Case Details
Case Name: G S Developers and Contractors Pvt. Ltd. vs. Paras Nutritions Pvt. Ltd.
Court/Authority: National Company Law Tribunal Chandigarh Bench (Court-I)
Case Number: CP (IB) No. 265/Chd/Pb/2024
Order Date: 21 May 2026
Period of Dispute: Work Order dated 04 January 2023; Project handed over on 25 November 2023; Demand notice issued 12 September 2024.
Parties Involved
Petitioner/Operational Creditor: G S Developers and Contractors Pvt. Ltd. (Construction services company).
Respondent/Corporate Debtor: Paras Nutritions Pvt. Ltd. (CIN: U15400PB2011PTC046450, manufacturer of cattle feed).
Legal Representatives: For Petitioner - Mr. Mohit Chaudhary, Advocate and Mr. Pranjal P Chaudhary, Advocate. For Respondent - Mr. Ranjit Singh Kalra, Advocate and Mr. Randeep Singh, Advocate.
Tribunal Members: Mr. Khetrabasi Biswal, Hon'ble Member (Judicial) and Mr. Shishir Agarwal, Hon'ble Member (Technical).
Issues / Allegations / Violations
- The Operational Creditor filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor for an outstanding operational debt of ₹2,49,99,617/- (principal) plus 18% interest.
- The debt arose from a Work Order dated 04.01.2023 (and an addendum dated 25.08.2023) for construction of a factory building in Jundla, Karnal, Haryana, with a total contract value of ₹11,48,71,112/-.
- The Corporate Debtor opposed the petition, alleging the existence of a pre-existing dispute. The disputes cited include:
- Significant delay in execution of work (original completion date was 19.08.2023; extended to 10.09.2023).
- Incomplete and defective construction work.
- Overstatement of quantities and bill amounts in the RA Bills.
- Failure to rectify deficiencies despite repeated communications.
- The Corporate Debtor claimed entitlement to liquidated damages and costs for rectification and completion of pending works.
Findings & Observations
- The Tribunal observed that the Corporate Debtor had substantiated its defence of a pre-existing dispute through contemporaneous communications.
- Key evidence included an email dated 28.02.2024 (Annexure CD-6) highlighting deficiencies in quality and inefficiency, and an email dated 02.07.2024 (Annexure CD-7 and CD-8) communicating a 'final defect list'.
- The Corporate Debtor's reply to the demand notice (dated 23.09.2024) explicitly reiterated these disputes and denied liability.
- The Tribunal found that the defence was not 'patently feeble' or 'spurious' but represented a 'plausible and bona fide dispute' requiring further investigation.
- The Tribunal heavily relied on the legal precedent set by the Supreme Court in Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd., (2018) 1 SCC 353, particularly paragraph 40, which mandates rejection of a Section 9 application if a notice of dispute exists or there is a record of a dispute.
Penalties / Settlements / Directions
- No monetary penalties, disgorgement, or settlements were imposed by this order.
Corrective Actions & Future Obligations
- No specific corrective actions or future obligations were ordered by the NCLT. The dispute is to be resolved through a separate forum.
Final Ruling & Enforcement
- The petition bearing CP (IB) No. 265/Chd/Pb/2024 was dismissed and disposed of.
- The dismissal was based on the grounds under Section 9(5)(ii)(d) of the IBC, as a valid notice of dispute existed before the receipt of the demand notice.
- The ongoing arbitration proceedings, initiated by the Corporate Debtor via a notice dated 15.12.2024, were noted. An independent Sole Arbitrator has been appointed by the Hon'ble High Court, and both parties have filed claims and counter-claims before the Arbitral Tribunal. The Operational Creditor's claim in arbitration is for ₹6,30,46,239/-.
- The final outcome is that the Corporate Insolvency Resolution Process (CIRP) against Paras Nutritions Pvt. Ltd. is not initiated.