# In the matter of Larsen and Toubro Limited

> NCLT judgment dated 2023-10-20. Citation: TCN-2023-NCLT-01039. Chandramouli Silk Mills, an operational creditor, filed a company petition under Section 9 of…

- **Court:** NCLT
- **Order date:** 20 Oct 2023
- **Citation:** TCN-2023-NCLT-01039
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/larsen-and-toubro-limited-9c5a8da9

## Summary

### Background

Chandramouli Silk Mills, an operational creditor, filed a company petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Larsen & Toubro Limited, the corporate debtor, based on an alleged default of Rs. 1,44,01,609/-. The claim included unpaid rent, interest on delayed payments, and damages for property repair. The operational creditor leased a property to the corporate debtor for a labour colony related to an IKEA project. A leave and license agreement was in place, but disputes arose regarding outstanding dues and property damage upon vacation.

## Facts

Chandramouli Silk Mills (Operational Creditor) filed a petition against Larsen & Toubro Limited (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate CIRP. The claim amounted to Rs. 1,44,01,609/-, including unpaid rent, interest, and damages. The Operational Creditor leased property to the Corporate Debtor for a labour colony under a Leave and License Agreement from 01/01/2018 to 31/12/2020. The Corporate Debtor was to pay a security deposit of INR 1,40,00,000/- and monthly compensation. The Corporate Debtor sent an intimation letter on 16th December 2019, to vacate the premises by 29th February 2020. The Operational Creditor served a notice on 03rd March 2020, due to non-payment of dues. The Corporate Debtor paid

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor meets the minimum threshold of INR 1 …

**Ratio:** The minimum threshold for initiating CIRP under Section 4 of the Insolvency and

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**Reasoning:** The court reasoned that the claim of INR 1,44,01,609/- included INR 50,00,000/- for

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**Interpretation:** The interpretation of Section 4 requires that the operational debt must be

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**Application:** In this case, since the damages and interest were not adjudicated or agreed

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## Parties

- **Judges:** ANURADHA SANJAY…; Kuldip Kumar…
- **Appellants:** Chandramouli Silk…
- **Respondents:** Larsen & Toubro…
- **Advocates:** Zal T. Andhyarujin…; Akanksha A…; +3 more

## Timeline

- **2018-01-01 — Leave and Licence…**: Leave and Licence Agreement for the…
- **2019-12-16 — Intimation Letter by…**: Corporate Debtor sent an Intimation Letter stating they would vacate the premises by 29th…

## 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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