M/s Varaha Infra Limited vs M/s Ramapati Infra Pvt. Ltd.

The present Petition has been filed by M/s Varaha Infra Limited ('Operational Creditor'/ 'Petitioner') seeking to initiate Corporate Insolvency Resolution Process ('CIRP') against M/s Ramapati Infra Private Limited ('Corporate Debtor'/ 'Respondent') under Section 9 of the Insolvency and Bankruptcy Code, 2016 ('IBC' / 'Code') read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 ('Rules').

The Applicant, M/s Varaha Infra Limited, is engaged in the business of Construction and development of highways and bridges across the country. The registered office of the Petitioner is located at 06, Jalam Vilas Scheme, Paota B Road, Jodhpur, Rajasthan. The Petitioner has alleged default on the part of the Corporate Debtor for non-payment of operational dues amounting to Rs. 1,66,78,000/- (Rupees One Crore Sixty-Six Lakh Seventy-Eight Thousand Only) inclusive of interest @18%.

The Respondent, M/s Ramapati Infra Private Limited, is a private limited company incorporated on 07.12.2016, having CIN: U45309RJ2016PTC056487, is registered with the Registrar of Companies, Jaipur. The Respondent’s office is situated at 218-219, Opposite Rajasthan Patrika, Manji Ka Hattha, Paota, Jodhpur. The Respondent has an Authorised Share Capital of Rs. 3,00,00,000/- (Rupees Three Crore Only) and Paid-Up Share Capital of Rs. 3,00,00,000/- (Rupees Three Crore Only).

The details of the transactions leading to the filing of this Petition as averred by the Petitioner are as follows:

It is submitted that an infrastructure builder, namely Dinesh Chandra R. Agrawal Infracon Pvt. Ltd., was awarded a contract for the construction of highway work from Jalandhar to Amritsar (NH-01) (‘Project’). The awarded work was sub-let to the Corporate Debtor vide Letter/Work Order dated 13.04.2017.

Thereafter, the Corporate Debtor further sub-let the ‘Earth Work’ component of the Project to the Petitioner under certain terms and conditions for a total value of Rs. 10,28,00,000/- vide Letter/Work Order dated 25.09.2017.

The aforementioned work, for which the invoices were raised was duly completed by the Operational Creditor in accordance with the work order. No complaint was ever raised by either the Corporate Debtor or the main contractor regarding the same.

In consideration of the work sub-let by the Corporate Debtor, the Petitioner raised the following tax invoices:

a. Invoice dated 31.10.2017 for Rs. 29,46,429/- (Invoice No. 1);

b. Invoice dated 31.12.2017 for Rs. 1,05,08,929/- (Invoice No. 2).

It is further submitted that, due to non-payment of the raised invoices the Petitioner stopped work after serving notice dated 18.04.2018 upon the Corporate Debtor. Out of the total outstanding amount of Rs. 1,37,00,000/-, the Corporate Debtor last made a partial payment of Rs. 28,00,000/- on 21.02.2021. The Corporate Debtor remains liable for the balance amount of Rs. 1,09,00,000/- as per the invoices raised by the Operational Creditor.

The Petitioner issued a notice dated 18.04.2018 to the Corporate Debtor, informing it that work would be stopped if payment was not received by the specified deadline. Subsequently, another letter dated 31.03.2022 was sent to the Corporate Debtor demanding full payment in accordance with the work order. In response, the Corporate Debtor replied via letter dated 15.04.2022, assuring that the remaining payment would be made within 30 days.

However, even after repeated reminders and requests no payment was made qua the outstanding amount. Thus, the Petitioner issued a Demand Notice dated 31.03.2024 under the Code demanding payment of the unpaid operational debt due from the Corporate Debtor. Further, on perusal of records it transpires that no reply to the Demand Notice has been given by the Corporate Debtor.

The relevant details as reflected in Part IV of the Petition are as follows:-

Consequent to the notice issued by this Adjudicating Authority, the Corporate Debtor filed its Reply vide Dairy No. 432/2025 dated 28.02.2025, stating as follows:

The Respondent at the outset submits that the contents of the Petition in their entirety are denied as being false, misleading, and unsustainable in law.

