# In the matter of Rajasthan State Road Development & Construction Corporation Ltd. Vs. Vasundhra Gupta & Ors. Company Appeal(AT) (Ins) No. 131 of 2021

> NCLAT judgment dated 2021-12-06. Citation: TCN-2021-NCLAT-00022. The case involves an appeal against an order passed by the Adjudicating Authority (National…

- **Court:** NCLAT
- **Order date:** 6 Dec 2021
- **Citation:** TCN-2021-NCLAT-00022
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/rajasthan-state-road-development-construction-corporation-ltd-vs-vasundhra-gupta-4148e2ab

## Summary

### Background

The case involves an appeal against an order passed by the Adjudicating Authority (National Company Law Tribunal, Jaipur Bench) regarding the termination of work orders issued to Aesthetic Stone Arts India Pvt. Ltd. (Corporate Debtor) by Rajasthan State Road Development & Construction Corporation Ltd. (the Corporation). The Adjudicating Authority had ruled that the termination of Work Orders No. 1 and 2 by the Corporation was inconsistent with Section 20 of the Insolvency and Bankruptcy Code (IBC), 2016, and was invalid and prohibited under Section 238 of the IBC. The Adjudicating Authority also stated that the termination proceedings could not be initiated or continued under the moratorium of Section 14 of the IBC, and consequently, the invocation of performance

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## Facts

Rajasthan State Road Development & Construction Corporation Ltd. (the Corporation) awarded Work Order No. 1 to Aesthetic Stone Arts India Pvt. Ltd. (Corporate Debtor) on 28.03.2017 for the construction of a building for State of Art Capacity Building and Training Centre in Jaipur, amounting to Rs. 2,99,50,904.12. The commencement date was 10.04.2017, and the completion date was 09.07.2018. Several extensions were granted, but the Corporate Debtor failed to complete the work. On 30.03.2020, a provisional time extension was granted until 30.06.2020, without prejudice to the Corporation's right to recover compensation. The work order was terminated on 11.06.2020, with only 76% of the work completed. The bank guarantee was encashed on 26.06.2020. A fresh tender was

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## Issues and analysis

### Issue 1: Whether termination of Work Order No. 1 is in violation of provisional extension letter dated …

**Ratio:** The language of the extension letter dated 30.03.2020 clearly stated that the extension

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**Reasoning:** The Corporate Debtor was awarded the work order on 28.03.2017 and had to complete the

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**Interpretation:** The extension letter did not waive the Corporation's right to terminate the

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**Application:** The Corporate Debtor was a defaulter prior to 19.02.2020 and was not entitled

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## Parties

- **Judges:** Jarat Kuma…; Ashok Kumar…
- **Appellants:** RAJASTHAN STATE…
- **Respondents:** AESTHETIC STONE…; Vasundhra…

## Timeline

- **2017-03-28 — Work Order No.…**: Rajasthan State Road Development & Construction Corporation Ltd. awarded Work Order No. 1…
- **2019-03-13 — Work Order No.…**: Rajasthan State Road Development & Construction Corporation Ltd. awarded Work Order No. 2…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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