NCLT admitted an insolvency application of ₹5.14 crore against SBCC Infra, holding that railway construction dues were substantiated by documentary evidence and no pre-existing dispute was established.
NCLT Admits ₹5.14 Crore Insolvency Application Against SBCC Infra
The National Company Law Tribunal (NCLT) has admitted a corporate insolvency resolution process (CIRP) application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, filed for an unpaid debt of ₹5.14 crore owed by SBCC Infra. The claim arose from defaulted dues related to railway construction projects, which the adjudicating authority found supported by documentary evidence.
The NCLT held that the financial creditor had successfully demonstrated the existence of a default through records including invoices, payment demands, and acknowledgments. Notably, the corporate debtor failed to prove a pre-existing dispute as required under Section 8 and Rule 7 of the IBC Rules. The tribunal emphasized that mere assertions of dispute without contemporaneous documentary support do not bar admission under Section 7.
"The record shows outstanding dues exceeding the statutory minimum, supported by official correspondence and financial statements. No credible evidence of a pre-existing dispute has been placed on record,"
The tribunal's decision reaffirms the established jurisprudence under Micro Inks Ltd. v. Union of India that disputes must be 'real, substantial, and existing' at the time of the insolvency application. Practitioners must ensure that any claim of pre-default dispute is backed by independently verifiable documentation. This ruling underscores the importance of robust record-keeping in infrastructure and public project financing.
Citations
- Insolvency and Bankruptcy Code, 2016, Section 7
- Insolvency and Bankruptcy Code, 2016, Rule 7
- Micro Inks Ltd. v. Union of India (2018) 4 SCC 707
