Metro Tyres drags Hero Electric to insolvency court over payment of Rs 1.85 crore
The New Delhi bench of the National Company Law Tribunal has admitted the insolvency petition filed by operational creditor Metro Tyres Limited against Hero Electric Vehicles Pvt. Ltd. The dispute Centers around an outstanding payment of Rs. 1.85 crore for cycle tyres and tubes supplied by Metro Tyres to Hero Electric.
Hero Electric claims the supplied tyres were of substandard quality, leading to safety concerns for their customers. They argue that this constitutes a pre-existing dispute, preventing the initiation of insolvency proceedings.
Metro Tyres denies these claims, stating that they have a customer-friendly claim policy and that Hero Electric’s concerns are unfounded. The company maintains that the outstanding payment is legitimate and overdue.
Metro tyres has submitted that it has performed its services with due care and diligence and supplied the said goods at the respective delivery sites with consonance to the instructions of the Corporate Debtor and no dispute was ever raised by the Corporate Debtor in respect to the aforesaid transactions.
It said that on various occasions, it had requested the Hero Electric Vehicles for payment of the pending amount. On 09 September 2023, the Corporate Debtor sent an email approximately after nine months from the last invoice, on the basis of field feedback received by the Corporate Debtor, wherein Corporate Debtor took a moonshine defense and stated that in 90/90×10 tyre and 90/90×12 tyre supplied by Corporate Debtor, there is issue of Tread Separation, Bubbles and Air Leakage.
In response to the email, the Operational Creditor sent an E-mail on 11 September to Hero Electric and categorically stated that Operational Creditor has not supplied any substandard product to any OEM and even if some difficulty has been faced in field, the Operational Creditor has a claim policy for the purposes of the same.
To this, Hero Electric has never raised any quality issue or any sort of dispute in any manner whatsoever from their end in terms of their own inspection policy and the same is evident from the Balance Confirmation Letter dated 29 June 2023 certified through Corporate Debtor’s Manager Accounts confirming the Balance Confirmation as on 31 March 2023.
The NCLT found merit in Metro Tyres petition and admitted the same. It has appointed Bhoopesh Gupta as interim resolution professional.
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