# In the matter of Gammon India Limited CP 1727-IBC-NCLT-MAH-2017

> NCLT judgment dated 2019-01-14. Citation: TCN-2019-NCLT-05256. Govind Sales, an operational creditor, filed a petition under Section 9 of the Insolvency &…

- **Court:** NCLT
- **Order date:** 14 Jan 2019
- **Citation:** TCN-2019-NCLT-05256
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/gammon-india-limited-cp-1727-ibc-nclt-mah-2017-0bde621e

## Summary

### Background

Govind Sales, an operational creditor, filed a petition under Section 9 of the Insolvency & Bankruptcy Code, 2016, against Gammon India Limited, the corporate debtor, for failing to pay Rs. 55,91,980/-, which included a principal amount of Rs. 33,72,579/- and interest of Rs. 22,19,401/- charged at 18% from the due date. The operational creditor was engaged by the corporate debtor for supplying goods and services for the Rosa Power Plant at Shahjahanpur, Uttar Pradesh, as per work order no. 9101/82 dated 12.5.2014. The corporate debtor made partial payments, leaving six invoices outstanding from 30.9.2014 to 28.2.2015. The operational creditor issued a demand notice dated 27.10.2017 under Section 8 of the IBC, which the corporate debtor replied to on 8.11.2017,

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## Facts

Govind Sales (Operational Creditor) supplied goods and services to Gammon India Limited (Corporate Debtor) as per work order no. 9101/82 dated 2014-05-12 for Rosa Power Plant. The Operational Creditor raised invoices totaling Rs. 74,83,177/- until the last invoice dated 2015-02-28. The Corporate Debtor paid Rs. 41,10,597/-, leaving six invoices outstanding. The total outstanding amount was Rs. 33,72,579/- plus interest of Rs. 22,19,401/- at 18% per annum as per the MSME Act. The Operational Creditor issued a demand notice dated 2017-10-27 under Section 8 of the IBC. The Corporate Debtor replied on 2017-11-08, disputing the claim and the applicability of the MSME Act. The Operational Creditor claimed to be registered under the MSME Act. The Corporate Debtor paid the

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## Issues and analysis

### Issue 1: Whether the interest claimed by the Operational Creditor under the MSME Act can be entertained …

**Ratio:** The IBC has an overriding effect by virtue of Section 238. Therefore, being the

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**Reasoning:** The court reasoned that the IBC is a subsequent provision and overrides other laws,

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**Interpretation:** This implies that claims for interest based solely on the MSME Act may not be

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**Application:** The court applied this principle by holding that the dispute regarding interest

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## Parties

- **Judges:** V. P. S…; RavikumarDu…
- **Appellants:** Govind…
- **Respondents:** Gammon India…

## Timeline

- **2014-05-12 — Work Ord…**: Work order no. 9101/82 issued to Govind Sales by Gammon India Limited for supplying goods…
- **2014-09-30 — Outstanding I…**: Start date of the period for which…

## 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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