In October 2026, Polycab India Limited found itself in an unexpected spot. Asier Metals Private Limited, an operational creditor supplying aluminium ingots, dragged the cable giant before the National Company Law Tribunal (NCLT) in Ahmedabad. The claim? An operational debt of ₹2,78,70,157.22.
Here's how the numbers stacked up. Asier had raised invoices totaling ₹34.16 crore against Polycab. Polycab paid about ₹30.96 crore. After adjusting for an opening balance, advance refund, and credit notes, Asier calculated the outstanding at ₹2.77 crore, plus another ₹76,700 from an earlier transaction. The date of default was June 26, 2026.
But Polycab wasn't just sitting quietly. The company argued there were genuine disputes. On January 19, 2026, Polycab requested an adjustment of ₹80 lakh for material shortages, detention, and demurrage. Through mid-2026, the parties exchanged correspondence on credit notes, shortages, TDS (tax deducted at source), discounts, and detention charges. Asier even supplied ledgers for reconciliation on June 22, 2026.
The NCLT Ahmedabad Bench, comprising Judicial Member Shammi Khan and Technical Member Sanjeev Sharma, admitted the Section 9 petition on October 7, 2026. They initiated the Corporate Insolvency Resolution Process (CIRP) and appointed Sunit Jagdishchandra Shah as Interim Resolution Professional.
Polycab's defense centered on three main arguments. First, the invoices were marked "provisional billing," meaning the amount hadn't crystallized. Second, ledgers needed reconciliation. Third, an ₹80 lakh deduction for demurrage was pending.
The bench wasn't convinced. On the provisional billing issue, they noted that Polycab had not submitted any final invoice that differed from the provisional one. "We do not think it is a material issue because the CD has not submitted any final invoice that differed from the provisional invoice," the bench recorded.
The Purchase Order terms also worked against Polycab. The order stated that the purchase price was "fixed, firm, and cannot be varied without the prior written consent from Polycab". The bench found no correspondence disputing quantity, quality, or charges for delayed supplies. Crucially, no debit note was raised to support the demurrage deduction.
The tribunal concluded that the operational debt was due and payable, default had occurred, and no legally sufficient pre-existing dispute existed. The CIRP was on.
Just two days later, on October 9, 2026, the National Company Law Appellate Tribunal (NCLAT) Principal Bench granted interim relief. The bench, comprising officiating Chairperson Justice Yogesh Khanna and technical members Barun Mitra and Ajai Das Mehrotra, stayed the NCLT order and kept the CIRP in abeyance.
The appeal was filed by Bharat Ajay Jaisinghani, described as a suspended director of Polycab. Senior Advocate Arun Kathpalia represented him, arguing that pre-existing disputes over credit notes existed and highlighting Polycab's standing as India's largest integrated cable manufacturer.
The NCLAT's reasoning was brief but significant. "Though the existence of dispute has been agitated by the Respondent (Asier) but suffice is to say that considering the status of the Appellant (Polycab) as above as also the fact the Appellant is inclined to deposit an amount, though without prejudice to its rights and contentions, let the said amount be deposited and that the impugned order is stayed and be kept in abeyance till further orders," the tribunal observed.
The condition was clear: deposit the full ₹2.78 crore by way of a Fixed Deposit Receipt (FDR) in the name of the NCLAT Registrar within a week. The deposit would secure Asier's claim while the appeal continued, without Polycab admitting liability.
Here's the thing about ₹2.78 crore when you're Polycab. It's barely a rounding error.
For FY26, operating cash flow stood at ₹3,810.67 crore. Cash and cash equivalents were ₹390.34 crore. The company boasts a current ratio of 1.84x, borrowings of just ₹39.27 crore, and net working capital of about ₹6,693 crore. Transcript +1
Against a market cap of ₹1,25,601 crore, it's virtually invisible.
Polycab's working capital management is equally robust. The average working capital cycle fell to 15 days in Q1 FY27, helped by higher payable days from letters of credit (LCs). Management expects it to return to the long-term range of 45-50 days. Trade payables stand at ₹6,064 crore, making the ₹2.78 crore claim about 0.05% of total payables. Transcript +1
Keeping the CIRP in abeyance comes with costs, but they're manageable. The ₹2.78 crore FDR is locked with the NCLAT Registrar, earning interest. Legal fees continue. But the board retains control, and business operations continue uninterrupted. Other
If the CIRP were to resume, the dynamics would shift dramatically. The moratorium would kick in, an Interim Resolution Professional would take charge of assets and records, and the board's powers would be suspended. The FDR could be released to Asier if the appeal failed. Beyond that, an adverse outcome could affect lender confidence, counterparty relationships, and market perception.
Polycab has been clear: it views this as a commercial dispute with strong grounds on merits. The company maintains a zero-debt position, net cash exceeding ₹4,000 crore, and a net worth of ₹11,682 crore as of March 31, 2026.
The dispute centers on aluminium ingot supplies and provisional billing practices. Interestingly, Polycab's own procurement operates on similar principles. The company hedges both copper and aluminium, with purchases priced provisionally and an option to fix prices later using LME-linked pricing. Annual Report +2
Management says raw material price changes are passed through to customers on a cost-plus basis, with no inventory gains or losses. The NCLT's rejection of the "provisional billing" defense without a differing final invoice could prompt Polycab to tighten documentation. Disputed deductions like the ₹80 lakh demurrage adjustment would need formal debit notes and agreed reconciliations. Transcript +2
Suppliers may become more cautious, potentially asking for LC-backed terms or tighter reconciliation. However, given Polycab's scale and financial strength, any impact is likely to be marginal rather than structural.
The NCLAT's interim stay is an unreasoned order based on specific facts, so its precedential value is limited. At most, it signals that large, solvent debtors offering to secure claims may obtain stays. The company's robust balance sheet undoubtedly influenced this outcome.
The real legal battle lies ahead. The Supreme Court's Mobilox test requires a plausible, non-spurious pre-existing dispute before the Section 8 notice. In April 2026, the GLS Films judgment reinforced that the NCLT must not conduct a mini-trial at the admission stage.
The NCLT found no such dispute based on the absence of debit notes and final invoices. On appeal, Polycab will likely argue that the ledger reconciliation and credit note issues meet the Mobilox standard. The NCLAT's final ruling on this question could set meaningful precedent for how invoice-based claims and reconciliation disputes are treated under the Insolvency and Bankruptcy Code (IBC).
For operational creditors, this case highlights the need for cleaner final invoices, written acceptance of quantity and price, and records that rebut reconciliation claims. For debtors, it underscores the importance of documenting disputes before any Section 8 notice.
The NCLAT hearing is scheduled for October 26, 2026, though some reports suggest an early listing for October 15. Until then, the stay remains in place, and Polycab continues business as usual.
The ₹2.78 crore dispute may be small change for a company of Polycab's stature, but the legal principles at stake are significant. How the NCLAT ultimately rules on provisional billing, demurrage deductions, and the existence of pre-existing disputes could shape IBC proceedings for years to come.