The Respondent admitted that a ‘Letter of Award’ dated 25.09.2017 was awarded by the Respondent to the Petitioner in reference to the construction, development, and procurement for NH-1 in the State of Punjab. Also, the said contract was a back-to-back contract between the parties which was dependent on the main contract dated 13.04.2017 between the Respondent and Dinesh Chandra R. Agrawal Infracon Pvt. Ltd.

Further, it is submitted that the invoices referred by the Petitioner in the Petition were never received by the Respondent. Further, the Petitioner has not placed on record any document so as to show how the same were sent/ exchanged between the parties.

The Respondent contends that no details have been provided regarding the amount to be paid, the amount already paid, cheques issued, replies to emails, and other related information. Furthermore, the Petitioner has failed to place on record the bank statements demonstrating that the Respondent paid all amounts due to the Petitioner including the payment of Rs. 28 lakhs, which was made as full and final settlement of the outstanding dues.

It is stated that there exists a genuine and a real dispute between the parties. As, it can be seen from the emails that various disputes have existed between the parties such as: how much amount is due, what was the scope of work, what was the work done by the Petitioner. Further, the amount to be paid by each entity, interest calculations etc.

The letter dated 22.02.2021 sent by the Respondent to the Petitioner cannot be treated as admission or acknowledgement of debt as the amount stated was already provided by way of cheques and latter on RTGS payments.

Respondent contends that the documents annexed along with the Petition indicates that there is a clear dispute that the iron bars supplied by the Petitioner were of poor quality and did not meet the agreed specifications.

Further, it is submitted that this Tribunal has no jurisdiction to decide the present controversy between the parties, as the terms and conditions of letter of intent and letter of award provides that any dispute between the parties shall be settled through Arbitration and the courts at Ahmedabad or Jodhpur shall have jurisdiction.

This Adjudicating Authority has perused all the relevant papers and found them in order. The Registered Office of the Corporate Debtor is situated in the state of Rajasthan. Therefore, this Adjudicating Authority has the jurisdiction to entertain this Petition. Further, this matter is within the purview of the Laws of Limitation, as the default arose in 2022, and the Petition was filed before this Adjudicating Authority in 2024. Hence, the period of three years after the default occurred had not been exhausted at the time of filing this Application.

Before we proceed with the facts of the present case, the statutory framework regarding the Application under Section 9 of the Code needs to be recapitulated. An application under Section 9 of the Code can only be filed after the delivery of a demand notice as provided under Section 8 of the Code. Section 8 of the Code requires the Operational Creditor, upon the occurrence of default, to deliver a Demand Notice for unpaid Operational Debt. Furthermore, Section 8(2) specifies that the Corporate Debtor must, within 10 days of receiving the Demand Notice, inform the Operational Creditor of any existing dispute.

Under Section 9(1), if Operational Creditor does not receive payment from the Corporate Debtor or notice of the dispute under Sub-section (2) of Section 8, may file an Application under Section 9(1) of the Code.

Section 9(1) is as follows:

Section 9(5)(ii) is as follows:

In Mobilox Innovations Private Limited Vs Kirusa Software Private Limited, para 34, the Hon’ble Supreme Court laid down the conditions precedent for triggering the CIRP under Section 9 of the Code. Para 34 is as follows: -

Therefore, to initiate the Corporate Insolvency Resolution Process (CIRP) in this matter, the following conditions must be satisfied. In the present Application, it is admitted fact that a 'Letter of Award' dated 25.09.2017 was issued by the Respondent to the Petitioner in relation to the construction, development and procurement of NH-1 in the State of Punjab. Subsequently, in consideration of the work sub-let by the Corporate Debtor, the Petitioner raised invoices dated 31.10.2017 for ₹29,46,429/- and 31.12.2017 for ₹1,05,08,929/-.

