# In the matter of Alabanna Engineering (India) Private Limited IBA-38-KOB-19

> NCLT judgment dated 2019-10-25. Citation: TCN-2019-NCLT-00799. The Operational Creditor, Sanghvi Movers Limited, engaged in the business of supplying cranes…

- **Court:** NCLT
- **Order date:** 25 Oct 2019
- **Citation:** TCN-2019-NCLT-00799
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/alabanna-engineering-india-private-limited-iba-38-kob-19-625be078

## Summary

### Background

The Operational Creditor, Sanghvi Movers Limited, engaged in the business of supplying cranes on a hire/rental basis, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against the Corporate Debtor, Albanna Engineering (India) Private Limited, which is involved in EPC CONTRACT, Infrastructure and construction works. The Corporate Debtor had approached the Operational Creditor for renting cranes for executing work at their designated site. The Operational Creditor claimed that the Corporate Debtor failed to pay outstanding dues of Rs. 11,05,41,206/-. Despite several reminders and the issuance of cheques, some of which were dishonored, the Corporate Debtor failed to honor its commitments. A Memorandum of Understanding (MoU) was entered into to

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## Facts

Sanghvi Movers Limited, the Operational Creditor, is in the business of supplying cranes on a hire/rental basis. Albanna Engineering (India) Private Limited, the Corporate Debtor, is engaged in EPC CONTRACT, Infrastructure and construction works. The Corporate Debtor approached the Operational Creditor for renting cranes. The Operational Creditor claimed outstanding dues of Rs. 11,05,41,206/-. The Corporate Debtor made irregular payments. Till August 2016, Rs. 3,66,29,015/- was due. The Corporate Debtor issued 4 cheques totaling Rs. 3,25,00,000/-, but some were dishonored. A statutory notice was issued on 07.11.2016 under Section 138 of the Negotiable Instruments Act, 1881. A Memorandum of Understanding (MoU) was entered on 20.12.2016. The Corporate Debtor issued 11

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor to initiate Corporate Insolvency …

**Ratio:** Section 9(5) of the IBC states that the Adjudicating Authority shall, within fourteen

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**Reasoning:** The court found that the application was complete and the Corporate Debtor had defaulted

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**Interpretation:** Section 9 of the IBC provides the procedure for an operational creditor to

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**Application:** The court applied the provisions of Section 9 to the facts of the case and

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## Parties

- **Judges:** Ashok Kumar…; Veera Brahma Rao…
- **Appellants:** M/s. Sanghvi…
- **Respondents:** M/s Albanna…

## Timeline

- **2016-07-31 — Cheque I…**: Cheque bearing No. 622542…
- **2016-08-25 — Cheque I…**: Cheque bearing No. 622541…

## 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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