The National Company Law Appellate Tribunal (NCLAT) has set aside insolvency proceedings against Polycab India, ruling that a pre-existing dispute over credit notes, detention and demurrage charges was sufficient to reject the insolvency admission. The appellate tribunal allowed an appeal filed by Polycab's suspended director Bharat Ajay Jaisinghani and overturned the National Company Law Tribunal's (NCLT) Oct 7 order admitting an insolvency petition filed by operational creditor Asier Metals.
Polycab has been released from the corporate insolvency resolution process with immediate effect and can function independently through its board of directors.
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The dispute involved alleged outstanding operational dues of Rs 2.78 crore arising from the supply of aluminium ingots. Polycab had contested the amount, citing unresolved credit notes, provisional billing, discounts, detention and demurrage charges, and reconciliation of accounts.
A key factor has been correspondence exchanged between the two companies before Asier Metals issued its statutory demand notice on August 6, 2026. The tribunal noted that Polycab had sought an adjustment of Rs 80 lakh towards detention and demurrage charges in January 2026. Subsequent email exchanges in February discussed delayed deliveries and resulting commercial losses, with Asier Metals indicating that the charges would be worked out.
WhatsApp exchanges in June and July also showed Polycab seeking credit notes for detention and demurrage charges, premium discounts and reconciliation of ledgers. In an email dated July 22, Polycab disputed the outstanding amount and said mutually agreed credit notes were still pending.
The NCLAT held that the correspondence demonstrated that the dispute was alive before the demand notice was issued. It observed that the issues could not be dismissed as a "patently feeble legal argument" or an assertion unsupported by evidence.
The tribunal also rejected the argument that Polycab could not rely on its detailed response to the demand notice because it was filed after the insolvency petition was instituted on August 24. It said material establishing a pre-existing dispute could still be considered.
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