SL. No.

2
NATIONAL COMPANY LAW TRIBUNAL
HYDERABAD BENCH
COURT HALL NO: II

Hearing Through: VC and Physical (Hybrid) Mode

CORAM: SHRI. RAJEEV BHARDWAJ – HON’BLE MEMBER (J)

CORAM: SHRI. SANJAY PURI - HON’BLE MEMBER (T)

ATTENDANCE-CUM-ORDER SHEET OF THE HEARING OF NATIONAL COMPANY LAW TRIBUNAL,

HYDERABAD BENCH, HELD ON 23.11.2023, At 10:30 AM

TRANSFER PETITION NO.

COMPANY PETITION/APPLICATION NO. Company Petition IB/66/2022
NAME OF THE COMPANY NCC Ltd
NAME OF THE PETITIONER(S) Akash Electrotek Engineering Pvt Ltd
NAME OF THE RESPONDENT(S) NCC Ltd
UNDER SECTION 9 of IBC

ORDER

Orders pronounced, recorded vide separate sheets. In the result, this Petition is

dismissed.

SD/- SD/-

MEMBER (T) MEMBER (J)

 IN THE NATIONAL COMPANY LAW TRIBUNAL
HYDERABAD BENCH – II

CP(IB) No.66/09/HDB/2022
U/s. 9 of IB Code, 2016

In the matter of:

M/s. Akash Electrotek Engineers Pvt Ltd.,

Neel Metal Wali Gali,
Near JBM Gate No.2, Sector-36,
Khandsa Mahommadpur Road,
Gurgaon – 122 001.
....the Petitioner/
Operational Creditor
Vs

1. M/s. NCC Limited,

NCC House, Madhapur,
Hyderabad – 500 081.

2. M/s. Airport Authority of India,

Rajiv Gandhi Bhawan,
Safdarjung Airport,
Delhi – 110 003.
....the Respondents/
Corporate Debtor

Date of order: 23.11.2023

CORAM:
Hon’ble Sri Rajeev Bhardwaj, Member (Judicial)
Hon’ble Sri Sanjay Puri, Member (Technical)

Counsels present:

For the Applicant : Mr. Prem Chhetri, Advocate

For the Respondent : Mr. Avinash Desai, Senior Advocate

Heard on : 12.10.2023

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 CP No.66/09/HDB/2022
Order dated : 23.11.2023

Per : Sanjay Puri

ORDER

1. This application is filed by M/s. Akash Electrotek Engineers Private

Limited, being the Operational Creditor (the Petitioner) seeking to
initiate the Corporate Insolvency Resolution Process (CIRP) against
M/s. NCC Limited, (Respondent-1) and M/s Airport Authority of
India, (Respondent-2) for the alleged default in discharging the debt
that is due to the Petitioner.

The Application

2. The Petitioner is in the business of electrical works, installation of

electrical equipment and supply of equipment etc. to its customers. In
the year 2018, Respondent-2 had awarded a contract to Respondent-1
vide Agreement No.AAL/CHQ/ENGG(CIVIL)/LUCKNOW/NIBT/742
Dt.29/30.08.2018 for electrical work at Lucknow Airport. Thereafter,
in February 2019 Respondent-1 appointed the Petitioner as
Specialized Agency, to conduct certain electrical works out of aforesaid
Agreement with the consultation and approval of Respondent-2 vide
Agreement No.NCC/AIRPORT LUCKNOW/5045&5046/18-19 dated
27.02.20191 and accordingly a Tripartite Agreement was executed
between the Petitioner, Respondent-1 & Respondent-2.

3. In accordance with the Tripartite Agreement, Respondent-1 was

obligated to make payment to the Petitioner upon the completion of
electrical works, with the endorsement of Respondent-2. The Applicant
was required to participate in all meetings convened by Respondent-2
and adhere to any instructions or directives issued periodically.

4. Meanwhile, the Airport Authority of India (Respondent-2) commenced

the privatization process for specific airports and released a public bid

1
Pages 39 to 50 of the Application (Annexure - A1)

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Order dated : 23.11.2023

for the privatization of Lucknow Airport. Consequently, M/s. Adani

Group emerged as the Successful Bidder, and on 02.11.2020,
Lucknow Airport was officially handed over to M/s. Adani Group for
future management, construction, and development. Thereafter, M/s.
Adani Group actively engaged in all meetings related to both Civil and
Electrical Works, providing instructions to the Petitioner as necessary.

