Tribunal finds no clear contractual nexus or crystallised operational debt; pre-existing disputes and common work-sharing arrangement cited as key reasons for dismissal.
In a significant decision delivered on October 1, 2026, the National Company Law Tribunal (NCLT), New Delhi Bench, dismissed the corporate insolvency resolution process (CIRP) petition filed by M/s Redpro Construction Pvt. Ltd. (Applicant) against M/s Skyline Infratech Pvt. Ltd. (Respondent) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC). The Applicant had sought initiation of CIRP against the Respondent for an alleged outstanding operational debt of Rs. 1,40,96,295 along with interest.
The case revolved around the execution of civil, structural, electrical, plumbing, and firefighting works at the Kensington Boulevard Project, Noida, awarded by M/s Jaiprakash Associates Limited (JAL). Redpro Construction claimed that Skyline Infratech had defaulted in payment against invoices raised pursuant to three work orders dated August 25, 2017, issued by Skyline on a back-to-back basis corresponding to contracts with JAL.
However, the Tribunal found critical deficiencies in the Applicant's case. It was noted that the invoices relied upon by Redpro referred to separate agreements dated September 29, 2017, and November 11, 2017, with JAL, which were not placed on record. The work orders issued by Skyline, on which the Applicant relied, referred to different agreements dated July 17, 2017. This lack of documentary contractual linkage led to the conclusion that the Applicant failed to establish a clear contractual nexus between the invoices and the work orders.
Furthermore, the Tribunal observed that the work orders contained a handwritten stipulation that the works would be transferred to a new company jointly held equally by directors of both Redpro and Skyline, indicating a common work-sharing commercial arrangement rather than an independent debtor-creditor relationship. Correspondence with JAL and inter-party communications demonstrated coordinated project execution, joint handling of billing, payments, deployment of resources, and dispute resolution efforts.
Importantly, there existed pre-existing disputes much prior to issuance of the demand notice regarding certification of running account bills, deductions, quality of work, measurement, and reconciliation. Emails exchanged between the parties and with JAL reflected unresolved issues over billing and performance. The Tribunal applied the precedent established in the Supreme Court judgment of Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd., holding that the existence of a plausible dispute, supported by contemporaneous material, disqualified the claim from being admitted under Section 9.
Additionally, inconsistencies in the Applicant's own financial records, including discrepancies between ledger entries and invoices, and unexplained adjustments, cast further doubt on the existence and quantum of the debt claimed. The Tribunal also addressed procedural objections raised by Skyline regarding service of the demand notice.
Earlier, the Tribunal had dismissed the petition on grounds related to Section 10A of the IBC, but this order was set aside by the National Company Law Appellate Tribunal (NCLAT), which remanded the matter back for fresh consideration.
After a comprehensive analysis of facts, documents, and legal principles, the NCLT concluded that the Applicant failed to demonstrate an undisputed operational debt due and payable by the Respondent. The Tribunal emphasized that the case portrayed a common commercial work-sharing arrangement, and not a straightforward operational creditor-debtor relationship.
Consequently, the petition filed under Section 9 of the Insolvency and Bankruptcy Code was dismissed, underscoring the importance of establishing a clear contractual nexus and absence of disputes before invoking insolvency proceedings.
Bottom Line:
Insolvency and Bankruptcy Code, 2016 - Section 9 application by alleged operational creditor dismissed - Applicant failed to establish clear contractual nexus showing that invoices had crystallised into an operational debt due and payable by Corporate Debtor - Material on record indicated common work-sharing commercial arrangement and pre-existing dispute regarding billing, certification, deductions, measurement and reconciliation - Defence satisfied test in Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd.
Statutory provision(s):
Insolvency and Bankruptcy Code, 2016 - Sections 5(20), 5(21), 8, 9, 10A
