# In the matter of Amma Construction India Private Limited

> NCLT judgment dated 2023-09-08. Citation: TCN-2023-NCLT-01734. The case involves a petition filed by J Rajendra Naidu, an Operational Creditor, against M/s…

- **Court:** NCLT
- **Order date:** 8 Sept 2023
- **Citation:** TCN-2023-NCLT-01734
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/amma-construction-india-private-limited-03ca5410

## Summary

### Background

The case involves a petition filed by J Rajendra Naidu, an Operational Creditor, against M/s Amma Construction India Private Limited, the Corporate Debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claimed a default of Rs. 1,41,31,275/-. The Corporate Debtor had entered into a subcontract agreement with HEC India LLP for installation of fence and other works in the plant of KIA Motors, India, and further subcontracted the said work to the Operational Creditor. The Operational Creditor raised several running account (RA) bills for the work done, but the Corporate Debtor allegedly failed to make full payments.

## Facts

J Rajendra Naidu, the Operational Creditor, filed a petition against M/s Amma Construction India Private Limited, the Corporate Debtor, under Section 9 of the IBC, claiming a default of Rs. 1,41,31,275/-. The Corporate Debtor had a subcontract agreement with HEC India LLP for work at KIA Motors, which was further subcontracted to the Operational Creditor. The Operational Creditor raised five RA bills between November 2018 and May 2019. The Corporate Debtor made a partial payment of Rs. 15,00,000/- against the first bill. The Corporate Debtor argued that the Operational Creditor further subcontracted the work to Raj Infra and Developers without consent, and that direct payments were made to Raj Infra and Developers by HEC India LLP. The Corporate Debtor also claimed

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## Issues and analysis

### Issue 1: Whether the Operational Creditor met the threshold requirement of Rs. 1 crore under Section 4 of …

**Ratio:** Section 4 of the IBC stipulates a minimum threshold of default for initiating CIRP. The

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**Reasoning:** The Tribunal examined the invoices and calculations provided by both parties and found

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**Interpretation:** The threshold requirement under Section 4 of the IBC is a mandatory condition

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**Application:** In this case, the Tribunal found that the outstanding principal amount was less

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## Parties

- **Judges:** T. Krishn…; Manoj Kumar…
- **Appellants:** J Rajendra…
- **Respondents:** M/s Amma Construct…
- **Advocates:** S Viveka…; Goku…; +2 more

## Timeline

- **2017-10-01 — Subcontract A…**: The Corporate Debtor entered into a…
- **2018-02-23 — Subcontract A…**: The Corporate Debtor further subcontracted…

## 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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