# In the matter of East Godavari Breweries Private Limited CP (IB) No. 58-9-AMR-2021

> NCLT judgment dated 2021-11-17. Citation: TCN-2021-NCLT-00472. The case involves a petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 17 Nov 2021
- **Citation:** TCN-2021-NCLT-00472
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/east-godavari-breweries-private-limited-cp-ib-no-58-9-amr-2021-0eaa8095

## Summary

### Background

The case involves a petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by Mr. S. Srinivasa Rao, Proprietor of M/s. Vencon Constructions (Operational Creditor), seeking initiation of Corporate Insolvency Resolution Process (CIRP) against M/s. East Godavari Breweries Private Limited (Corporate Debtor). The Operational Creditor claims default in payment of Rs.3,69,45,074/- including interest, for services rendered related to the construction of a brewery plant. The Corporate Debtor acknowledges the debt but cites losses due to the termination of a Brewing Agreement and the Covid-19 pandemic as reasons for non-payment.

## Facts

Mr. S. Srinivasa Rao, operating as M/s. Vencon Constructions, filed a petition against M/s. East Godavari Breweries Private Limited under Section 9 of the Insolvency and Bankruptcy Code, 2016. Vencon Constructions, the Operational Creditor, provided construction services to East Godavari Breweries, the Corporate Debtor, for setting up a brewery plant based on a work order dated 07.02.2015. The work order was initially for two years, ending on 06.02.2017, and was later extended until 06.02.2019. As per the work order, the Corporate Debtor paid an advance of Rs.12,94,00,000/- to the Operational Creditor. The Operational Creditor raised invoices totaling Rs.3,69,45,074/-, including interest, for land development works. The Corporate Debtor acknowledged the outstanding

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## Issues and analysis

### Issue 1: Whether the petition filed by the Operational Creditor under Section 9 of the Insolvency and …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016, allows an operational creditor to

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**Reasoning:** The court considered the evidence presented by the Operational Creditor, including the

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**Interpretation:** Section 9 of the IBC provides a mechanism for operational creditors to recover

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**Application:** In this case, the Operational Creditor demonstrated that a debt was due and

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## Parties

- **Judges:** TELAPROLU…
- **Appellants:** Srinivas…
- **Respondents:** East Godavari…; East Godavari…

## Timeline

- **2015-02-07 — Work Orde…**: Date of the work order between the Operational Creditor and the Corporate Debtor for…
- **2015-02-09 — Mobilization Advance…**: Corporate Debtor paid mobilization…

## 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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