# In the matter of Consolidated Construction Consortium Limited 
Vs. Hitro Energy Solutions Private Limited Civil Appeal No 2839 of 2020

> SC judgment dated 2022-02-04. Citation: TCN-2022-SC-00073. The appeal arises from a judgment and order of the National Company Law Appellate Tribunal (NCLAT)…

- **Court:** SC
- **Order date:** 4 Feb 2022
- **Citation:** TCN-2022-SC-00073
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/consolidated-construction-consortium-limited-vs-hitro-energy-solutions-private-l-0a66a2a4

## Summary

### Background

The appeal arises from a judgment and order of the National Company Law Appellate Tribunal (NCLAT) which reversed the decision of the National Company Law Tribunal (NCLT), Chennai. The NCLT had admitted an application filed by the appellant under Section 9 of the Insolvency and Bankruptcy Code (IBC) for the initiation of the Corporate Insolvency Resolution Process (CIRP) against the respondent. The NCLAT set aside the NCLT's decision, dismissing the application and releasing the respondent from the ongoing CIRP. The core issue revolves around whether the appellant qualifies as an operational creditor under the IBC, whether the respondent took over the debt from a proprietary concern, and whether the application under Section 9 is barred by limitation.

## Facts

The appellant, Consolidated Construction Consortium Limited, was engaged in a project with Chennai Metro Rail Limited (CMRL). CMRL placed an order for light fittings, and the appellant placed orders with a Proprietary Concern, which was the supplier of Thorn Lighting India Private Limited. CMRL paid Rs 50,00,000 to the Proprietary Concern as an advance on the appellant's order. CMRL later terminated its project with the appellant. The Proprietary Concern encashed the cheque for Rs 50,00,000. The appellant paid Rs 50,00,000 to CMRL. The respondent, Hitro Energy Solutions Private Limited, was incorporated with one of its main objects being to take over the Proprietary Concern. The appellant requested the Proprietary Concern to refund the amount, but the Proprietary

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## Issues and analysis

### Issue 1: Whether the appellant is an operational creditor …

**Ratio:** Section 5(21) of the IBC defines 'operational debt' as a claim in respect of the

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**Reasoning:** The court reasoned that the definition of 'operational debt' does not restrict the

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**Interpretation:** The phrase 'in respect of' in Section 5(21) should be interpreted broadly to

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**Application:** The appellant sought an operational service from the Proprietary Concern when

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## Parties

- **Judges:** Dr Justice…; SURYA…; +1 more
- **Appellants:** M/s. Consolidated…
- **Respondents:** M/s. Hitro Energy…
- **Other parties:** Over Tu…

## Timeline

- **2013-06-24 — Purchase…**: Appellant placed orders with the Proprietary…
- **2013-11-07 — Cheque I…**: CMRL issued a cheque of Rs 50,00,000 to the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 62 — Appeal to Supreme Court](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-62)

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