NCLT Ahmedabad Admits ₹2.78 Cr. Insolvency Plea Against Polycab, Rejects 'Provisional Billing' Defence

On 7 October, the Ahmedabad Bench of the National Company Law Tribunal (NCLT) admitted the insolvency petition filed by Asier Metals Pvt. Ltd. against Polycab India Ltd. over an operational debt default of Rs. 2.78 crore.

A Bench comprising Judicial Member Shammi Khan and Technical Member Sanjeev Sharma held that a dispute raised after a demand notice cannot establish a pre-existing dispute to defeat an insolvency petition. It observed:

“...the claim before the Tribunal is not founded merely upon the gross invoice value, but upon the balance which, according to the Operational Creditor, remains payable after the stated adjustments.”

Asier Metals said its business relationship with Polycab began in 2020 under terms requiring 100% advance payment against purchase orders for aluminium ingots. It said Polycab followed this arrangement until March 2026 but issued two purchase orders on 8 June 2026 and 25 June 2026 without making advance payments.

It nevertheless supplied the aluminium ingots at a fixed rate of Rs. 405 per kg and raised 29 invoices totalling Rs. 34.16 crore. Polycab paid Rs. 30.96 crore. After accounting for refunds, credit notes and other adjustments, Asier Metals claimed Rs. 2.78 crore as outstanding, with the default dated 26 June 2026. It served a statutory demand notice on 6 August 2026.

Polycab disputed the claim, arguing that the invoices were marked “Provisional Billing” and remained subject to final pricing, reconciliation, quantity discounts, credit notes and other adjustments. It relied on various communications, particularly an email dated 22 July 2026, to contend that a pre-existing dispute existed over the claimed amount, credit notes, detention/demurrage and reconciliation.

It also raised counterclaims of Rs. 17.52 crore and sought an adjustment of Rs. 80 lakh towards detention/demurrage, contending that the debt had neither been admitted nor crystallised and that Asier Metals had arrived at the amount through a unilateral and unreconciled computation.

Asier Metals denied these claims and relied on the purchase orders, which expressly stipulated a fixed price of Rs. 405 per kg. It said credit notes dated 30 June 2026 had already accounted for variations and that Polycab's email dated 22 July 2026 did not genuinely dispute the underlying supplies, invoices or contractual rate.

Further, it argued that the “Provisional Billing” endorsement did not render the debt uncrystallised because the purchase orders fixed the price and the invoices reflected that rate. It also challenged Polycab's reliance on WhatsApp screenshots and unilateral workings.

It submitted that Polycab raised the Rs. 17.52 crore counterclaim only after the insolvency petition was filed and that varying computations and unilateral workings could not establish a pre-existing dispute or extinguish the operational debt.

The Tribunal examined the purchase orders, invoices, bank records, ledgers and correspondence. It found that Polycab had received the goods and made substantial payments, while Asier Metals had accounted for the credit notes in computing the outstanding amount.

It held that the reply dated 2 September 2026 and the NeSL entry dated 11 September 2026 came after the demand notice and therefore could not establish a pre-existing dispute.

Further, the Bench found that Polycab had not produced any debit note or contemporaneous document disputing the supply, quality or contractual rate. The correspondence relied upon by Polycab reflected routine commercial dealings and did not support a dispute concerning the transactions from which the outstanding amount arose.

It also held that the “Provisional Billing” endorsement was immaterial in the absence of any subsequent final invoice showing a different amount.

Accordingly, the NCLT admitted the insolvency petition, imposed a moratorium and appointed Sunit Jagdishchandra Shah as the Interim Resolution Professional.