# In the matter of Patel Engineering Limited CP (IB) No.627-MB-IV-2021

> NCLT judgment dated 2023-02-08. Citation: TCN-2023-NCLT-04721. The case involves a petition filed by A J Buildcon Private Limited, an Operational Creditor,…

- **Court:** NCLT
- **Order date:** 8 Feb 2023
- **Citation:** TCN-2023-NCLT-04721
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/patel-engineering-limited-cp-ib-no627-mb-iv-2021-009d784b

## Summary

### Background

The case involves a petition filed by A J Buildcon Private Limited, an Operational Creditor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking the initiation of the Corporate Insolvency Resolution Process (CIRP) against Patel Engineering Limited, the Corporate Debtor. The Operational Creditor claimed a sum of Rs. 4,04,43,155.80 as due from the Corporate Debtor based on five invoices and retention money for construction work. The Corporate Debtor contested the claim, asserting the existence of disputes and that the debts arose from separate work orders which cannot be clubbed together.

## Facts

A J Buildcon Private Limited, the Operational Creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Patel Engineering Limited, the Corporate Debtor. The Operational Creditor claimed Rs. 4,04,43,155.80 was due based on five invoices and retention money for construction work performed under a work order dated 01.07.2015 and five subsequent work orders. The payment was due between 17.07.2018 and 20.03.2020. A demand notice was issued on 06.03.2021, and the Corporate Debtor replied on 21.03.2021, claiming no amount was due and payable, asserting that some invoices were never submitted and a dispute existed. The Corporate Debtor further stated that each work order

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted …

**Ratio:** The existence of an operational debt and its default are prerequisites for admitting a

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**Reasoning:** The NCLT found that the Corporate Debtor had admitted that amounts were due, subject to

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**Interpretation:** The operational debt is interpreted as a claim in respect of the provision of

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**Application:** The NCLT applied the ratio to the facts and found that the Corporate Debtor had

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## Parties

- **Judges:** Prabhat…; KISHORE VEMULAPALL…
- **Appellants:** A J Buildcon…
- **Respondents:** Patel Engineering…
- **Advocates:** Vineet J…; Karl K S…

## Timeline

- **2015-07-01 — Work Order Ex…**: The Operational Creditor executed a…
- **2018-07-17 — Payment Due Da…**: Start date for the period…

## 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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