# In the matter of IBC Solar Projects Private Limited CP (IB) 63-MB-C-IV-2019

> NCLT judgment dated 2020-01-01. Citation: TCN-2020-NCLT-02588. Nuevosol Energy Private Limited, the Operational Creditor, filed a Company Petition under…

- **Court:** NCLT
- **Order date:** 1 Jan 2020
- **Citation:** TCN-2020-NCLT-02588
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ibc-solar-projects-private-limited-cp-ib-63-mb-c-iv-2019-b576abdf

## Summary

### Background

Nuevosol Energy Private Limited, the Operational Creditor, filed a Company Petition under Section 9 of the Insolvency & Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against IBC Solar Projects Private Limited, the Corporate Debtor. The petition was based on the Corporate Debtor's alleged failure to pay a sum of ₹47,37,957.00 as principal and ₹5,46,747.00 as interest, totaling ₹52,84,704.00. The Corporate Debtor contested the claim, citing delays in the supply of materials by the Operational Creditor and invoking a clause in their agreement that allowed for the deduction of liquidated damages.

## Facts

Nuevosol Energy Private Limited (Operational Creditor) filed a petition under Section 9 of the Insolvency & Bankruptcy Code, 2016 against IBC Solar Projects Private Limited (Corporate Debtor) for failing to pay ₹47,37,957.00 as principal and ₹5,46,747.00 as interest, totaling ₹52,84,704.00. The debt arose from a Supply Agreement dated 19.09.2016, where the Operational Creditor was to supply components for solar power plants. The Corporate Debtor claimed delays in the supply of materials, invoking clause 6.2(b) of the agreement to levy liquidated damages. The Operational Creditor served a Demand Notice on 17.08.2018, which the Corporate Debtor replied to on 06.11.2019, stating the notice was misconceived due to the delays. The Corporate Debtor had informed the

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor was justified in deducting liquidated damages from the payments due to …

**Ratio:** The principle is that if a contract specifies liquidated damages for a breach, the party

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**Reasoning:** The court reasoned that even though the overall project was completed ahead of schedule,

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**Interpretation:** This issue involves interpreting the terms of the supply agreement,

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**Application:** The court applied the ratio to the facts by noting that the delays in supply

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## Parties

- **Judges:** Rajasekha…; RavikumarDu…
- **Appellants:** Nuevosol Energy…
- **Respondents:** IBC Solar…

## Timeline

- **2016-09-19 — Supply Agr…**: Operational Creditor and Corporate…
- **2017-05-17 — Liquidated Damages…**: Corporate Debtor informed Operational…

## 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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