The National Company Law Appellate Tribunal has dismissed a call for insolvency proceedings to be initiated against Wipro. The dispute pertains to the supply of goods for a government project implemented by the tech giant. The Bengaluru Bench of the National Company Law Tribunal had previously dismissed the plea by Tricolite Electrical Industries in the capacity of operational creditor.
A two-member Chennai bench of the National Company Law Appellate Tribunal had earlier dismissed the operational creditor's petition to initiate insolvency proceedings. It noted that the Insolvency and Bankruptcy Code was not framed for being a "mere recovery legislation for creditors". The NCLAT has now upheld the NCLT's January 2020 order.
The NCLT order had been challenged by the Delhi-based operational creditor – a manufacturer of ‘LT/ HT Electric Panels’. The complaint is in connection to a government project awarded to Wipro for design, manufacture, supply work as well as installation of MV Panels.
Tricolite Electrical Industries contends that Wipro had failed to pay its dues after placing a purchase orders for a total supply worth ₹13.43 crore. The appellant claims that it supplied the goods on time and raised various invoices. However Wipro allegedly made payment of 97% of the value of the invoices. The remainder continued to be kept outstanding in spite of several reminders and a Demand Notice.
Wipro has denied the allegations, arguing that there is a pre-existing dispute between the parties.
“It is the consistent stand of Wipro that 97% of the amount was paid and the balance 3% was kept on hold only on account of evaluating customer satisfaction and it was established that there was a delay of six weeks on behalf of the Appellant Company in executing the job assigned to them on account of which liquidated damages/Penalty of ₹40,56,539, which is as per the terms of the contract was levied," the NCLAT said.
