# In the matter of Telangana Rajiv Swagruha Corporation Limited

> NCLT judgment dated 2023-12-07. Citation: TCN-2023-NCLT-00361. The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code…

- **Court:** NCLT
- **Order date:** 7 Dec 2023
- **Citation:** TCN-2023-NCLT-00361
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/telangana-rajiv-swagruha-corporation-limited-a8a917b6

## Summary

### Background

The case involves an application filed under Section 9 of the Insolvency and Bankruptcy Code (IBC) by Mr. K. Lakshma Reddy (operational creditor/applicant) against M/s. Telangana State Rajiv Swagruha Corporation (corporate debtor/respondent) for initiating Corporate Insolvency Resolution Process (CIRP). The operational creditor was awarded a tender for the construction of 57 Intrinsic (B-Type) Duplex Houses under the Rajiv Swagruha Scheme. Several supplementary agreements were executed to revise the scope of work and address issues like land possession and price escalation. Disputes arose regarding payments, with the operational creditor claiming outstanding dues and interest, while the corporate debtor contended that all payments had been made, including excess

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## Facts

M/s. K. Lakshma Reddy, a contractor, filed an application under Section 9 of the IBC to initiate CIRP against M/s. Telangana State Rajiv Swagruha Corporation Limited. The case stems from a contract awarded to Reddy for constructing houses under the Rajiv Swagruha Scheme. The initial agreement was dated 29.10.2009, for the construction of 57 duplex houses. Subsequent supplementary agreements were executed, modifying the scope of work and addressing issues related to land possession and price escalation. The operational creditor claims that the corporate debtor failed to make full payments, including price escalations, resulting in outstanding dues of Rs. 1,56,43,692.41 towards principal and Rs. 1,87,22,430.89 towards interest. The corporate debtor contends that all

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## Issues and analysis

### Issue 1: Whether the applicant qualifies as an …

**Ratio:** An 'operational creditor' is defined as a person to whom an operational debt is owed. An

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**Reasoning:** The court reasoned that the applicant constructed flats for the corporate debtor.

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**Interpretation:** The interpretation of 'operational debt' requires a direct nexus to the

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**Application:** Since the applicant's claim arises from the construction of flats and not the

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** K Lakshma…
- **Respondents:** Telangana State…

## Timeline

- **2009-10-29 — Original Ag…**: Agreement between M/s.A.P.Rajiv Swagruha Corporation Ltd. and Mr. K. Lakshma Reddy for…
- **2009-07-29 — Joint Inspecti…**: Joint inspection report…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3(11) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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