CIRP was to be admitted when corporate debtor admitted debt on various occasion and didn’t raise any dispute

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  • Last Updated on 21 October, 2021

Corporate insolvency resolution process - Operational debt

Case Details: Shapoorji Pallonji and Company (P.) Ltd. v. Shore Dwellings (P.) Ltd. - [2021] 131 89 (NCLAT - Chennai)

Judiciary and Counsel Details

    • M. Venugopal, Judicial Member and Kanthi Narahari, Technical Member
    • Vikas Mahendra, Adv. for the Appellant. 
    • M.S. Shyamsundar, Adv. for the Respondent.

Facts of the Case

In the instant case, the appellant-operational creditor entered into a construction contract with the respondent-corporate debtor under which the appellant was to carry out the construction works in the Residential Project Development.

The works for the project were duly carried out by the appellant and the respondent had issued a Virtual Completion Certificate certifying Project work completion. The appellant issued an application for the Final Payment Certificate (Final Bill) for a cumulative gross value of work done with the net payable amount calculated.

The Respondent, on the other hand, was required to pay the dues under the Final Bill to the appellant within 56 days of its issuance. However, despite several reminders by the appellant, and clear admission of liability, the respondent made no efforts towards making any payments.

Having not received any payments towards the acknowledged debt from the respondent, the appellant issued a statutory demand notice under section 8 of the Insolvency and Bankruptcy Code, 2016 seeking payment of the acknowledged debt.

However, the NCLT, even prior to issuing notice to the respondent, passed the impugned order dismissing the application by rejecting the claim of the appellant on the ground that the application was premature and there was no intent for insolvency resolution.


On appeal to NCLAT, it was stated that the respondent had admitted debt on various occasions and no dispute was raised prior to issuance of demand notice, and application of the appellant was complete and fulfilled criteria as contemplated under section 9 of the Insolvency and Bankruptcy Code, 2016. Consequently, the application was to be admitted and impugned order of NCLT was to be set aside.

Case Review

    • Shapoorji Pallonji & Co. (P.) Ltd. v. Shore Dwellings (P.) Ltd. [2021] 131 88 (NCLT – Beng.) (para 19) set aside

List of Cases Referred to

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