# In the matter of Kapasi Infracon LLP

> NCLT judgment dated 2023-09-04. Citation: TCN-2023-NCLT-01775. This case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 4 Sept 2023
- **Citation:** TCN-2023-NCLT-01775
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/kapasi-infracon-llp-f780f344

## Summary

### Background

This case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by M/S Gannon Dunkerley & Co. Ltd (Operational Creditor) against M/S Kapasi Infracon LLP (Corporate Debtor) for initiating the Corporate Insolvency Resolution Process (CIRP) due to an unpaid operational debt of Rs. 7,76,64,143/-. The debt arose from a sub-contract agreement related to a project assigned to the Operational Creditor by the National Highways and Infrastructure Corporation Limited (NHIDCL). The Corporate Debtor was appointed as a sub-contractor for the project, but disputes arose regarding payments, delays, and the termination of the contract by NHIDCL.

## Facts

M/S Gannon Dunkerley & Co. Ltd (GDCL), the Operational Creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against M/S Kapasi Infracon LLP, the Corporate Debtor, for an unpaid operational debt of Rs. 7,76,64,143/-. GDCL was assigned a project by NHIDCL for the four-laning of a section of NH 37 in Assam. GDCL sub-contracted this project to Kapasi Infracon LLP via an agreement dated 29.07.2019. An escrow account was established for payments related to the project. NHIDCL initially terminated its contract with GDCL but reinstated it following intervention. GDCL extended the project deadline for Kapasi Infracon LLP until 04.05.2022, but the Corporate Debtor failed to meet the deadline. NHIDCL terminated the contract with GDCL on

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## Issues and analysis

### Issue 1: Whether the goods and services availed by the Corporate Debtor from the Operational Creditor …

**Ratio:** Section 5(20) and 5(21) of the IBC, 2016 define 'operational debt' as a debt in respect

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**Reasoning:** The NCLT considered the sub-contract agreement between the parties, which allowed the

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**Interpretation:** The definition of 'operational debt' is broad and encompasses debts arising

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**Application:** The NCLT held that the rental charges claimed by the Operational Creditor were

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## Parties

- **Judges:** Sh. Praveen…; Sh. Ashish…
- **Appellants:** M/S GANNON…
- **Respondents:** M/S KAPASI…

## Timeline

- **2016-01-01 — Insolvency and…**: The Insolvency and…
- **2017-11-09 — Letter of Acc…**: NHIDCL issued a letter of acceptance to…

## 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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