# In the matter of American Road Technology & Road Solutions Pvt. Ltd. C.P. (IB) No. 117-BB-2017

> NCLT judgment dated 2020-03-13. Citation: TCN-2020-NCLT-01533. The case involves an application filed by Shri G.V. Sudhindra, an operational creditor, under…

- **Court:** NCLT
- **Order date:** 13 Mar 2020
- **Citation:** TCN-2020-NCLT-01533
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/american-road-technology-road-solutions-pvt-ltd-cp-ib-no-117-bb-2017-316b697e

## Summary

### Background

The case involves an application filed by Shri G.V. Sudhindra, an operational creditor, under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. American Road Technology & Solutions Private Limited, the corporate debtor, for an alleged default of Rs. 47,07,371/-. The operational debt is claimed as unpaid salary arrears. The corporate debtor contested the application, alleging that there was a pre-existing dispute regarding the debt, the operational creditor was involved in embezzlement of funds, and the company was solvent. The corporate debtor also filed criminal cases against the operational creditor.

## Facts

Shri G.V. Sudhindra, the operational creditor, filed an application under Section 9 of the IBC seeking to initiate CIRP against M/s. American Road Technology & Solutions Private Limited, the corporate debtor, for an alleged default of Rs. 47,07,371/-. The operational debt is claimed as unpaid salary arrears from April 2012 to October 2014. Sudhindra was appointed as Vice President (Operations) of the company on May 2, 2012, with effect from April 1, 2012, by Mr. M.G. Mohan Kumar. The corporate debtor contested the application, alleging a pre-existing dispute, embezzlement of funds by the operational creditor, and the company's solvency. The corporate debtor filed criminal cases against Sudhindra and others based on a forensic audit report by V. Raghavan & Co.,

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## Issues and analysis

### Issue 1: Whether there exists a valid operational debt owed by the corporate debtor to the operational …

**Ratio:** The existence of a clear and undisputed debt is a sine qua non for initiating CIRP under

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**Reasoning:** The NCLT found that the appointment letter of the operational creditor was issued prior

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**Interpretation:** The term 'debt' under the IBC requires a legally enforceable obligation arising

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**Application:** In this case, the appointment letter was issued prior to the incorporation of

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## Parties

- **Judges:** Rajeswara Rao…; Ashutosh C…
- **Appellants:** G.V. Sudh…
- **Respondents:** American Road…; American Road…

## Timeline

- **2012-04-01 — Appointment of…**: Shri G.V. Sudhindra was appointed as Vice President (Operations) of the Corporate Debtor…
- **2012-05-02 — Appointment Letter…**: Mr. MG Mohan Kumar issued an…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5 — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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