# In the matter of RA PowerGen Engineers Pvt. Ltd. C.P. No.256-2016 (T.P. No. 107-2017)

> NCLT judgment dated 2019-03-27. Citation: TCN-2019-NCLT-04299. The case originates from a petition filed before the High Court of Karnataka under Sections…

- **Court:** NCLT
- **Order date:** 27 Mar 2019
- **Citation:** TCN-2019-NCLT-04299
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ra-powergen-engineers-pvt-ltd-cp-no256-2016-tp-no-107-2017-9b25a164

## Summary

### Background

The case originates from a petition filed before the High Court of Karnataka under Sections 433(e) and 433(f) of the Companies Act, 1956, seeking to wind up RA PowerGen Engineers Private Limited due to a default of Rs. 1,60,13,084. The case was later transferred to the National Company Law Tribunal (NCLT), Bengaluru Bench, following a Gazette Notification. After the transfer, Cummins Generator Technologies India Private Limited, the operational creditor, filed an application in Form-5 to initiate Corporate Insolvency Resolution Process (CIRP) against RA PowerGen Engineers Private Limited, the corporate debtor, under Section 9 of the IBC, 2016.

## Facts

Cummins Generator Technologies India Private Limited (Operational Creditor) filed a petition against RA PowerGen Engineers Private Limited (Corporate Debtor) for defaulting on a payment of Rs. 1,60,13,084. The Corporate Debtor purchased goods from the Operational Creditor but failed to make payments on the invoices. The Corporate Debtor acknowledged the liability and issued cheques, which were subsequently dishonored, leading to proceedings under Section 138 of the Negotiable Instruments Act. The Corporate Debtor again admitted liability and agreed to pay in installments, but failed to do so. The Operational Creditor issued a legal notice under Section 434(1)(a) of the Companies Act, 1956, after the cheques were dishonored. The Corporate Debtor, in its reply, stated it

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted on its …

**Ratio:** The legal principle applied is that if a corporate debtor fails to make payments against

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**Reasoning:** The court reasoned that the Corporate Debtor had issued cheques which were dishonored,

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**Interpretation:** The interpretation of default involves considering the factual circumstances

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**Application:** The court applied the ratio to the specific facts by noting that the Corporate

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## Parties

- **Judges:** Rajeswara Rao…; Ashok Kumar…
- **Appellants:** M/s. Cummins…
- **Respondents:** M/s. RA PowerGen…

## Timeline

- **1991-05-01 — Incorporation of…**: Cummins Generator Technologies India Private Limited incorporated under the Companies…
- **2005-03-03 — Incorporation of…**: RA PowerGen Engineers Private Limited…

## 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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