# In the matter of Kakateeya Fabs Private Limited CP (IB) No. 63-9-AMR-2020

> NCLT judgment dated 2021-12-14. Citation: TCN-2021-NCLT-00180. The case involves a petition filed by Bharat Heavy Electricals Limited (BHEL), the Operational…

- **Court:** NCLT
- **Order date:** 14 Dec 2021
- **Citation:** TCN-2021-NCLT-00180
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kakateeya-fabs-private-limited-cp-ib-no-63-9-amr-2020-0e460107

## Summary

### Background

The case involves a petition filed by Bharat Heavy Electricals Limited (BHEL), the Operational Creditor, under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Kakateeya Fabs Private Limited, the Corporate Debtor. BHEL claims that Kakateeya Fabs defaulted on payments amounting to Rs. 29,77,129.75/- with future interest, related to invoices for goods supplied under a subcontract. The subcontract was related to a project for Ideal Energy Project Limited (IEPL), where BHEL was to supply and erect equipment, and Kakateeya Fabs was to manufacture a deaerator assembly. IEPL later cancelled its contract with BHEL, leading to the cancellation of the subcontract with Kakateeya Fabs.

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## Facts

Bharat Heavy Electricals Limited (BHEL), the Operational Creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, against Kakateeya Fabs Private Limited, the Corporate Debtor, for defaulting on a payment of Rs. 29,77,129.75/- with future interest. The debt arose from a subcontract where Kakateeya Fabs was to manufacture a deaerator assembly for BHEL's project with Ideal Energy Project Limited (IEPL). IEPL cancelled its contract with BHEL, leading to the cancellation of the subcontract with Kakateeya Fabs. BHEL had supplied materials to Kakateeya Fabs for the manufacturing process. After the cancellation, the materials remained with Kakateeya Fabs. Kakateeya Fabs initially acknowledged the debt and promised to return the materials or

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor, Kakateeya Fabs Private Limited, committed a default in making payment …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, allows an operational

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**Reasoning:** The court noted that the Corporate Debtor admitted that the materials were lying with

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**Interpretation:** Section 9 of the IBC requires the existence of a debt and a default in payment

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**Application:** The Corporate Debtor admitted that the materials were lying with them and also

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## Parties

- **Judges:** TELAPROLU…
- **Appellants:** Bharat Heavy…
- **Respondents:** Kakateeya Fabs…; Kakateeya Fabs…

## Timeline

- **2009-12-31 — Order Pla…**: Ideal Energy Project Limited placed an order on Bharat Heavy Electricals Limited for…
- **2011-11-14 — Contract Canc…**: Ideal Energy informed Bharat Heavy Electricals Limited that it wished to cancel the…

## 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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