5. The assertion is that the Petitioner accomplished 95% of the total

assigned work from Respondent-1 to the utmost satisfaction of the
Respondents, including M/s. Adani Group. However, despite
numerous requests, payment for the bills submitted at various stages
for the completed work was not forthcoming. The contention is that,
given its role as the primary party, it was the responsibility of
Respondent-2, including M/s. Adani Group, to settle the outstanding
amount owed to the Petitioner in the event that the main Contractor,
i.e., Respondent-1, failed to do so.

6. The Petitioner communicated with Respondent-2 through a letter

dated 25.09.20212, requesting the release of an amount totaling Rs
1.68 crore as against the Invoice dated 12.07.20213, which was the
outstanding sum for the completed electrical works. A subsequent
reminder letter, dated 08.10.2021, was also sent to Respondent-2 in
that regard.

7. Subsequent to this, on 12.10.20214, Respondent-2 addressed an email

to M/s. Adani Group, copying the Petitioner, requesting them to
investigate the matter. In response, M/s. Adani Group sent an email
on 16.10.2021 to the Petitioner and CC to Respondent-1,
acknowledging the complaint and indicating that it had been
forwarded to the relevant authorities for appropriate action. Despite

2
Pages 70 to 75 of the Application (Annexure - A4)
3
Pages 51 to 69 of the Application (Annexure - A2 & A3)
4
Pages 77 to 78 of the Application (Annexure – A5)

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Order dated : 23.11.2023

these communications, neither Respondent-1/Respondent-2 nor M/s.

Adani Group fulfilled the outstanding payment to the Petitioner.

8. According to the Petitioner it had come to know that Respondent-1

had already received the specified payment from the Airport Authority
for the work carried out by the Petitioner on various dates. This
information was allegedly concealed by Respondent-1. It is further
contended that the Respondents did not raise any dispute concerning
the work completed by the Petitioner, indicating that the pre-bills
submitted by the Petitioner were genuine and bonafide.

9. Subsequently, on 28.10.2021, the Petitioner dispatched a Demand

Notice5 to the Respondents, seeking payment of Rs 1,68,21,880 along
with accrued interest. Despite the issuance of the Demand Notice, the
Respondents did not fulfill their obligation to settle the outstanding
amount owed to the Petitioner.

10. However, a reply letter dated 13.11.20216 was received from

Respondent-1. According to the Petitioner, in this letter Respondent-1
disputed the amount specified in the Pre-Bills for the first time.
Additionally, Respondent-1 raised a claim of Rs 23,34,585 on false and
frivolous grounds.

11. It is emphasized that the Respondents failed to remit the admitted

sum of Rs 1,68,21,880 to the Petitioner, as evidenced by their lack of
response to the emails dated 25.09.2021 and 08.10.20217. Despite
numerous requests, reminders, and personal visits, the Respondents
did not fulfill their obligation to settle the outstanding amount, leading
to the initiation of the present Petition.

5
Pages 25 to 32 of the Application (Annexure – 1)
6
Pages 33 to 38 of the Application (Annexure – 1)
7
Pages 70 to 76 of the Application (Annexure – 4)

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Order dated : 23.11.2023

Respondent’s Counter:

12. In the counter filed by Respondent-1, all the allegations presented in

the Petition were categorically denied. Respondent-1 additionally
argued that, given the existence of a dispute between the Petitioner
and Respondent-1, the present Petition was subject to dismissal. The
claim made by the Petitioner was characterized as baseless and
malicious, with Respondent-1 asserting that it had no obligation to
pay the alleged debt of Rs 1,68,21,880.

13. Citing section 3(7) of IBC, it is argued that the Airports Authority of
India (AAI), being a Statutory Body created under the Airports
Authority of India Act, 1994, and supervised by the Directorate
General of Civil Aviation, Ministry of Civil Aviation, Government of
India, does not qualify as a Corporate Person. Additionally, it is
contended that a single application under Section 9 of IBC is not
maintainable against two different Corporate Debtors. Therefore, the
petition should be dismissed on this ground alone, it is claimed.

14. Finding fault with the Demand Notice issued under Section 8 of IBC, it
is claimed that it has to be accompanied with the list of documents
which forms the basis of the claim along with Invoice. It is pointed out
that the undated Form-3 Demand Notice issued by the Petitioner did
not contain any documents for the alleged debt except some vague
Excel sheets on computation of the due amount.

