# In the matter of R.J. Rishikaran Projects Private Limited C.P.(IB) No. 302-BB-2019

> NCLT judgment dated 2020-03-02. Citation: TCN-2020-NCLT-01740. M/s. Manojna Enterprises filed C.P.(IB)No.302/BB/2019 under Section 9 of the IBC, 2016, read…

- **Court:** NCLT
- **Order date:** 2 Mar 2020
- **Citation:** TCN-2020-NCLT-01740
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/rj-rishikaran-projects-private-limited-cpib-no-302-bb-2019-837f1933

## Summary

### Background

M/s. Manojna Enterprises filed C.P.(IB)No.302/BB/2019 under Section 9 of the IBC, 2016, read with Rule 6 of I&B (AAA) Rules, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. R.J. Rishikaran Projects Private Limited, alleging a default of Rs.49,24,887.48/-. The Operational Creditor claimed to have completed water proofing and cinder concrete works for the Corporate Debtor, who allegedly defaulted on payments. The Corporate Debtor opposed the petition, citing defective services and breach of contract, and had also initiated criminal proceedings and approached MSEFC. The Operational Creditor also filed a complaint under Section 200 of the Code of Criminal Procedure before the XXI Additional Chief Metropolitan Magistrate at

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## Facts

M/s. Manojna Enterprises (Operational Creditor) claimed that M/s. R.J. Rishikaran Projects Private Limited (Corporate Debtor) defaulted on a payment of Rs.49,24,887.48/- for water proofing and cinder concrete works. The Operational Creditor was awarded works worth Rs.1,02,47,640/-. The Corporate Debtor issued work orders and the Operational Creditor commenced work on 13th September 2016. The Corporate Debtor issued a work completion letter on 10th December 2018 for Rs.78,75,565/- excluding GST. The Corporate Debtor issued post-dated cheques totaling Rs.42,66,600/- on 15th March 2019. Cheque No. 003281 was honored, but Cheque No. 003282 was rejected due to 'payment stopped by drawer'. The Corporate Debtor made a part payment of Rs.2,00,000/- on 16th May 2019. The

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## Issues and analysis

### Issue 1: Whether the debt and default are undisputed, warranting the initiation of CIRP against the …

**Ratio:** The existence of a genuine dispute regarding the debt precludes the initiation of CIRP. A

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**Reasoning:** The NCLT found that the Corporate Debtor had raised valid concerns about the quality of

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**Interpretation:** The IBC requires that the debt and default must be undisputed for CIRP to be

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**Application:** In this case, the Corporate Debtor's allegations of defective services and

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## Parties

- **Judges:** Rajeswara Rao…; Ashutosh C…
- **Appellants:** M/s Manojna…
- **Respondents:** M/s. R.J.…; M/s RJ Rishikaran…

## Timeline

- **2016-09-13 — Commencement…**: Applicant commenced the work upon receipt of…
- **2016-09-10 — Work Ord…**: The work order dated 10th September 2016 was sent by the Corporate Debtor vide email…

## 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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