# In the matter of International Recreation and Amusement Ltd. CA No. 68-PB-2017

> NCLT judgment dated 2017-04-28. Citation: TCN-2017-NCLT-00881. S.R. Constructions, categorizing itself as an Operational Creditor, approached the National…

- **Court:** NCLT
- **Order date:** 28 Apr 2017
- **Citation:** TCN-2017-NCLT-00881
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/international-recreation-and-amusement-ltd-ca-no-68-pb-2017-590e9d41

## Summary

### Background

S.R. Constructions, categorizing itself as an Operational Creditor, approached the National Company Law Tribunal (NCLT) against International Recreation and Amusement Ltd., the Corporate Debtor. The claim arose from a debt of Rs. 11,90,978, which the Petitioner alleges is in default. The debt originated from a letter of intent dated 28.01.2014 for interior work at the Corporate Debtor's site. Prior to this, an agreement dated 20.1.2014 was entered for works totaling Rs. 76,60,000, with payments due within 21 days of claim submission. This value was later enhanced to Rs. 1,24,20,530 via an amending agreement dated 27.09.2014.

## Facts

S.R. Constructions (Operational Creditor) filed a petition against International Recreation and Amusement Ltd. (Corporate Debtor) for a debt of Rs. 11,90,978. The debt arose from interior work based on a letter of intent dated 28.01.2014 and an agreement dated 20.1.2014 for Rs. 76,60,000, later amended to Rs. 1,24,20,530 on 27.09.2014. Work was completed on 20.09.2014, and a completion certificate was issued on 30.09.2014, including a 12-month defect liability period expiring on 30.09.2015. A final bill of Rs. 1,06,96,430 was raised on 7.11.2014. Despite repeated communications and email demands on 6.05.2015 and 26.06.2015, the Respondent failed to settle the amount. The Petitioner issued a winding-up notice under the Companies Act, 1956, and a notice under IBC, 2016,

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor is in default of …

**Ratio:** The legal principle applied is that if a corporate debtor fails to pay a debt that has

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**Reasoning:** The court reasoned that the Corporate Debtor had not disputed the liability owed to the

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**Interpretation:** The interpretation of the law is that a debt is considered to be in default

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**Application:** In this case, the Corporate Debtor had failed to pay the debt owed to the

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## Parties

- **Judges:** M. M. K…; R. VARADH…
- **Appellants:** S.R. Constr…
- **Respondents:** International…

## Timeline

- **2014-01-20 — Agreement…**: Agreement entered into between S.R. Constructions and International Recreation and…
- **2014-01-28 — Letter of…**: Letter of intent placed by International Recreation and Amusement Ltd. to S.R.…

## 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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