# In the matter of POWER MECH PROJECTS LIMITED

> NCLT judgment dated 2025-01-29. Citation: TCN-2025-NCLT-00567. M/s. Largess Engineering, the Operational Creditor, filed a petition under Section 9 of the…

- **Court:** NCLT
- **Order date:** 29 Jan 2025
- **Citation:** TCN-2025-NCLT-00567
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/power-mech-projects-limited-5ac20afa

## Summary

### Background

M/s. Largess Engineering, the Operational Creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against M/s. Power Mech Projects Limited, the Corporate Debtor, due to alleged default in payment of operational debt. The Corporate Debtor had subcontracted two work orders to the Operational Creditor for laying a 20' Dia LPG Pipeline for the Mundra Kandla Pipeline Project. The Operational Creditor claimed that the Corporate Debtor defaulted on payments for five invoices raised between 11.07.2019 and 31.10.2019. The Corporate Debtor, in its reply, contended that it had already made substantial payments and that the Operational Creditor was not executing the works

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## Facts

M/s. Largess Engineering (Operational Creditor) filed a petition against M/s. Power Mech Projects Limited (Corporate Debtor) under Section 9 of the IBC, 2016, seeking initiation of CIRP. The Corporate Debtor subcontracted two work orders to the Operational Creditor for laying a 20' Dia LPG Pipeline for the Mundra Kandla Pipeline Project. The Operational Creditor claimed a default of Rs. 9,37,32,458/- as of 15.05.2022, including principal and interest, based on five unpaid invoices from 2019-2020. The alleged date of default was 15.12.2019. The Operational Creditor is a partnership firm and an MSME. The Corporate Debtor contended that it had already paid Rs. 9,33,57,976/- as of 03.07.2021 and that the Operational Creditor was not executing the works satisfactorily. The

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## Issues and analysis

### Issue 1: Whether there is an operational debt and default of an amount exceeding Rupees One Crore by the …

**Ratio:** An operational debt exists when there is a claim in respect of the provision of goods or

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**Reasoning:** The Tribunal observed that the Operational Debt claimed arose out of Work Order No.

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**Interpretation:** The Tribunal interpreted the evidence to determine the actual amount due,

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**Application:** The Tribunal found that even after excluding the disputed penalty amount, the

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** M/s. Largess…
- **Respondents:** M/s. Power Mech…; M/s. Power Mech…

## Timeline

- **2019-05-01 — Work Order I…**: Corporate Debtor issued Work Order I to Operational Creditor for mainline quantity of 15…
- **2019-07-11 — Invoice Perio…**: Start of the period for which five invoices…

## 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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