# In the matter of Coastal Energen Private Limited IBA-1279-2019

> NCLT judgment dated 2021-08-03. Citation: TCN-2021-NCLT-01495. Gammon Engineers and Contractors Private Limited, the operational creditor, filed an…

- **Court:** NCLT
- **Order date:** 3 Aug 2021
- **Citation:** TCN-2021-NCLT-01495
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/coastal-energen-private-limited-iba-1279-2019-6fc516cb

## Summary

### Background

Gammon Engineers and Contractors Private Limited, the operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Coastal Energen Private Limited, the corporate debtor. The operational creditor claimed that the corporate debtor defaulted on payment of Rs. 15,17,11,780/- including interest @ 15% p.a. The corporate debtor acknowledged the liability and debts and started making part payments during each date of hearing in a previous case (CP/253/IB/2018). As of 06.12.2018, the corporate debtor had paid a sum of Rs.4,70,00,000/-. The parties arrived at an understanding that the balance sum of Rs.10,97,94,264/- was to be paid in installments. The

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## Facts

Gammon Engineers and Contractors Private Limited (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Coastal Energen Private Limited (Corporate Debtor). The Operational Creditor claimed a default of Rs. 15,17,11,780/- including interest. The Corporate Debtor acknowledged the debt in a previous proceeding (CP/253/IB/2018) and made part payments totaling Rs. 4,70,00,000/-. A payment schedule was agreed upon for the remaining balance of Rs. 10,97,94,264/-. The previous application was disposed of with the liberty to revive in case of default. The Operational Creditor alleged that the Corporate Debtor failed to pay the final installment of Rs.

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## Issues and analysis

### Issue 1: Whether the Operational Creditor has established a ground to initiate CIRP against the Corporate …

**Ratio:** The initiation of CIRP requires the establishment of a debt and a default in payment of

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**Reasoning:** The NCLT found that the Operational Creditor had not taken any steps to reconcile the

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**Interpretation:** The court interpreted the previous order as requiring reconciliation of

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**Application:** The NCLT applied the principle that CIRP cannot be initiated if there is an

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## Parties

- **Judges:** R. Sucha…; Anil Ku…
- **Appellants:** Gammon Engineers…
- **Respondents:** Coastal Energen…
- **Advocates:** P.J. Sri…; Anant Mer…

## Timeline

- **2009-11-12 — Letter of Acc…**: Corporate Debtor issued a Letter of Acceptance (LoA) to the Operational Creditor for a…
- **2009-12-09 — Contract Ex…**: A contract was executed between the Operational Creditor and the Corporate Debtor for the…

## 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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