Biomatiques Identification Solutions Private Limited (“Biomatiques”) had filed a petition (“Petition”) against Wipro Limited (“Wipro”) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“IBC”), before the National Company Law Tribunal, Bangalore (“NCLT”), alleging that Wipro failed to pay invoices for the supply of Iris Biometric Devices (“Devices”) to Andhra Pradesh Technology Services Limited (“APTS”), a Government of Andhra Pradesh (“GoAP”).
Under the purchase orders between Wipro and Biomatiques (“Purchase Orders”), Wipro’s payment obligations to Biomatiques were back-to-back and contingent upon acceptance of the Devices by APTS.
APTS issued a show cause notice citing defective Devices, partially cancelled the Purchase Orders for four districts, and directed that no payments be made until defects were remedied. Wipro relied on these facts to show a pre-existing dispute and also challenged the maintainability of the Petition given the arbitration clause in the Purchase Orders.
This show cause notice was issued within months of the supply of the Devices, and more than three years before the IBC Demand Notice. The quality issues of the Devices were so grave that APTS was compelled to partially cancel the purchase order with Wipro for four districts. The Commissioner of Civil Supplies, GoAP, in its communications had further directed APTS that no payment should be made until the defective Devices were replaced, pursuant to a review by the Hon’ble Chief Minister of Andhra Pradesh. Due to the back-to-back nature of the agreement and the non-payment by APTS, Wipro was not in a position to make payments to Biomatiques.
Prior to the hearing of the Petition on merits, Wipro had approached the Hon’ble High Court of Karnataka (“High Court”), to prohibit the NCLT from continuing the with the proceedings or in the alternative quash the Petition. The High Court directed the NCLT to first adjudicate upon two aspects: (i) the contention raised by Wipro with regard to the existence of a dispute, taking into consideration the terms of the Purchase Orders and the communications exchanged between the parties; and (ii) the maintainability of the Petition in light of the arbitration clause entered into between the parties
Before the NCLT Biomatiques placed reliance on:
(a) The correspondences issued by APTS certifying that Wipro had supplied more than 28,000 Biomatiques Devices to the GoAP and that the Devices were working satisfactorily.
(b) Balance confirmation to support its claim, contending that Wipro had acknowledged the outstanding amounts.
(c) A cheque for INR 43,69,916/- to contend that Wipro had received payments from APTS beyond what had been disclosed in the proceedings and had failed to forward the corresponding amounts to Biomatiques.
(d) Various test reports and certifications, including STQC/UIDAI certifications and a report prepared by a professor at the Indian Institute of Technology, Bombay, to contend that the Devices supplied were compliant and functional.
(e) none of the Devices had been returned to Biomatiques and no formal intimation of rejection had been provided to Biomatiques.
In response, we relied on documents on record to show the existence of a pre-existing dispute, noting that the show cause notice issued by APTS pre-dated the IBC Demand Notice by more than three years, and that Wipro had specifically raised a dispute in its reply to the IBC Demand Notice. Wipro also highlighted that Biomatiques had suppressed several material documents. Wipro further contended that the cheque relied upon by Biomatiques related to a separate contractual arrangement between Wipro and a third party and had no connection to amounts payable to Biomatiques, and that the quality certifications relied upon by Biomatiques were general in nature and did not address the functionality of the Devices in the specific context of the GoAP deployment. Wipro also drew the attention of the NCLT to the arbitration clause contained in the Purchase Orders and argued that the Petition was not maintainable before the NCLT and that the parties ought to be relegated to arbitration.
After hearing both parties, the NCLT dismissed the Petition by order dated 18 March 2026.
The team was led by Lomesh Kiran N, Partner, (Head – Disputes, South India); with support from Twinkle Chadwa, Senior Associate; and Ajay TK, Associate.