15. Furthermore, it is asserted that the present Petition is subject to

dismissal due to the existence of pre-existing disputes that arose well
before the receipt of the undated Demand Notice by Respondent-1 on
03.11.2021. It is claimed that through a reply letter dated 13.11.2021,
disputes between the Petitioner and Respondent-1 were explicitly
communicated to the Petitioner. These disputes were deemed to be
pre-existing and had originated from the alleged deficit and incomplete
services provided by the Petitioner.

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Order dated : 23.11.2023

16. It is argued that Respondent-1 issued Work Orders No. NCC AIRPORT
LUCKNOW/5045/18-19 dated 27.02.2019 and No.NCC/AIRPORT
LUCKNOW/5046/18-19 dated 27.02.2019 for the supply,
transportation, unloading, shifting, etc. Due to the Petitioner's failure
to execute the work in a timely manner, the Work Orders were
amended8 at the Petitioner's request to reduce the scope of work.
Pursuant to the Work Orders, Respondent-1 released a mobilization
advance of Rs 23,00,000 on 23.03.2019 and Rs 3,00,000 on
15.06.2019 after obtaining corresponding Bank Guarantees from the
Petitioner. However, despite receiving the mobilization advance, the
Petitioner did not deploy the necessary manpower and materials to
execute the work, leading to significant delays in the project.

17. According to Respondent-1, the Petitioner initiated work in March

2019, but consistent non-performance was observed throughout the
project. The Petitioner was repeatedly notified about the delays and
improper execution of work through numerous emails9 and in various
meetings, with requests to expedite the work. However, the Petitioner
failed to execute the project in accordance with the agreed-upon
conditions, and the mobilization advance was not fully utilized. The
lack of progress by the Petitioner had a detrimental impact on other
civil works. In an email dated 03.05.2019, Respondent-1 specifically
expressed dissatisfaction with the services provided by the Petitioner
and its employees. Despite assurances to visit the site and rectify the
defects, the Petitioner failed to follow through.

18. Additionally, through an email dated 16.05.2019, the Respondent

notified the Petitioner that the solid bend materials utilized were
rejected by the consultant due to quality issues. In response, the
Respondent directed the Petitioner, via an email dated 16.05.2019, to
promptly remove the rejected materials from the site. The Petitioner,
8
Pages 13 to 53 of the Counter (Annexure – R2)
9
Pages 54 to 199 of the Counter (Annexure – R3)

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Order dated : 23.11.2023

acknowledging the provision of defective materials, conveyed in an

email dated 16.05.2019 that the issues were attributed to its supplier.
Notably, the Petitioner did not contest the Respondent's decision to
replace the materials at the Petitioner's risk and cost.

19. It is further stated that Respondent-1 informed the Petitioner via an

email dated 29.07.2019 that rusted MS conduit, lacking proper
painting, had been installed. Respondent-2, as the client/principal
employer, rejected the conduit laid on zone-2 basement mezzanine
slab. Respondent-1 requested the Petitioner to replace the rusted
conduit and cease the use of deteriorated materials. Allegedly, the
Petitioner did not take corrective measures. The purported inaction of
the Petitioner resulted in significant reputational damage for
Respondent-1, along with financial losses incurred for correcting and
rectifying the incomplete and defective work.

20. As per Respondent-1, the Petitioner invoiced for purported work

without obtaining any certification. Despite requests, the Petitioner
delayed participating in joint verification, allegedly due to non-
compliance with the work orders. In emails dated 01.10.2019 and
07.10.2019, the Petitioner was urged to deploy a B.Tech. Engineer
with 10 years of experience to address site issues. However, the
Petitioner did not assign the necessary technical personnel as
requested.

21. According to submissions, in an email dated 29.11.2019, the

Petitioner was notified about the subpar quality of work at the site and
was directed to enhance the work quality. However, the Petitioner
allegedly failed to take corrective measures. The delays attributed to
the Petitioner were reportedly documented in the minutes of the
meeting dated 03.12.201910. Moreover, in an email dated 11.07.2020,
the Petitioner was apprised of defective works, and in an email dated
10
Pages 200 to 204 of the Counter (Annexure – R4)

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Order dated : 23.11.2023

06.08.2020, it was communicated that bill processing hinged upon the

submission of a GST Invoice and an extension of the expired
mobilization Bank Guarantee. Regrettably, the Petitioner did not
submit the GST Invoice or extend the mobilization Bank Guarantee.
Owing to the Petitioner's repeated failures to mobilize essential
manpower and materials, Respondent-1 was compelled to assign the
work to another agency to meet client targets. This action was
communicated to the Petitioner in an email dated 06.01.2021.

