Case Details

Case Name: M/s. SS Rail Works Pvt. Ltd. vs. M/s. VNR Infrastructure Limited (under liquidation)

Court/Authority: National Company Law Tribunal, Hyderabad Bench-II

Case Number: IA No.44 of 2022 in C.P.(IB).No.12/10/HDB/2017

Date of Order: 20 May 2026

Period of Dispute: Relates to subcontract work executed from 2015 onwards, with payments made between 2015-2018

Parties Involved

Petitioner/Applicant: M/s. SS Rail Works Pvt. Ltd., represented by its Chief Executive Officer Mr. A. Srinivasulu Reddy

Respondent: M/s. VNR Infrastructure Limited (under liquidation), represented by its Liquidator Mr. T.S.N. Raja

Regulatory Body: National Company Law Tribunal, Hyderabad Bench-II

Key Officials: Hon'ble Member (Judicial) Shri Rajeev Bhardwaj, Hon'ble Member (Technical) Shri Sanjay Puri

Issues / Allegations / Violations

The Applicant alleged that VNR Infrastructure Limited's liquidator failed to release payments received from North East Frontier Railway (NFR) Authorities for subcontract work executed by the Applicant. The specific violations cited include:

  • Failure to release ₹7,00,45,915/- despite receiving corresponding payments from NFR Authorities
  • Violation of Clause 3 of the Sub-Contract Agreement dated 12.06.2015 which required the Respondent to release payments upon receipt from NFR Authorities
  • The Applicant completed more than 80% of subcontract work valued at ₹11,68,89,297/- (original contract value ₹12,11,28,805/-)
  • The Respondent released ₹6.90 Crores to the Applicant between 03.12.2015 and 09.05.2018, leaving a balance of ₹10 lakhs unpaid
  • During CIRP period, certain amounts were released by the Resolution Professional, but the Liquidator failed to release further amounts

Findings & Observations

The Tribunal made several key observations:

  • The Corporate Debtor was sold as a going concern pursuant to an e-auction conducted on 09.03.2020 for ₹12,48,70,000/-, approved by the Tribunal on 07.07.2021
  • The sale included project credentials, arbitration receivables and 89 ongoing works in progress
  • The liquidation process is not complete as the Liquidator must still comply with statutory obligations including custody and control of liquidation estate, maintaining accounts, realizing and distributing assets under Section 53
  • The relief sought would require adjudication of disputed questions relating to measurement, certification, entitlement, PVC bills, stock reconciliation, materials, equipment, royalty, alleged set-off, losses caused to the Corporate Debtor, termination of contracts
  • There is ambiguity regarding the exact scope of assets and projects transferred under the going concern sale

Penalties / Settlements / Directions

  • The main application (IA No.44 of 2022) was dismissed
  • The Liquidator was directed to take note of the subject matter while preparing project-wise and litigation-wise status report, reconciliation of receivables, contractual claims, retained amounts and liabilities as directed in IA No.742 of 2021
  • The Liquidator was directed to make available/hand over any available records relating to the Applicant's subcontract works to the present management of the Corporate Debtor
  • These directions are for accounting and reconciliation purposes only and not admission of the Applicant's claim

Corrective Actions & Future Obligations

  • The Liquidator must prepare comprehensive project-wise and litigation-wise status report
  • The Liquidator must complete audited/unaudited financial statements
  • The Liquidator must provide transaction-wise computation of liquidation costs and remuneration
  • The Liquidator must reconcile realizations and distribution
  • The Liquidator must report status of statutory filings

Final Ruling & Enforcement

The Tribunal dismissed the application seeking substantive directions against the Liquidator. The dismissal is not construed as an adjudication on the merits of the Applicant's claim. The Applicant is at liberty to pursue remedies against the Corporate Debtor under its present management/successful going-concern purchaser and/or before appropriate contractual, statutory or other competent forum, including the concerned Railway Authorities. All rights and contentions of the parties are left open.