# In the matter of Ria Constructions Ltd. Through Desh Deepak Resolution Professional of Ria Constructions Ltd. Vs. Blessings Resorts Pvt. Ltd. CA (AT) (Ins) No. 1056 of 2021

> NCLAT judgment dated 2021-12-20. Citation: TCN-2021-NCLAT-00008. This is a Company Appeal (AT) (Ins) No. 1056 of 2021 filed by Ria Constructions Ltd. against…

- **Court:** NCLAT
- **Order date:** 20 Dec 2021
- **Citation:** TCN-2021-NCLAT-00008
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/ria-constructions-ltd-through-desh-deepak-resolution-professional-of-ria-constru-5ab127e0

## Summary

### Background

This is a Company Appeal (AT) (Ins) No. 1056 of 2021 filed by Ria Constructions Ltd. against an order dated 20.01.2020 passed by the 'Adjudicating Authority' rejecting the Appellant's application under Section 9 of the IBC. The Appellant is under CIRP proceedings and filed the appeal through the Resolution Professional. The dispute arises from an agreement in 2013 between the Appellant and the 'Corporate Debtor' for construction work, where the Appellant claims an 'operational debt' of Rs. 4,31,73,446/-. Prior to filing the Section 9 application, the Appellant issued a notice under Section 8. The Corporate Debtor had also filed a civil suit seeking a declaration that the Appellant violated the agreement terms.

## Facts

In 2013, Ria Constructions Ltd. (Appellant) and Blessings Resorts Pvt. Ltd. (Corporate Debtor) entered into an agreement for construction work. During the contract, the Corporate Debtor made certain payments to the Appellant. A dispute arose, and the Appellant claimed an 'operational debt' of Rs. 4,31,73,446/-. Before filing a Section 9 application under the Insolvency and Bankruptcy Code (IBC), the Appellant issued a notice under Section 8. The Corporate Debtor filed a civil suit seeking a declaration that the Appellant had violated the terms of the agreement dated 19.01.2013. The Corporate Debtor contested the Section 9 application, arguing that the bills were never verified and authenticated. The Corporate Debtor claimed the contract was terminated via email on

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## Issues and analysis

### Issue 1: Whether the 'Adjudicating Authority' erred in rejecting the Appellant's application under Section 9 …

**Ratio:** The existence of a pre-existing dispute bars the initiation of CIRP under Section 9 of

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**Reasoning:** The 'Adjudicating Authority' found that there was a pre-existing dispute between the

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**Interpretation:** Section 9 of the IBC allows an operational creditor to initiate CIRP against a

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**Application:** In this case, the Corporate Debtor had raised objections to the Appellant's

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## Parties

- **Judges:** Ashok Bh…; Alok Sriv…
- **Appellants:** Ria Constructions…
- **Respondents:** Blessings Resorts…
- **Advocates:** PBA Srini…; AvinashMoh…; +6 more

## Timeline

- **2013-01-01 — Agreemen…**: Agreement between Ria Constructions Ltd. and Blessings Resorts Pvt. Ltd. for construction…
- **2013-01-19 — Agreement…**: Date of the agreement between the…

## 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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