# In the matter of VA Tech Wabag Ltd.

> NCLT judgment dated 2022-09-27. Citation: TCN-2022-NCLT-00921. Xicon International Limited, an operational creditor, filed an application under Section 9 of…

- **Court:** NCLT
- **Order date:** 27 Sept 2022
- **Citation:** TCN-2022-NCLT-00921
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/va-tech-wabag-ltd-a3cb5ea0

## Summary

### Background

Xicon International 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, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The operational creditor claimed a sum of Rs.1,63,96,590/- which included principal and interest. The corporate debtor had approached the operational creditor for erection and supply of heavy oil storage tanks and placed purchase orders. Disputes arose regarding the completion of pending jobs and the payment of outstanding dues. A settlement agreement was executed between the parties on 02.10.2021, where the corporate debtor agreed to pay Rs.1,60,94,701/- in six installments. The corporate debtor made some

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## Facts

Xicon International Limited (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 against VA Tech Wabag Limited (Corporate Debtor). The claim was for Rs. 1,63,96,590/-. The Corporate Debtor had approached the Operational Creditor for erection and supply of heavy oil storage tanks, placing purchase orders. The Operational Creditor completed the work and raised invoices. Substantial payments remained outstanding. A settlement agreement was executed on 02.10.2021, where the Corporate Debtor agreed to pay Rs. 1,60,94,701/- in six installments. The Corporate Debtor paid Rs. 1,06,00,000/- in installments, with delays. The Operational Creditor accepted the delayed payments. The Operational Creditor then filed the application

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## Issues and analysis

### Issue 1: Whether the Operational Creditor is entitled to receive the amount under the Settlement Agreement …

**Ratio:** Clause 2 of the Settlement Agreement categorically states that the agreement shall not be

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**Reasoning:** The NCLT reasoned that even though Clause 6 of the Settlement Agreement stated that

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**Interpretation:** The interpretation of the settlement agreement hinges on whether the obligation

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**Application:** The NCLT applied the principle of reciprocal promises to the facts of the case,

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## Parties

- **Judges:** SANJIV…; RAVICHANDRAN…
- **Appellants:** Xicon Internationa…
- **Respondents:** V A Tech Wabag…

## Timeline

- **2015-01-22 — Purchase Orde…**: P.O. No. MBG-PO-16806/10P84 dated 22.01.2015 was issued, subsequently amended on…
- **2015-01-22 — Purchase Orde…**: P.O No. MBG-PO-16807/10P84, dated 22.01.2015, subsequently amended on 09.04.2015 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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