Hero Electric has been placed under insolvency after Metro Tyres filed a petition for Rs 1.85 crore in outstanding debts. In accordance with the provisions of India’s Insolvency and Bankruptcy Code (IBC), a Delhi bench of the National Company Law Tribunal (NCLT) began the process by suspending Hero Electric’s board and designating Bhoopesh Gupta as the interim resolution professional to supervise the business’s operations, PTI reported.
Hero Electric bought tires and tubes from Metro Tyres for Rs 3.69 crore between August and December 2022, but Rs 1.85 crore of that amount was not paid. This is the basis for the case. Hero Electric cited tread separation, bubbles, and air leakage in some tires as reasons for refusing to pay Metro Tyres, which claimed that resistance to repeated demands for payment continued.
Hero Electric did not raise any quality concerns at the time of delivery or in the months that followed, according to the NCLT’s verdict, which dismissed the company’s response. “We believe that, given the facts and circumstances of this particular case, the corporate debtor has failed to present a convincing argument about the parties’ prior dispute.” Therefore, the tribunal stated in its ruling that the current petition, which was submitted in accordance with Section 9 of the IBC, 2016, should be granted.
The tribunal cited a moratorium, which prohibits Hero Electric from transferring, encumbering, alienating, or disposing of its assets and protects it from any court, tribunal, or arbitration panel’s ruling or order.
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