EXCLUSIVE: NCLAT stays order on insolvency proceedings against HCL Tech

In a major relief to the IT services company, HCL Technologies, the National Company Law Appellate Tribunal (NCLAT) has stayed the order passed by National Company Law Tribunal (NCLT) on January 17,2022 which had directed the initiation of insolvency proceedings against the tech major.

 
HCL Tech confirmed to Business Today that it has managed to receive an interim relief from the NCLAT after an application was filed by the HCL Tech CEO, C. Vijayakumar before the appellate body against the corporate insolvency resolution proceedings (CIRP) order on January 17. The NCLAT observed that the NCLT’s observation to decide the dispute between the parties like a civil court ought not to have been done. The appellate tribunal, while granting interim relief to HCL Tech, has listed the next date of the hearing on February 16 , 2022.
 
On January 17, the National Company Law Tribunal (NCLT) passed an injunction to start a corporate insolvency resolution proceeding against India’s fourth largest IT services company, HCL Technologies with respect to alleged default of payments worth Rs 3.54 crore to a transport company, Sahaj Bharti Travels.

The two parties had entered into a service agreement dated November 19, 2015 for a period of three years. However, the transport company claims that HCL Tech continuously defaulted on its payments under the minimum guarantee clause of the agreement amounting to Rs 3.54 crore.

The transport firm filed an e-application before the NCLT on August 6, 2019 to initiate insolvency proceedings against HCL Tech under Insolvency Bankruptcy Code (IBC).
 
NCLT admitted the application on January 17 this year, thereby initiating the insolvency proceedings under Section 9(5) of the IBC 2016 act and also appointed an Insolvency resolution Professional (IRP) to take over the functioning of HCL Tech with immediate suspension of the company’s board.
 
However, this NCLT order now has been stayed by NCLAT. The NCLAT order copy was seen by BT.
 
The NCLAT order stated that the bench led by Judge Ashok Bhushan has reviewed the email exchanges between the two parties (HCL Tech and Sahaj Bharti), as well as denial of payment claims by HCL Tech, which indicates that there was a genuine dispute between the two parties over the settlement of alleged debt of Rs 3,54,10,565 (Rs 3.54 crore). HCL Tech had submitted before the NCLAT that it made all the payments to the transport firm for which the invoices were raised.
 
Noida-headquartered HCL Tech said in its submission before the NCLAT that it did not make payments with respect to the claims where no invoices were raised as the conditions of the agreement under the minimum guarantee clause were violated by Sahaj Bharti Travels.

Delhi-based lawyer, Pragyan Sharma, along with advocates Mohit Arora and Paramanand Yadav, had filed an application before NCLT on behalf of Sahaj Bharti on August 6, 2019.

Refuting HCL Tech's claims before the NCLAT, Sharma told Business Today that with regards to the non-issuance of the invoices, the agreement had already decided the payment of minimum guarantees and, hence, the transport firm was under no obligation to raise fresh invoices.
 
Sharma also added that HCL Tech had offered to pay a full and final settlement of Rs 20,58,818 as against the pending dues, which was rejected by his client, Sahaj Bharti Travels.