However, due to non-payment of invoices amounting to Rs. 1,37,00,000 raised by the Petitioner. The Petitioner issued a notice dated 18.04.2018 to the Corporate Debtor, informing it that work would be stopped if payment was not received by the specified deadline. In response, the Corporate Debtor made a partial payment of Rs. 28,00,000/-. Consequently, a balance of ₹1,09,00,000/- remains outstanding as per the invoices submitted by the Petitioner.

Further, another letter dated 31.03.2022 was sent by the Petitioner to the Corporate Debtor demanding full payment in accordance with the work order. In response, the Corporate Debtor replied via letter dated 15.04.2022, assuring that 'we hereby promise to clear your entire overdue amount within a period of 30 days from this date'. Hence, it is clear that there was a debt which had become due and payable by the Corporate Debtor towards the Operational Creditor.

The Corporate Debtor, in its reply, has raised a pre-existing dispute concerning the poor quality of bars and scope of work. However, there is no correspondence provided to substantiate these claims. The defences raised by the Corporate Debtor appears to be an afterthought in response to the Petition filed before this Authority. Hence, no pre-existing dispute exists between the parties.

It has been well established that under Section 9 of the Code, to initiate CIRP proceedings, the Petitioner must prove that the debt is due, has not been paid, and is undisputed. In this case, it has been demonstrated that the Corporate Debtor has failed to make payment of the amount specified in the statutory notice to date. Additionally, no correspondence has been provided that substantiates the Corporate Debtor's claims regarding the poor quality of bars and scope of work. Thus, all conditions under Section 9 of the Insolvency and Bankruptcy Code (IBC) are satisfied. Therefore, we are inclined to initiate CIRP for the Corporate Debtor, as all requirements of Section 9 of the Code have been satisfied.

Further, we hereby appoint Mr. Kuldeep Kumar Gupta having registration no IBBI/IPA-001/IP-P-02570/2021-2022/13943 as Interim Resolution Professional of the Corporate Debtor from the available list of panel of Resolution Professionals as maintained by IBBI to conduct the Insolvency Resolution Process as mentioned under the Insolvency and Bankruptcy Code, 2016. The email address of the IRP is '[email protected]'.

The IRP is directed to take all such steps as are required under the statute, inter-alia in terms of Sections 15, 17, 18, 19, 20 and 21 of the Code and transact proceedings with utmost dedication, honesty and strictly in accordance with the provisions of the Code, and Rules and Regulations thereunder. It is directed to the Interim Resolution Professional /Resolution Professional to check the genuineness of the claim while admitting the operational dues of the Applicant.

Consequences of initiation of CIRP shall be inter-alia as follows:

The IRP appointed by the Adjudicating Authority, is directed to take over the affairs of the Corporate Debtor and duties as required to be performed by him under the provisions of Code including issue of publication in widely circulated Newspapers as contemplated under the provisions of the Code and calling for claims from the creditors of the Corporate Debtor; and collation of the same shall be done.

Further, as a sequel of admission, moratorium as envisaged under Section 14 of the Code is invoked in relation to the Corporate Debtor which will be in vogue during the CIRP of the Corporate to Debtor. The IRP shall carry out CIRP strictly as per the timelines specified and as envisaged under the provisions of the Code in relation to the Corporate Debtor.

The said IRP shall act strictly in accordance with the provisions of the Code. This Bench also directs for an advance payment of Rs. 1,00,000/- (Rupees One Lakh only) to be paid by the Petitioner to the Interim Resolution Professional immediately to initiate the process which shall be adjusted towards the expenses payable to the Resolution Professional. In terms of Section 17 and 19 of the Code all personnel of the Corporate Debtor including promoters and Board of Directors, whose powers shall stand suspended, shall extend all cooperation to the IRP during his tenure as such and the management of the affairs of the Corporate Debtor shall vest with the IRP.

The Registry is directed that this Order shall be communicated within three days from the date of passing of this Order to the Applicant, Corporate Debtor as well as the IRP appointed by this Adjudicating Authority to carry out CIRP. A copy of this order shall also be communicated to IBBI for its records.

Accordingly, CP No. (IB)-52/9/JPR/2024 is admitted.

The Registry is directed immediately to send a soft copy of the instant Application along with this order to the parties along with the IRP appointed herein.