The National Company Law Tribunal’s (NCLT) Delhi bench has appointed an Interim Resolution Professional (IRP) to start a Corporate Insolvency Resolution Process (CIRP) against Ahluwalia Contracts (India) Ltd.

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This follows a prayer moved by New Delhi-based A2 Interiors Products Pvt Ltd, alleging pending payments of ₹14.10 crore for various civil and electrical works done for the Ahluwalia Contracts, a civil contractor in the construction industry. The operational creditor (A2 Interiors Products) had submitted before the tribunal that the works were for performing interior, furnishing and allied civil and electrical works at various project sites.

The corporate debtor has failed and refused to clear the pending dues, despite having admitted the same on several occasions, A2 Interiors said in filing in 2019.

In its May 5 order, NCLT has appointed Satish Kumar Chugh as the IRP and also directed A2 Interiors Products to deposit ₹2 lakh with the IRP.

“The application was filed under section 9 of the Insolvency and Bankruptcy Code, 2016, which stated that a firm can move bankruptcy proceedings if the debtor owes more than ₹1 lakh. Later in 2020, this was increased to about ₹1 crore,” Mohit Chaudhary, Managing Partner at law firm Kings and Alliance LLP said, who is also the legal advisor to A2 Interiors Products.

On its part, Ahluwalia Contracts (the corporate debtor) raised many objections stating that the petition was “not maintainable”. These included grounds that the works were of different work orders – different service in nature and each contract gives rise to separate alleged debt – and cannot be claimed under one single application.

Further, clubbing different work orders under a single cause of action is not permissible under the law, it said, adding that certain facts and documents have been concealed by the “applicant”. It also added that the applicant did not disclose all work orders executed between the parties thereby adopting pick and choose technique, and also mentioned about pre-existing dispute between the parties.

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