# In the matter of Srinivas Reddy Yadiki vs. Ardee Hi-Tech Private Limited & Ors.

> NCLAT judgment dated 2024-03-28. Citation: TCN-2024-NCLAT-00557. The case involves an appeal against an order by the National Company Law Tribunal (NCLT),…

- **Court:** NCLAT
- **Order date:** 28 Mar 2024
- **Citation:** TCN-2024-NCLAT-00557
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/srinivas-reddy-yadiki-vs-ardee-hi-tech-private-limited-ors-d8cd0e0a

## Summary

### Background

The case involves an appeal against an order by the National Company Law Tribunal (NCLT), Hyderabad Bench, which initiated Corporate Insolvency Resolution Process (CIRP) against Bevcon Wayors Private Limited based on an application under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. The appellant, Srinivas Reddy Yadiki, challenges the order, arguing that the operational creditor's claim is contingent upon a 'back-to-back' payment arrangement with GVK Coal (Tokisud) Company Pvt. Ltd., and that the corporate debtor could not pay due to non-receipt of funds from GVK Coal. The operational creditor, Ardee Hi-Tech Private Limited, contends that the corporate debtor defaulted on payments for supplied items and that the 'back-to-back' arrangement is not a valid

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## Facts

Srinivas Reddy Yadiki, the appellant, is a shareholder, promoter, and erstwhile director of Bevcon Wayors Private Limited (the corporate debtor). Ardee Hi-Tech Private Limited, the respondent, is the operational creditor. The dispute arises from a purchase order issued by the corporate debtor to the operational creditor for the supply of items. The appellant contends that the payment was subject to a 'back-to-back' arrangement, meaning the corporate debtor would only pay the operational creditor after receiving payment from GVK Coal (Tokisud) Company Pvt. Ltd., for whom the corporate debtor was a lead member of a consortium. The appellant claims that due to the cancellation of coal blocks allotted to GVK Coal, payments were delayed, and the corporate debtor could not

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## Issues and analysis

### Issue 1: Whether the NCLT erred in admitting the application under Section 9 of the Insolvency and …

**Ratio:** The Adjudicating Authority can admit the application under Section 9 if there is an

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**Reasoning:** The tribunal found that the operational debt existed, was due and payable, and there was

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

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**Application:** The tribunal applied the ratio to the facts, finding that the operational

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## Parties

- **Judges:** Sharad Kumar…; M. Venu…; +1 more
- **Appellants:** SRINIVAS REDDY…
- **Respondents:** Bevcon Wayors…; M/s. Ardee…

## Timeline

- **2012-04-10 — Consortium Ag…**: M/s Bevcon Wayors Pvt. Ltd., M/s. GTL Limited and Operational Creditor entered into…
- **2012-04-11 — Addendum Consortium…**: Addendum Consortium…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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