TVS Supply Chain Solutions has settled its debt dispute with ZTE Telecom India and withdrawn its appeal in NCLAT against an order that rejected insolvency proceedings against the telecom gear manufacturer. According to reports from CNBC TV18, ETManufacturing, and Economic Times, 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, with NCLAT stating that counsel for the appellant submits the matter has been settled between the parties.
The settlement follows an earlier rejection by the National Company Law Tribunal (NCLT). As reported by CNBC TV18, ETManufacturing, and Economic Times, 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 had stated that the debt claimed by TVS Supply Chain was disputed and under reconciliation dating back to 2017. The dispute involved a ₹4.27 crore claim from ZTE by TVS Supply Chain, with the matter spanning from June 2012 to February 2019.
The dispute arose from Master Service Agreements (MSAs) between ZTE and TVS Supply Chain Solutions, earlier known as TVS Logistics Services. According to the reports, 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. Under these agreements, TVS Supply Chain raised invoices at regular intervals, 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 payment on the pretext that the invoices were not satisfactory, with certain amounts remaining due since 2012.
The financial dispute escalated significantly over time. As reported by CNBC TV18, ETManufacturing, and Economic Times, till September 2015, an amount of ₹7.04 crore was outstanding for payment by ZTE for various projects. ZTE sent an audit query over the bills and was contending discrepancies in earlier invoices. 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 ₹5.60 crore. However, ZTE had not shared any supporting documents for these claims. On July 9, 2018, TVS issued a demand notice under Section 8 of IBC, demanding payment of ₹4.27 crore as principal and interest at the rate of 12% per annum. In its reply, ZTE contended a pre-existing dispute alleging an excess amount being paid to TVS.
The dispute progressed through multiple legal stages before reaching the current settlement. According to the reports, 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 tribunal noted that the debt was never admitted by ZTE while dismissing TVS's plea. The settlement represents a resolution of this long-standing commercial dispute between the two companies in the telecommunications equipment supply chain.
