NCLT Admits Sadbhav Engineering For Insolvency Resolution

India’s National Company Law Tribunal (NCLT) admitted Sadbhav Engineering Ltd. for insolvency resolution following a petition by the company’s operational creditor S.S. Infra.

The NCLT bench, comprising Judicial Member Shammi Khan and Technical Member Sameer Kakar, passed the order admitting the Ahmedabad-based infrastructure company for insolvency resolution on 22 April, the tribunal order showed.

The development came after Haryana-based S.S. Infra initiated the corporate insolvency resolution process (CIRP) against Sadbhav Engineering in October 2021 under Section 9 of the Insolvency and Bankruptcy Code (IBC), claiming a default of about four crore rupees ($479,656) related to a previously completed work.

Founded in 1988 by Vishnubhai Patel, Sadbhav Engineering is involved in the construction and development business, according to its website.

THE BACKGROUND

Sadbhav Engineering had awarded S.S. Infra a work order in 2016.

The order was for shifting electrical utilities upto 33 kV under Uttar Haryana Bijli Vitran Nigam Ltd. (UHBVNL) and fixing with all new material as per approved estimates of UHBVNL and National Highways Authority of India (NHAI) at four lanning of Yamuna Nagar-Panchkula section of National Highway 73 in Haryana state.

S.S. Infra completed the work as per the order and raised the running bills from time to time. UHBVNL also issued various completion certificates in respect of the work done by the operational creditor.

Sadbhav Engineering paid S.S. Infra a total sum of 26.43 crore rupees but a sum of 3.97 crore rupees remained payable.

Despite repeated request, the company failed to clear the dues, promoting S.S. Infra to initiate CIRP against Sadbhav Engineering on 18 October 2021.

THE VERDICT

The tribunal said the application is complete in terms of Section 9 of the IBC and S.S. Infra has proved that outstanding operational debt is more than one crore rupees and Sadbhav Engineering defaulted in payment of the same.

The petition meets the threshold limit as per section 4 of the IBC and is well within the limitation for filing the present application, it added.

“Accordingly, the application filed under section 9 of the Insolvency and Bankruptcy Code for initiation of corporate insolvency resolution process against the respondent/corporate debtor deserves to be admitted,” the NCLT ruled.

The tribunal also appointed Sanjay Kumar Agarwal as the interim resolution professional of Sadbhav Engineering and asked him to take necessary action. It also directed Agarwal to take full charge of the company’s assets and documents without any delay.

Note: $1 = 83.3931 Indian rupees

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