NCLAT Sets Aside Order Initiating Insolvency Against Naxnova After NeSL Marks Debt 'Disputed'

The National Company Law Appellate Tribunal (NCLAT) at Delhi has set aside the admission of Lintec India's insolvency plea against Naxnova after finding that the corporate debtor had raised a pre-existing dispute and that the alleged default was also marked as “disputed” on the National E-Governance Services Ltd. (NeSL) information utility portal.

A bench of Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra passed the order on Monday (May 25)

“Present is a case where notice of dispute was issued by the corporate debtor within 10 days from receipt of the demand notice and there was also record of dispute in NeSL record where status was mentioned as disputed,” the tribunal said.

Salil Musale, suspended director of the corporate debtor, had challenged the National Company Law Tribunal's May 6 order admitting Lintec India Pvt Ltd's insolvency petition.

The dispute arose from a long-standing commercial relationship between the parties involving supply of automobile-grade adhesive products for two-wheelers. Lintec claimed dues of Rs 9.74 crore for supplies made between February and April 2025.

However, the appellate tribunal noted that even before Lintec issued its demand notice on June 20, 2025, the corporate debtor had communicated a day earlier that “there are pre-existing disputes between the parties” and described the demand as premature.

In its formal reply to the demand notice, the corporate debtor denied liability, alleged defective supplies, abrupt stoppage of deliveries, and claimed losses of Rs 35 crore. It later filed a commercial suit before the Bombay High Court seeking recovery of Rs 25.42 crore.

Lintec argued that invoices, e-way bills and GST filings established the debt and default, and that the disputed marking on the NeSL portal was not determinative in light of the documentary record.

The appellate tribunal, however, held that the dispute raised by the corporate debtor was supported by material and could not be dismissed as “moonshine.”

“The notice of dispute in detail has given the facts which cannot be said to be unsupported by any evidence,” the tribunal said.

Setting aside the NCLT's admission order, the appellate tribunal rejected Lintec India's insolvency application.