# In the matter of VR Rail Nirman Pvt. Ltd.

> NCLT judgment dated 2024-09-25. Citation: TCN-2024-NCLT-00552. The case involves an application filed by Isuzu Motors India Pvt Ltd (Operational Creditor)…

- **Court:** NCLT
- **Order date:** 25 Sept 2024
- **Citation:** TCN-2024-NCLT-00552
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vr-rail-nirman-pvt-ltd-2e28bbaa

## Summary

### Background

The case involves an application filed by Isuzu Motors India Pvt Ltd (Operational Creditor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against VR Rail Nirman (P) Ltd (Corporate Debtor). The Operational Creditor claimed a default in payment for scrap materials cleared from their plant based on an agreement dated 27.08.2015. The Corporate Debtor contested the application, arguing that there was a pre-existing dispute and lack of sufficient proof of debt and default. The Tribunal initially dismissed the application because the company was struck off, but it was later restored by the Operational Creditor.

## Facts

Isuzu Motors India Pvt Ltd (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against VR Rail Nirman (P) Ltd (Corporate Debtor). The basis of the application was an alleged default in payment for scrap materials cleared from the Operational Creditor's plant in Sri City, Andhra Pradesh. An agreement dated 27.08.2015 was in place between the parties, which was later extended. The Operational Creditor claimed that the Corporate Debtor defaulted on payments amounting to Rs. 13,70,502/- along with 22% interest per annum. The Corporate Debtor contested the application, arguing that the invoices relied upon by the Operational Creditor were self-serving and that

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## Issues and analysis

### Issue 1: Whether the Operational Creditor has provided sufficient proof of debt and default to initiate CIRP …

**Ratio:** Section 9 of the IBC, 2016 requires a 'strict proof' of 'Debt and Default' for the

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**Reasoning:** The Tribunal found that the Operational Creditor had not established the element of

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**Interpretation:** The Tribunal interpreted Section 9 of the IBC, 2016, as requiring a high

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**Application:** The Tribunal applied the ratio to the facts of the case, noting that the emails

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## Parties

- **Judges:** JYOTI KUMAR…; RAVICHANDRAN…
- **Appellants:** M/S. ISUZU MOTORS…
- **Respondents:** M/S. VR RAIL…

## Timeline

- **2015-08-27 — Agreement…**: Agreement entered into between Isuzu Motors India Pvt Ltd and VR Rail Nirman (P) Ltd for…
- **2016-10-11 — Operational Creditor's…**: Operational Creditor sent an email demanding Rs.…

## 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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