NCLT Ahmedabad: Foreign Currency Debt Must Be Converted at Invoice Date; Section 9 Plea Dismissed Below ₹1 Crore Threshold

April 17, 2026 : The National Company Law Tribunal (NCLT), Ahmedabad Bench has held that where an operational debt is denominated in foreign currency, its conversion into Indian Rupees for determining the threshold under Section 4 of the Insolvency and Bankruptcy Code, 2016 must be based on the exchange rate prevailing on the date of the invoice. Applying this principle, the Tribunal dismissed a Section 9 petition after finding that the converted debt fell below the statutory threshold of ₹1 crore.

The ruling came in PM Copper Wire & Cables SDN BHD v. Relicab Cable Manufacturing Limited (CP (IB) No. 63/AHM/2026), decided on 17 April 2026 by a Bench comprising Judicial Member Shammi Khan and Technical Member Sanjeev Sharma.

Background

The operational creditor, a Malaysian entity engaged in the manufacture and supply of copper wires, had entered into a sales contract dated 7 September 2019 with the corporate debtor for supply of annealed copper wire on CIF basis. Pursuant to the agreement, goods weighing 24.384 metric tonnes were supplied and invoiced on 19 September 2019 for USD 1,48,742.40.

The Tribunal recorded that the goods were delivered and accepted without dispute. After adjusting a refundable security deposit of USD 20,000 and a price settlement credit of USD 5,145.02, the outstanding operational debt stood at USD 1,23,597.38, with default commencing on 3 November 2019.

Notably, an earlier Section 9 petition filed by the operational creditor in 2021 had been dismissed in June 2023 on the ground that the converted value of the debt did not meet the ₹1 crore threshold.

Issue

The core issue before the Tribunal was the determination of the relevant date for conversion of foreign currency into Indian Rupees for the purpose of Section 4 of the Code—whether it should be the date of invoice, date of default, or a later date as contended by the operational creditor.

The creditor argued that applying the RBI reference rate as on 19 January 2026 would push the claim above ₹1 crore, thereby satisfying the threshold requirement.

Tribunal’s Findings

Rejecting this approach, the Tribunal held that the correct date for conversion is the date of the invoice, as that is when the liability becomes “quantified and crystallized.”

Relying on the Supreme Court’s decision in Forasol v. ONGC, the Bench observed that foreign currency conversion must be tied to a definite and legally justifiable point in time. In the present case, the invoice date fulfilled that criterion.

The Tribunal further clarified that:

• The statutory threshold under Section 4 is a jurisdictional requirement.
• It must be assessed based on the real value of the debt at the time it was incurred.
• Allowing conversion at a later date would artificially inflate the claim and introduce uncertainty due to fluctuating exchange rates.

The Bench cautioned that permitting such recomputation would make maintainability contingent on external economic variables, defeating the certainty and scheme of the Code.

Conclusion

Applying the exchange rate prevailing on 19 September 2019 (approximately ₹70–71 per USD), the Tribunal found that the rupee equivalent of the outstanding debt fell below ₹1 crore. Consequently, the petition failed to meet the statutory threshold under Section 4.

The application under Section 9 was therefore dismissed as not maintainable.