# In the matter of IVRCL Limited

> NCLT judgment dated 2024-02-23. Citation: TCN-2024-NCLT-02419. M/s.SBL Construction Private Limited filed an application (IA No.448 of 2023) in CP (IB)…

- **Court:** NCLT
- **Order date:** 23 Feb 2024
- **Citation:** TCN-2024-NCLT-02419
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ivrcl-limited-8da392e3

## Summary

### Background

M/s.SBL Construction Private Limited filed an application (IA No.448 of 2023) in CP (IB) No.294/7/HDB/2017 under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking the admission and release of a claim amount of Rs. 12,89,09,669/- on an immediate and priority basis. This claim was based on a legal award granted to the applicant for costs and expenditures incurred while executing a works contract. The respondent, IVRCL Limited, had entered into an agreement with Central Public Works Department (CPWD) for construction work, and subsequently sub-contracted a portion of this work to the applicant. Disputes arose regarding payment, leading to arbitration in favor of the applicant. Meanwhile, IVRCL Limited underwent CIRP and liquidation. The Resolution

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## Facts

M/s.SBL Construction Private Limited (Applicant) sought to admit and release a claim of Rs. 12,89,09,669/- from IVRCL Limited (Corporate Debtor) based on an arbitral award. The Applicant and Corporate Debtor entered into a subcontract on 04.12.2013, stemming from an agreement the Corporate Debtor had with CPWD for construction at IIT Bhuvaneswar. Disputes arose, leading to an arbitral award of Rs. 8,23,02,793/- plus interest in favor of the Applicant on 11.08.2017. The Corporate Debtor challenged the award, but the appeal was dismissed on 30.03.2022. Meanwhile, the Corporate Debtor entered CIRP on 23.02.2018 and subsequently liquidation on 26.07.2019. The Applicant filed a claim with the Resolution Professional, which was kept under 'Verification Column'. The Applicant

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## Issues and analysis

### Issue 1: Whether the applicant is entitled to immediate release of the claim amount of Rs. 12,89,09,669/- …

**Ratio:** The court determined that the applicant is entitled to payment as per the provisions of

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**Reasoning:** The court reasoned that allowing the immediate release of the entire arbitral award

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**Interpretation:** Section 53 of the IBC establishes a waterfall mechanism for the distribution of

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**Application:** The court applied this reasoning to the specific facts by concluding that the

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** M/s. SBL Construct…
- **Respondents:** IVRCL Li…; M/s. IVRCL…

## Timeline

- **2013-08-17 — Agreement wi…**: IVRCL Limited entered into an agreement with Central Public Works Department (“CPWD") for…
- **2013-12-04 — Sub-contract to…**: IVRCL Limited entrusted the work for an amount of Rs.74,81,02,562/- to M/s.SBL…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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