# In the matter of VGS Realty Construction Private Limited

> NCLT judgment dated 2024-08-14. Citation: TCN-2024-NCLT-00784. Life Construction Private Limited filed a Company Petition under Section 9 of the Insolvency…

- **Court:** NCLT
- **Order date:** 14 Aug 2024
- **Citation:** TCN-2024-NCLT-00784
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vgs-realty-construction-private-limited-eaae8b85

## Summary

### Background

Life Construction Private Limited filed a Company Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against VGS Realty Construction Private Limited, claiming an operational debt of Rs. 19,63,46,629/- with the date of default being 15th March 2019. The Operational Creditor provided construction services to the Corporate Debtor based on work orders, raising invoices between December 2014 and March 2019, totaling Rs. 78,57,01,345/-. The Corporate Debtor made partial payments, leaving a balance unpaid.

## Facts

Life Construction Private Limited (Operational Creditor) provided construction services to VGS Realty Construction Private Limited (Corporate Debtor) under various work orders. Invoices were raised between December 2014 and March 2019, totaling Rs. 78,57,01,345/-. The Corporate Debtor made partial payments of Rs. 55,99,97,609/-, leaving a balance of Rs. 19,63,46,629/- outstanding. The date of default is 15th March 2019. The Operational Creditor issued a demand letter on 15th March 2022, seeking payment of Rs. 23,07,03,736/- along with interest. 'Resonant Realtors Project Private Limited' made a part payment of Rs. 50,00,000/- on behalf of the Corporate Debtor on 23rd March 2022. A Demand Notice was issued on 13th May 2022, directing the Corporate Debtor to pay Rs.

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted on its …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016 allows an operational creditor to

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**Reasoning:** The NCLT observed that the Corporate Debtor had admitted the liability to the Operational

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**Interpretation:** The legal principle is that if a debt is admitted and remains unpaid, a default

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**Application:** The Corporate Debtor's admitted liability and failure to pay the outstanding

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## Parties

- **Judges:** Reeta K…; Madhu S…
- **Appellants:** Life Construction…
- **Respondents:** VGS Realty…

## Timeline

- **2014-12-01 — Invoice Perio…**: Invoices were raised…
- **2019-03-15 — Invoice Period End &…**: Last invoice raised on 15th…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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