Different Work Orders Can Be Clubbed To Satisfy The Minimum Threshold Under IBC: NCLT Mumbai Reiterates
The National Company Law Tribunal, Mumbai Bench, comprising Shri Kishore Vemulapalli (Judicial Member) and Shri Prabhat Kumar (Technical Member), while adjudicating an application under Section 9 of Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) in S. V. R Enterprises vs Netizen Engineering Private Limited has reiterated that debts arising from different work orders can be...
The National Company Law Tribunal, Mumbai Bench, comprising Shri Kishore Vemulapalli (Judicial Member) and Shri Prabhat Kumar (Technical Member), while adjudicating an application under Section 9 of Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) in S. V. R Enterprises vs Netizen Engineering Private Limited has reiterated that debts arising from different work orders can be clubbed to satisfy the minimum threshold limit.
Background Facts
S. V. R Enterprises (“Operational Creditor”) executed work contracts between 2007-2010 in relation to telecom cable laying, trenching etc for projects in Hyderabad developed by Netizen Engineering Private Limited (“Corporate Debtor”). The Operational Creditor submits that a sum of Rs. 1,09,73,819/- is pending on account of 33 invoices raised against the work done. It was further submitted that the Corporate Debtor acknowledged the debt vide an email dated 23.01.2015. The Operational Creditor issued a Demand Notice dated 30.12.2017 which was duly received by the Corporate Debtor.
On the contrary, it was submitted by the Corporate Debtor that the Operational Creditor refers to 33 work orders on the basis of which invoices were raised. However, the Operational Creditor has only annexed 13 work orders to the application. Further, the invoices on which the Operational Creditor is basing its claim have been raised on various entities. It was also submitted that the amount claimed is due under several invoices which pertain to diverse work orders. Combining multiple claims under different work orders is not permissible as it seeks to pursue multiple causes of action in one application.
Finding of the Tribunal
The Tribunal observed that debts arising from different work order(s) can be clubbed to satisfy the minimum threshold limit. Reliance was placed on the NCLAT judgment of M/s. A2 Interiors Products Pvt. Ltd. Vs. M/s. Ahluwalia Contracts (India) Ltd. (2021) SCC online NCLT 438 wherein it was held that separate claims can be part of single application.
The Tribunal further observed that although the invoices were raised in the years 2008-2011 and were payable within 21 days, the debt is not barred by limitation as the Corporate Debtor had deducted TDS on 15.07.2014 on two of its invoices the aggregate of which exceeded 1 lakh. Further, vide an Email dated 23.01.2015, the Corporate Debtor admitted the liability for various invoices which were claimed to have been received on and verified on 21.01.2015. Thus, the petition was filed within 3 years of 21.01.2015 and hence was not barred by limitation.
With the aforesaid observations, the Tribunal admitted the petition.
Case: S. V. R Enterprises vs Netizen Engineering Private Limited
Case No: CP (IB) No.88/MB-IV/2018
Counsels for the Applicants:Adv. Prachi Pandya a/w Adv. Monica Salian
Counsel for the Respondent :Adv. Anuj Desai a/w Adv. D. J. Kakalia i/b Mulla & Mulla