TVS Supply Chain Solutions appeals to NCLAT in Rs 5 crore dispute with ZTE Telecom

TVS Supply Chain Solutions Limited has initiated an appeal against a recent order from the National Company Law Tribunal (NCLT) in a financial dispute with ZTE Telecom India Pvt. Ltd, the company disclosed in a regulatory filing on Saturday. The logistics and supply chain solutions provider informed the stock exchanges that it is challenging an order dated October 9, 2025, passed by the NCLT’s Chandigarh Bench. The company has filed the appeal before the National Company Law Appellate Tribunal (NCLAT) in New Delhi under Section 61 of the Insolvency and Bankruptcy Code, 2016.

The legal dispute stems from operational dues claimed by TVS Supply Chain for services rendered to ZTE Telecom India under a business arrangement between the two companies. According to the filing, while the Chinese telecom equipment maker’s Indian arm made partial payments, a significant amount remained outstanding.

The company has filed an operational claim of approximately Rs 5.03 crore against ZTE Telecom, which forms the quantum of the dispute. The disclosure, made under Regulation 30 of the SEBI Listing Regulations, is a standard procedure for listed companies to keep investors informed about material litigation.

“The matter relates to operational dues claimed by the Company from ZTE Telecom for work carried out under the business arrangements between the parties,” TVS Supply Chain stated in its filing. “While part-payments were received, certain amounts remained outstanding.”

Background

The National Company Law Tribunal (NCLT), Chandigarh Bench, in its October 9,2025 order dismissed a petition filed by TVS Supply Chain Solutions Limited to initiate insolvency proceedings against ZTE Telecom India Private Limited over an alleged default of approximately ₹5.03 crore.

The core of the NCLT’s decision rested on the finding of a “pre-existing dispute” between the two companies, a critical factor under the Insolvency and Bankruptcy Code (IBC), 2016. The tribunal concluded that ZTE Telecom had consistently raised objections to the invoices and the quality of services provided by TVS Supply Chain well before the latter issued a formal demand notice under the IBC in July 2018.

A decade-long dispute over services

The dispute originated from work carried out by TVS Supply Chain (formerly TVS Logistics) for ZTE’s telecom projects with clients like Reliance, TATA, and BSNL under two Master Service Agreements dating back to 2012 and 2017.

TVS Supply Chain claimed that despite a rigorous, ZTE-managed invoice approval system involving their ‘P-6’ and ‘SRM’ portals, certain payments for services rendered remained outstanding since 2012. The company filed the Section 9 insolvency petition in May 2019, seeking to recover ₹4.27 crore in principal and ₹75.77 lakh in interest.

ZTE’s defence: Emails reveal “genuine dispute”

ZTE Telecom successfully argued that it had flagged significant discrepancies as early as September 2017, following an internal audit of the BSNL Phase-VII project. The audit alleged overcharging and claims for work at uninstalled or cancelled sites, with potential discrepancies amounting to ₹5.60 crore.

The NCLT order extensively referenced email communications from ZTE to TVS in September 2017, which detailed these discrepancies and threatened to issue a debit note if they were not justified. The tribunal noted that TVS’s initial response was merely that they were “working on the same,” and failed to provide substantive documentary justification at the time.

“The issue that has arisen on internal audit relates to over claim of the workload… claiming of wrong items for tower sites etc.,” the NCLT order stated. It concluded that these communications, which predated the demand notice, demonstrated a “genuine” and “commercial reasonableness” for the dispute, not an attempt to avoid payment.

Legal precedent and tribunal’s rationale

Relying on the Supreme Court’s landmark judgment in Mobilox Innovations Pvt. Ltd. vs. Kirusa Software Pvt. Ltd., the NCLT reiterated that its role in a Section 9 petition is not to evaluate the merits of the dispute but merely to ascertain its existence. Since a plausible dispute was evident from the record, the petition was deemed “not maintainable.”

The tribunal dismissed other technical objections from ZTE, such as the initial defect in the demand notice and the clubbing of claims, as inconsequential given its primary finding of a pre-existing dispute.

Also See: India operations of Chinese ZTE Telecom face insolvency proceedings