Authority: National Company Law Tribunal, Ahmedabad Bench (Court-II)

Order Date: 06 July 2026

Case Overview

The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by operational creditor Vanshita Transport (a sole proprietorship MSME) against corporate debtor Montecarlo Limited (CIN: U40300GJ1995PLC025082) on 23 June 2025. The operational creditor claimed an unpaid operational debt of ₹1,47,83,503 (including interest of ₹6,87,298) for transportation services provided between 08 November 2022 and 25 November 2024 based on work orders dated 11 July 2022 and 01 April 2024. A demand notice was issued on 19 December 2024 with the first date of default mentioned as 23 November 2024.

The corporate debtor contested the application, alleging the debt was disputed and tainted with fraud and criminality. Montecarlo claimed that the applicant, in conspiracy with a former employee (Mr. Pragneshkumar Manubhai Patel), charged inflated rates (₹1.90-2.25/km/MT vs market rate of ₹1.69/km/MT) and claimed payment for exaggerated distances, resulting in an alleged loss of ₹491.07 lakhs to the company. The respondent had filed a police complaint at Bodakdev Police Station on 24 December 2024 and initiated arbitration proceedings under Section 11 of the Arbitration and Conciliation Act, 1996 before the Gujarat High Court after the matter was listed in NCLT.

The tribunal examined whether a pre-existing dispute existed and found that the corporate debtor had not raised any objections during the billing cycle or prior to the demand notice. The dispute was communicated only in response to the demand notice dated 01 January 2025. The tribunal noted that the police complaint was filed against the former employee only, not against the applicant, and that the work order clause 2.8 required payment of undisputed amounts while holding disputed amounts until resolution.

Final Outcome

The tribunal admitted the application and initiated Corporate Insolvency Resolution Process (CIRP) against Montecarlo Limited. A moratorium was declared under Section 14(1) of IBC 2016 prohibiting: (a) institution or continuation of suits/ proceedings against the corporate debtor; (b) transferring, alienating or disposing of assets; (c) any action to foreclose, recover or enforce security interest; and (d) recovery of any property by owner/lessor. The moratorium will remain effective until completion of CIRP or approval of resolution plan or liquidation order.

Mr. Sanjay Jitendralal Shah (Registration No. IBBI/IPA-001/IP-P-01915/2020-2021/13096) was appointed as Interim Resolution Professional (IRP) to conduct the CIRP. The operational creditor was directed to pay an advance of ₹2,00,000 to the IRP within two weeks for smooth conduct of CIRP. The IRP was authorized to take full charge of the corporate debtor's assets and documents, with police assistance if required, and to make public announcement of CIRP initiation.

Topics: Insolvency Proceedings, Operational Debt, Fraud Allegations