# In the matter of VA Tech Wabag Limited CP-IB-329-CHE-2021

> NCLT judgment dated 2022-07-18. Citation: TCN-2022-NCLT-01675. Nitya Electrocontrols Private Limited, an operational creditor, filed an application under…

- **Court:** NCLT
- **Order date:** 18 Jul 2022
- **Citation:** TCN-2022-NCLT-01675
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/va-tech-wabag-limited-cp-ib-329-che-2021-c6f08455

## Summary

### Background

Nitya Electrocontrols Private Limited, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 against VA Tech Wabag Limited, the corporate debtor, to initiate the Corporate Insolvency Resolution Process (CIRP). The operational creditor claimed a total sum of Rs. 3,45,40,099, including interest at 18% p.a. The claim arose from the supply of electrical goods and services to a consortium project led by Tecpro Systems Limited, which later changed leadership to VA Tech Wabag Limited. The operational creditor contended that despite supplying goods and services, and repeated assurances, the corporate debtor failed to pay the outstanding dues. The corporate debtor argued that the claim was time-barred under the Limitation Act,

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## Facts

Nitya Electrocontrols Private Limited (Operational Creditor) supplied electrical goods and services to a consortium project for Kakatiya Thermal Power Project. The initial contract was awarded to Andhra Pradesh Power Generation Corporation Limited (APGENCO). Tecpro Systems Limited was the initial leader of the consortium, which included VA Tech Wabag Limited (Corporate Debtor) and Gammon India Limited. Tecpro issued purchase orders to Nitya Electrocontrols. Tecpro faced financial difficulties and requested TSGENCO (formerly APGENCO) to directly release payments to Nitya Electrocontrols. TSGENCO made some direct payments. Nitya Electrocontrols claimed an outstanding balance of Rs. 2,11,83,607/- from the initial supplies. The consortium leadership changed from Tecpro to

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## Issues and analysis

### Issue 1: Whether the application filed by the Operational Creditor under Section 9 of the IBC, 2016 is …

**Ratio:** The principle of limitation dictates that legal proceedings must be initiated within a

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**Reasoning:** The NCLT observed that the last payment made by the Corporate Debtor was on April 30,

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**Interpretation:** The interpretation of the Limitation Act requires strict adherence to the

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**Application:** The NCLT applied the principle of limitation to the facts of the case. Since

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## Parties

- **Judges:** S. Ramath…; SAMEER…
- **Appellants:** Nitya Electrocontr…
- **Respondents:** V A Tech Wabag…

## Timeline

- **2013-12-06 — Purchase…**: Tecpro Systems Limited issued Purchase Order No. E10894001355 to Nitya Electrocontrols…
- **2014-05-31 — Change in Consortium…**: TSGENCO removed Tecpro as the leader of the consortium and appointed VA Tech Wabag…

## 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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