CIRP Bid Rejected Due to Pre-existing Dispute on Work Order | NCLAT

  • Blog|News|Insolvency and Bankruptcy Code|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 26 August, 2025

Latest from Taxmann

CIRP application rejected work order dispute

Case Details: Sudha Electrical vs. Leena Power-Tech Engineers (P.) Ltd. - [2025] 177 taxmann.com 308 (NCLAT- New Delhi)

Judiciary and Counsel Details

  • N. Seshasayee, Judicial Member
  • Arun Baroka, Technical Member
  • Chandra Shekhar Yadav & Astitva Srivastava, Advs. for the Appellant
  • Arvind Nayar, Sr Adv., Sinha Shrey Nikhilesh, Parth Davar, Naman Kapoor, Diskha Dadu, Ms Swastik Verma, Ms Nayan Dubey & Ms Faraaz Khan, Advs. for the Respondent

Facts of the Case

In the instant case, the appellant, an operational creditor, supplied electrical equipment, transformers, gensets, control panels and cables to the respondent, a corporate debtor. Invoices were raised for the same.

The respondent made part payment but failed to clear the balance. The appellant then issued a demand notice under Section 8 of the IBC. Since the respondent did not reply, the appellant filed an application under Section 9 to initiate CIRP.

The Adjudicating Authority dismissed the application on the ground that there was a pre-existing dispute between the parties regarding the debt and that CIRP was not maintainable in view of Section 10A.

It was noted that the respondent had admitted that the appellant had performed its contractual obligations at least partly, as otherwise no payment would have been made.

NCLAT Held

The NCLAT observed that even if the existence of debt is presumed, the appellant was required to establish that the debt had become due. Since the existence of the work order itself was in dispute, and unless this was first ascertained it would be difficult to conclude that the time for payment had arisen, the Adjudicating Authority was justified in dismissing the application.

List of Cases Reviewed

List of Cases Referred to

Tags:

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied

Leave a Reply

Your email address will not be published. Required fields are marked *

«
»

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied