# In the matter of SABASH ENGINEERING (CHENNAI) PRIVATE LIMITED

> NCLT judgment dated 2026-04-28. Citation: TCN-2026-NCLT-00453. Enmas India Pvt. Ltd. (Operational Creditor) filed a petition under Section 9 of the Insolvency…

- **Court:** NCLT
- **Order date:** 28 Apr 2026
- **Citation:** TCN-2026-NCLT-00453
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chennai/sabash-engineering-chennai-private-limited-0a85e1ba

## Summary

### Background

Enmas India Pvt. Ltd. (Operational Creditor) filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Sabash Engineering (Chennai) Pvt. Ltd. (Corporate Debtor) for initiating Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed a total operational debt of Rs.1,13,52,510/-, which included outstanding payments for goods supplied (Rs.64,05,981/-) and an advance paid for engineering products to be manufactured and supplied by the Corporate Debtor (Rs.49,46,529/-). The Corporate Debtor disputed the nature of the advance payment, contending it was a financial debt and could not be clubbed with operational debt to meet the minimum threshold for CIRP under Section 4 of the IBC. The Corporate Debtor also acknowledged

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## Facts

Enmas India Pvt. Ltd. (Petitioner/Operational Creditor) and Sabash Engineering (Chennai) Pvt. Ltd. (Respondent/Corporate Debtor) have been in a business relationship since 2013.

The Petitioner supplied M.S. Plates, P.M. Plates, and other materials to the Respondent, resulting in an outstanding amount of Rs.64,05,981/-.

The Petitioner also placed purchase orders on the Respondent for the manufacture and supply of engineering products and paid an advance of Rs.49,46,529/-.

The Corporate Debtor neither made payments for the supplies received nor supplied the engineering products for which it had received an advance.

The total operational debt claimed by the Petitioner is Rs.1,13,52,510/-.

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## Issues and analysis

### Issue 1: Whether the advance payment made by the Operational Creditor to the Corporate Debtor for the supply …

**Ratio:** An advance payment made for the supply of goods or services qualifies as an operational

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**Reasoning:** The NCLT relied on the Supreme Court's ruling in 'Consolidated Construction Consortium

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**Interpretation:** Section 5(21) of the IBC is interpreted broadly to include claims arising from

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**Application:** The advance payment of Rs.49,46,529/- made by Enmas India Pvt. Ltd. to Sabash

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## Parties

- **Judges:** SANJIV…; Venkataraman…
- **Appellants:** Enmas India Pvt.…
- **Respondents:** Sabash Engineering…
- **Other parties:** K.J. V…
- **Advocates:** Harimo…; Shri. Vikram P.…; +1 more

## Timeline

- **2008-03-13 — Incorporation of…**: Sabash Engineering (Chennai)…
- **2013 — Commencement of…**: Business relationship between Enmas India Pvt. Ltd. and Sabash Engineering (Chennai) Pvt.…

## 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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