# In the matter of Ridhima Estates Pvt. Ltd.

> NCLT judgment dated 2023-10-31. Citation: TCN-2023-NCLT-00928. 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-00928
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ridhima-estates-pvt-ltd-142e474a

## 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 IBC, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against the Respondent for an alleged default in discharging a debt. The Petitioner claimed that the Respondent had approached them 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 Respondent allegedly defaulted on its obligations, leading to the application for CIRP.

## Facts

PRG Buildcon India Pvt Ltd (Petitioner) filed a petition against Ridhima Estates Pvt Ltd (Respondent) under Section 9 of the IBC, claiming a default on debt related to the supply of 30 Tippers/Dumpers. The Petitioner and Respondent entered into a Memorandum of Understanding (MoU) on 29.11.2018 for the supply of these vehicles for Rs.7.70 crores. 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 was to disburse Rs.4,60,78,227/- to the Financers and Rs.3,09,21,773/- to the Petitioner by February 2019. The Respondent defaulted on its obligations, leading to the Petitioner requesting payment. The Petitioner claimed the Respondent owed

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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 court reasoned that there was no clear evidence of a sale transaction between the

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**Interpretation:** The court interpreted Section 5(21) strictly, requiring clear and unambiguous

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**Application:** In this case, the court found that the Petitioner failed to provide sufficient

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## Parties

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

## Timeline

- **2018-11-29 — MoU Date…**: Memorandum of Understanding (MoU) entered into between PRG Buildcon India Pvt Ltd and…
- **2019-02-01 — Payment De…**: Deadline for Ridhima Estates Pvt Ltd to disburse Rs.4,60,78,227/- to Financers and…

## 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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