# In the matter of Reach Seamless Ltd. CP (IB) No. 272-KB-2019

> NCLT judgment dated 2020-01-08. Citation: TCN-2020-NCLT-02450. SMP Constructions Private Limited, the Operational Creditor, filed an application under Section…

- **Court:** NCLT
- **Order date:** 8 Jan 2020
- **Citation:** TCN-2020-NCLT-02450
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/reach-seamless-ltd-cp-ib-no-272-kb-2019-ab2340ac

## Summary

### Background

SMP Constructions Private Limited, the Operational Creditor, filed an application under Section 9 of the Insolvency & Bankruptcy Code, 2016 against Reach Seamless Limited, the Corporate Debtor, alleging default in payment of operational debt amounting to Rs.60,04,463. The Corporate Debtor was offered a work order on 24.07.2012 to complete civil work at Dahej, Gujarat, with conditions to complete the work around the clock and by 10.12.2012. The Operational Creditor completed the assigned construction work and raised a total bill of Rs.3,61,69,659, out of which the Corporate Debtor paid Rs.3,57,00,408. The Operational Creditor claimed that the Corporate Debtor did not refund the retention amount of Rs.36,04,216, including the balance amount for the job done, leading

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## Facts

SMP Constructions Private Limited (Operational Creditor) filed an application under Section 9 of the Insolvency & Bankruptcy Code, 2016 against Reach Seamless Limited (Corporate Debtor) for non-payment of operational debt amounting to Rs.60,04,463. The Corporate Debtor had issued a work order to the Operational Creditor on 24.07.2012 for civil work at Dahej, Gujarat, with specific conditions for completion. The Operational Creditor completed the work and raised a bill of Rs.3,61,69,659, out of which Rs.3,57,00,408 was paid. The Operational Creditor claimed non-refund of a retention amount of Rs.36,04,216, leading to the total outstanding debt. A demand notice was served on 26.09.2018. The Corporate Debtor argued that the Operational Creditor did not hand over the

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor under Section 9 of the Insolvency & …

**Ratio:** Section 9(5)(2)(d) of the IBC states that the adjudicating authority must reject the

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**Reasoning:** The court considered the Corporate Debtor's argument that a dispute existed prior to the

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**Interpretation:** The court interpreted the term 'existence of dispute' as defined by the Hon'ble

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**Application:** The court applied the ratio to the facts and found that the dispute raised by

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Respondents:** Reach Seamless…

## Timeline

- **2012-07-24 — Work Order…**: Corporate Debtor issued a work order to the Operational Creditor for civil work at Dahej,…
- **2012-12-10 — Completion D…**: Deadline for completion of the…

## 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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