# In the matter of Ridhima Estates Pvt. Ltd.

> NCLT judgment dated 2023-10-31. Citation: TCN-2023-NCLT-00971. The case involves a Company Petition (IB/162/2021) filed by PRG Buildcon India Pvt Ltd…

- **Court:** NCLT
- **Order date:** 31 Oct 2023
- **Citation:** TCN-2023-NCLT-00971
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ridhima-estates-pvt-ltd-0a2e7cbc

## Summary

### Background

The case involves a Company Petition (IB/162/2021) filed by PRG Buildcon India Pvt Ltd (Petitioner) against Ridhima Estates Pvt Ltd (Respondent) under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. The Petitioner sought to initiate Corporate Insolvency Resolution Process (CIRP) against the Respondent for alleged default in discharging a debt. The Respondent had approached the Petitioner for the supply of 30 Tippers/Dumpers for a total consideration of Rs.7.70 crores, leading to a Memorandum of Understanding (MoU) dated 29.11.2018. The vehicles were originally bought by the Petitioner under financing agreements with Tata Motors Finance Limited, SREI Equipment Finance Limited & Kotak Mahindra Bank. The Respondent allegedly defaulted on its obligations,

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## Facts

PRG Buildcon India Pvt Ltd (Petitioner) and Ridhima Estates Pvt Ltd (Respondent) are companies owned by two brothers, Guniganti Prabhakar Rao and Guniganti Ravinder Rao, respectively. The Petitioner acquired 30 Tippers/Dumpers between May-July 2017 under a financing arrangement. The invoice value of these Tippers/Dumpers was Rs.10,28,61,280/-, and the agreed value was Rs.7,70,00,000/-. On 29.11.2018, the Petitioner handed over 20 Tippers/Dumpers to the Respondent, followed by another 10 Tippers/Dumpers on 11.12.2018 and 21.12.2018. The Respondent paid Rs.4,45,90,627/- as principal and Rs.73,82,188/- towards bank interest, totaling Rs.5,19,72,815/-. The Petitioner claimed Rs.3,89,21,561/- as receivable from the Respondent. The Respondent acknowledged a sum of

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## Issues and analysis

### Issue 1: Whether the transaction between PRG Buildcon India Pvt Ltd and Ridhima Estates Pvt Ltd constitutes …

**Ratio:** Section 5(21) of the IBC defines 'operational debt' as a claim in respect of the

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**Reasoning:** The Tribunal observed that there was no formal agreement or invoice evidencing the sale

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**Interpretation:** The interpretation of Section 5(21) requires a clear and unambiguous

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**Application:** In this case, the absence of a formal agreement and invoice, coupled with the

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** PRG Buildcon…
- **Respondents:** Ridhima Estates…

## Timeline

- **2017-05-01 — Acquisition of…**: Petitioner acquired 30 Tipper/Dumpers between…
- **2018-11-29 — Handing over of…**: Petitioner handed over 20…

## 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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