On December 20, the National Company Law Tribunal (NCLT) in Delhi admitted Hero Electric to the Corporate Insolvency Resolution Process (CIRP) following a petition filed by Metro Tyres, an operational creditor, over unpaid dues of ₹1.8 crore (Metro Tyres Ltd v. Hero Electric Vehicles Pvt Ltd).
The Bench, consisting of Judicial Member Bachu Venkat Balram Das and Technical Member Atul Chaturvedi, concluded that Hero Electric failed to raise a convincing argument regarding a pre-existing dispute, making the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, admissible.
Metro Tyres had filed the petition for ₹1,85,25,373, which was owed for goods supplied between August and December 2022. Hero Electric contended that the petition was not maintainable, citing issues with the quality of goods supplied after September 2022, based on customer feedback. The company also raised concerns about account reconciliation, alleging that Metro Tyres had suppressed key facts.
However, the Tribunal observed that Hero Electric had not raised any quality issues immediately after receiving the goods, and only did so nine months later. The Tribunal dismissed Hero Electric’s defense as an “afterthought” and a “moonshine defense.” Additionally, it found insufficient evidence to support Hero Electric’s claim regarding account reconciliation.
The NCLT appointed Bhoopesh Gupta as the Interim Resolution Professional (IRP) to manage Hero Electric’s operations until a Committee of Creditors (CoC) is formed. The IRP was ordered to make a public announcement and assume control over Hero Electric’s assets immediately. Hero Electric was also instructed to provide relevant documentation to the IRP within a week and deposit ₹2,00,000 to cover initial costs.
Metro Tyres was represented by Advocates Pallav Saxena, Syed Arsalan, Prateek Khaitan, and Chaitanya Sharma, while Hero Electric was represented by Advocates Alok Dhir, Varsha Banerjee, and Udita Singh.