22. The assertion is made that the Petitioner failed to pay wages to its
workers and employees. Consequently, Respondent-1 received a letter
dated 20.10.2020 from the Labour Court (letter no. 8990-95/LR-PW-
62/2020), in which Mr. Girijesh Chandra Pandey and 16 other
laborers claimed outstanding wages. This leads to the claim that the
Petitioner not only abandoned the work but also abandoned its own
employees/workers11. Despite not completing the work, the Petitioner
submitted a pre-final bill for Rs 74,70,198.62 without valid
justification and supporting documents. It is argued that the pre-final
bill lacks factual basis as it does not accurately represent the work
completed by the Petitioner.

23. The Respondent Respondent-1 vide emails dated 25.08.2021 and

31.08.2021 reportedly disputed the pre-final bill issued by the
Petitioner, as it was allegedly false and incorrect and invited the
Petitioner for verification. Upon enquiry and cross-verification of the
documents submitted for work executed by the Petitioner, it is claimed
that a lot of work was not completed. It is stated that as per the joint
records & inspection reports, after re-verification of measurements in
presence of the Petitioner, the Respondent Respondent-1 had checked
and certified pre-final bill till 30.09.2021.12 It is claimed that the
Petitioner is due to pay Rs 23,34,585 to the Respondent-1. After
11
Pages 205 to 211 of the Counter (Annexure – R5)
12
Pg 212-361 of the Counter (Annexure-R6)

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Order dated : 23.11.2023

invoking the mobilization Bank Guarantees13, the Respondent-1 had

filed a suit before the concerned court14 against the Petitioner. The
Petitioner, it is claimed, has sought to initiate CIRP against
Respondent-1 with a malafide intention by relying upon its own
created pre-final bill, which was never accepted by the Respondent-1.

24. In its counter reply Respondent-1 has also disagreed with charging of
interest @18% per annum along with the principal alleged debt of Rs
1,689,21,880. It is contended that the Petitioner has failed to file any
documentary evidence to prove the existence of the interest mentioned
in Part-IV of the Petition. Hence, it is claimed that the interest @18%
per annum mentioned in Part-IV of the Petition does not exist and
levied only with a malafide intention to arm-twist and coerce the
Respondent. Hence, the present Petition is liable to be dismissed.

Petitioner’s Rejoinder:

25. The Petitioner, in the rejoinder, reiterated the contents of the

application and refuted all the statements made in the counter filed by
Respondent-1.
The Written Submissions:

26. Both parties were granted the liberty to submit written submissions
within a week by the order dated 12.10.2023. Subsequently,
Respondent-1 filed its written submissions on 01.11.2023, along with
a memo requesting condonation of the delay in filing the written
submissions, and this request was granted. The written submissions
largely reiterate the contents of the counter.
The Decision:

27. Having heard arguments from both counsels and examined the
records from both parties, it is established that the Petitioner,
functioning as a sub-contractor to Respondent-1, assumed
13
Pg 362-365 of the Counter (Annexure-R7)
14
Pg 366-375 of the Counter (Annexure-R8)

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Order dated : 23.11.2023

responsibility for specific electrical tasks within a project at Lucknow

Airport, commissioned by Respondent-2. A tri-partite contract
involving the Petitioner, Respondent-1, and Respondent-2 was entered
into. As per the agreement, Respondent-1 was mandated to make
payments to the Petitioner upon the satisfactory completion of
different stages of work undertaken by the Petitioner.

28. According to the Petitioner, it consistently fulfilled the assigned tasks

and submitted multiple invoices at different stages of the project. The
Petitioner alleges that the Respondents did not make timely payments
for the billed amounts. Furthermore, the Petitioner claims to have
successfully completed 95% of the designated work, having submitted
various invoices, including the "Pre-Final Bill" on 12.07.2021, yet the
Respondents have not settled the outstanding payments.

29. Being the main party it [was] the duty of Respondent-2 to pay the due
amount, the Petitioner has asserted in their application. The Petitioner
had therefore written to Respondent-2 on 25.09.2021 and requested
for release of Rs 1.68 crores which was due, and also sent a reminder
on 08.10.2021. Respondent-2 on their part sent an email on
12.10.2021 to Adani’s, their successors in the project, who in turn
reverted to the Petitioner on 16.10.2021 with a copy marked to
Respondent-1, stating that they had noted the complaint and
forwarded the same to the concerned authorities for action. The
lament of the Petitioner is that nothing came out of this
correspondence and the Respondent Corporate Debtors (Respondent-1
& R-2) have not paid its dues.

