdraw this appeal. Permission is granted," said NCLAT.
In October last year, a Chandigarh-based bench of the National Company Law Tribunal (NCLT) had dismissed the insolvency plea filed by TVS Supply Chain after observing a pre-existing dispute between the parties.
NCLT in its order had said that the debt claimed by TVS Supply Chain was disputed and under reconciliation dating back to 2017.
TVS Supply Chain Solutions, earlier known as TVS Logistics Services, had moved NCLT claiming a default of Rs 4.27 crore from ZTE by filing a plea under Section 9 of the Insolvency & Bankruptcy Code. The dispute is for the period June 2012 to February 2019.
ZTE, a telecom equipment supplier for companies like Reliance, Tata, Aircel, and BSNL, had entered into two Master Service Agreements (MSAs) with TVS Supply Chain.
As per MSAs, TVS Supply Chain raised invoices at a regular interval, which were payable within 30 days of raising the invoice.
However, TVS Supply Chain alleged that ZTE has generally made either part payments against the invoices raised or delayed the payment on the pretext that the invoices were not satisfactory, and certain amounts have remained due and payable at all times since 2012.
Till September 2015, an amount of Rs 7.04 crore was outstanding for payment by ZTE for various projects.
However, ZTE had sent an audit query over the bills, and was contending discrepancies in earlier invoices. Later, some emails were exchanged between the parties.
Finally, on January 29, 2018, ZTE addressed a letter to TVS wherein it stated that there are purported discrepancies in invoices of TVS to the tune of Rs 5.60 crore.
However, ZTE had not shared any supporting documents.
On July 9, 2018, TVS issued a demand notice under Section 8 of IBC, demanding payment of Rs 4.27 crore as principal and interest at the rate of 12 per cent per annum. In its reply, ZTE contended a pre-existing dispute alleging an excess amount being paid to TVS.
Later, on May 7, 2019, TVS filed an insolvency petition in NCLT against ZTE.
NCLT observed that the matter involved multiple reconciliation and audit objections before the statutory demand notice. The debt was never admitted by ZTE, observed NCLT while dismissing TVS plea.