# In the matter of Adhiraj Constructions Private Limited C.P. (IB) 3585-MB-2019

> NCLT judgment dated 2020-08-11. Citation: TCN-2020-NCLT-00859. Karam Enterprise filed a company petition under Section 8 & 9 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 11 Aug 2020
- **Citation:** TCN-2020-NCLT-00859
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/adhiraj-constructions-private-limited-cp-ib-3585-mb-2019-9bb8591d

## Summary

### Background

Karam Enterprise filed a company petition under Section 8 & 9 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Adhiraj Constructions Private Limited. The petition alleges that Adhiraj Constructions defaulted on a payment of ₹20,34,39,283, inclusive of interest at 12% per annum. Karam Enterprise was awarded a work order for construction, but the work order was terminated by Adhiraj Constructions. Despite completing the work and raising invoices, payments were allegedly not released.

## Facts

Karam Enterprise (Petitioner) filed a petition against Adhiraj Constructions Private Limited (Corporate Debtor) under Section 8 & 9 of the IBC, 2016, seeking to initiate CIRP for a default of ₹20,34,39,283. The Petitioner was awarded a work order by the Corporate Debtor for construction of 8,77,965 sq. ft. at ₹1170 per sq. ft., totaling ₹102,72,19,050. The Petitioner claims to have completed 100% of the plinth work and raised six invoices. The Corporate Debtor terminated the work order on 2019-02-26. The Corporate Debtor certified the invoices but allegedly did not release the payments. The Corporate Debtor paid ₹8,19,63,690 out of the total invoice value of ₹26,37,44,735. The Petitioner issued a demand notice on 2019-08-05, which the Corporate Debtor replied to on

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## Issues and analysis

### Issue 1: Whether there was a pre-existing dispute between Karam Enterprise and Adhiraj Constructions Private …

**Ratio:** The ratio is based on the principle that CIRP should not be initiated if there is a

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**Reasoning:** The court reasoned that the emails exchanged between Karam Enterprise and Adhiraj

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**Interpretation:** The interpretation of the law is that a 'dispute' exists when there is a

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**Application:** In this case, the court applied the ratio by examining the emails and

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## Parties

- **Judges:** SUCHITRAKAN…; V. Nallasen…
- **Appellants:** Karam Ente…
- **Respondents:** Adhiraj Constructi…
- **Advocates:** Amrendra…; Birendra…; +3 more

## Timeline

- **2016-05-27 — Work Order En…**: The Corporate Debtor entrusted the work…
- **2016-07-30 — Corporate Debtor's…**: The Corporate Debtor repeatedly complained about breaches to the Petitioner via emails…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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