30. On 28.10.2021, the Petitioner proceeded to issue a Section 8 notice to

both Respondent-1 and Respondent-2, demanding payment for what it
characterizes as "unpaid operational debt."

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Order dated : 23.11.2023

31. In response, on 13.11.2021, Respondent-1 contested the 'Pre-Bills'

submitted by the Petitioner and, in turn, raised a claim against the
Petitioner amounting to Rs 23,34,585. The Petitioner asserts that
these disputes were raised by Respondent-1 for the first time and
contends that the claim of Rs 23,34,585 was made on false and
frivolous grounds.

32. The Petitioner, referencing its letters of 25.09.2021 and 08.10.2021

addressed to AAI, expressed surprise that the Corporate Debtor (i.e.,
Respondent-2) had not paid the admitted amount of Rs 1,68,21,880,
as indicated by their lack of response to the aforementioned emails.

33. From the above averments it is clear that the main grievance of the
Petitioner is against Respondent-2 (AAI). Apparently, Respondent-1
(NCC) has been impleaded, as according to the Tripartite contract, it
was to make payments to the Petitioner at different stages on
completion of work for Respondent-2 (AAI). In fact, Section 8 Notice in
Form 3 mentions AAI as the first Respondent and NCC Ltd as second.

34. It has rightly been pointed out by Respondent-1 in its counter reply
that AAI (Respondent-2) being a statutory body created under Airport
Authority of India Act, 1944, does not come under the definition of
‘corporate person’ under Section 3(7) of IBC. Therefore, proceedings
under IBC could not have been initiated against them. Considering
that AAI is the main party against whom the Application is directed, it
suffers from a fatal flaw by impleading AAI as the defaulting Corporate
Debtor.

35. Another contention, about filing of single application against two

different Corporate Debtors, being not maintainable, is also not
without merit. Without specifying who actually is responsible for the
debt incurred, the Application is rendered ambiguous and thus liable
for rejection.

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Order dated : 23.11.2023

36. The next contention of NCC Ltd (Respondent-1) revolves around the
faulty Demand Notice sent by the Petitioner in Form-3. According to
Respondent-1, this Notice lacked inclusion of any invoices and failed
to provide a basis for the alleged operational debt. While the Petitioner
attached printouts of Excel sheets15 purportedly outlining the
computation of the amount due, no GST invoices were included. In
contrast, NCC Ltd (Respondent-1) submitted its own computation, also
through printouts of Excel sheets16, indicating some amount due from
the Petitioner. The conflicting printouts create uncertainty regarding
the debt owed to the Petitioner and raise questions about whether it
can be appropriately considered under Section 9 of the IBC.

37. In their counter reply, Respondent-1 NCC Ltd has also raised the issue
of existing disputes in relation to the work done by the Petitioner and
its billing. In its counter, it has submitted copies of several emails17,
where the work of the Petitioner was considered inadequate,
insufficient or faulty. The quality and quantity of work done by the
Petitioner has remained a sore point, as can be seen from these
emails.

38. In the present proceedings, which are summary in nature, we are not
to decide upon the disputes which existed between the parties. All we
need to see is whether disputes in respect of goods or services existed,
when the Demand Notice in Form-3 was sent by the Petitioner to
Respondent-1 & Respondent-2.

39. The submission suggests that on 12.07.2021, the Petitioner had only
issued "Pre Bills"18 in the form of a printout of an Excel sheet. This
implies that the dues had not crystallized at that point and required

15
Pages 51 to 69 of the Application
16
Pages 212 to 224 of the Counter
17
Page 54 to 199 of the Counter
18
Part-III of Form-5 – on Page 20 of the Application

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Order dated : 23.11.2023

further reconciliation and adjustments. For this reason alone, the

Petition need not be entertained.

40. Moreover, it is essential to acknowledge that the principal objective of

the Insolvency and Bankruptcy Code (IBC) is not intended to be a tool
for recovering disputed debts. Instead, its primary purpose is to
facilitate the resolution of insolvency for corporate entities. Issues
pertaining to non-payment for services rendered cannot be addressed
through the initiation of insolvency proceedings under the IBC. In
order to recover outstanding dues, if any, the Petitioner could have
pursued legal recourse through the appropriate Civil Court, which
possesses jurisdiction to determine the validity of the outstanding
dues.

As a result, the Petition is dismissed.

Sd/- Sd/-
(SANJAY PURI) (RAJEEV BHARDWAJ)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)

VL

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