Ahluwalia Contracts (India) Ltd vs Shristi Infrastructuredevelopment ...

(Arising out of the Order dated 26.04.2024 passed by the National Company Law Tribunal, Division Bench, Court No II, Kolkata in Company Petition (IB) No 2/KB/2021) IN THE MATTER OF:

Ahluwalia Contracts (India) Limited Office At : A-177, Okhla Industrial Area Phase-I, New Delhi-110020 ...Appellant

Versus Shristi Infrastructure Development Corporation Limited Plot No X-1,2 & 3, Block- EP, Sector-V, Salt Lake City, K.olkata-700091 West Bengal ...Respondent Present For Appellant: Mr. Anil K. Airi, Sr. Advocate along with Mr. Sunil Mund, Mr. Abhishek Taneja, Mr. Mritunjya K. Singh, Mr. Jagjeet Singh, Mr. Vedant Mund & Mr. Uttkarsh Gupta.

For Respondent: Mr. Rishav Banerjee, Ms. Anoushka Dey & Ms. Prerna Shaha, Advocates

JUDGEMENT

(04 .09.2025)

NARESH SALECHA, MEMBER (TECHNICAL)

1. The present appeal has been filed by the Appellant i.e. Ahluwalia Contracts

(India) Ltd. under Section 61 of the Insolvency and Bankruptcy Code, 2016 Comp. App. (AT) (Ins.) No. 1155 of 2024

('Code') against the Impugned Order dated 26.04.2024 passed by the National

Company Law Tribunal, Division Bench, Court No II, Kolkata ('Adjudicating

Authority') in Company Petition (IB) No 2/KB/2021.

Shristi Infrastructure Development Corporation Limited, who is the

Corporate Debtor, is the Respondent herein.

2. The Appellant submitted that on 25.04.2012, it entered into an agreement

with the Respondent based on a letter of acceptance dated 07.02.2012, for

executing balance civil works for piling, RCC basement, superstructure, and

associated works for a Five Star Hotel in New Town at Rajarhat, with a contract

value of Rs. 85,00,00,000/-. The Appellant contended that it accepted the work

relying on the Respondent's assurances of timely payments, and that under Clause

60.11 of the General Conditions of Contract, the Respondent was obligated to pay

the final bill within 75 days of submission.

3. The Appellant submitted that the work was successfully completed on

31.08.2015 within the stipulated extended time, to the satisfaction of the

Respondent. The Appellant further submitted that it submitted the final bill for

Rs. 3,61,18,255/- on 13.07.2016, and that the Respondent issued a completion

certificate dated 07.11.2016, certifying completion on 31.08.2015 without any

mention of delay or liquidated damages.

4. The Appellant contended that more than one year after the completion

certificate, on 13.11.2017, the Respondent certified the total work value at Rs.

91,70,78,214/- excluding security deposit and held amounts. The Appellant

Page 2 of 27 Comp. App. (AT) (Ins.) No. 1155 of 2024

submitted that from August 2015 to August 2017 (defect liability period), it

rectified all defects and deficiencies pointed out by the Respondent.

5. The Appellant submitted that despite repeated reminders and meetings

with the Respondent's officials for release of balance dues, no payments were

made. The Appellant further submitted that on 25.03.2019, the Respondent

released the security deposit of Rs. 2,90,04,920/- and discharged the Appellant's

bank guarantee.

6. The Appellant contended that, as an afterthought nearly four years after

completion and final bill submission, the Respondent's agent (Currie & Browne

(India) Limited) demanded a letter of Extension of Time (EOT) via email dated

18.07.2019, despite the issuance of the completion certificate without reference

to delay or liquidated damages. The Appellant submitted that in response, vide

letter dated 25.07.2019, it explained that such demand was uncalled for, as the

extension was deemed granted by the completion certificate, and levy of

liquidated damages was untenable; however it submitted the EOT letter

attributing delays to the Respondent and demanded release of Rs. 4,13,76,946/-.

7. The Appellant contended that the Respondent unambiguously admitted

liability vide letter dated 19.06.2020, confirming a payable amount of Rs.

2,87,44,710/- and stating that non-confirmation within 15 days would treat the

balance as correct. The Appellant submitted that, as the total outstanding was Rs.

3,62,67,257/-, it clarified this aspect vide letter dated 30.06.2020, requesting

Page 3 of 27 Comp. App. (AT) (Ins.) No. 1155 of 2024

correction in the Respondent's books and warning of legal remedies if payments

were delayed further.

8. The Appellant contended that due to the Respondent's failure to pay the

operational debt despite demands, it issued a demand notice under Section 8 of

the Code dated 26.09.2020. The Appellant submitted that the Respondent's reply

dated 08.10.2020 was evasive and attempted to deny its prior admission of

liability to Rs. 2,87,44,710/- and certification of work value.

9. The Appellant submitted that, in view of the Respondent's clear admission

of liability on 19.06.2020, the Adjudicating Authority's view of pre-existing

disputes based on prior communications is unjust and untenable. The Appellant

further contended that the Respondent's levy of liquidated damages four years

after completion and issuance of the completion certificate is frivolous, illusory,

and an afterthought to concoct a defense.

10. The Appellant submitted that the Adjudicating Authority failed to consider

the acknowledgment of debt dated 19.06.2020 admitting Rs. 2,87,44,710/. The

Appellant contended that this unilateral balance confirmation letter reflects the

Respondent's own books and being undisputed, negates any pre-existing dispute;

non-payment thereof suffices to allow the Section 9 petition.

11. Concluding its arguments, the Appellant request this Appellate Tribunal

to set aside the Impugned order and to allow this appeal.

12. Per contra, the Respondent denied all the averments made by the Appellant

as misleading and baseless.

Page 4 of 27

Comp. App. (AT) (Ins.) No. 1155 of 2024

13. The Respondent contended that it is settled law that a specific

authorisation is required to initiate the Corporate Insolvency Resolution Process

(CIRP) against the Respondent, and in absence of a specific authorisation, the

CIRP cannot be initiated against the Respondent. The Respondent submitted that,

in the instant case at hand, the Appellant has not disclosed a truly specific

authorisation authorising Mr. Jagjeet Singh to file this Appeal to dismiss the

impugned order and initiate CIRP against the Respondent herein, and on this

ground alone this instant application/Application is liable to be dismissed.

14. The Respondent submitted that the purported demand notice dated

26.09.2020 issued by the Appellant is not in accordance with the Rules and

Regulations framed under the Code and the Appeal is therefore liable to be

dismissed.

15. The Respondent submitted that it replied vide letter dated 08.10.2020 to

the demand notice dated 26.09.2020 to the Appellant.

16. The Respondent asserted that the Appellant caused significant and

unwarranted delays in fulfilling its contractual obligations to complete specified

construction works to the Respondent's full satisfaction within the stipulated

timeframe, ensuring a defect-free outcome. It is also case of the Respondent that

the Appellant caused numerous defects in the executed works, which were

promptly and thoroughly communicated to the Appellant from time to time vide

several e-mails. On several instances, the Appellant neglected to address these

defects adequately, compelling the Respondent to hire external contractors for

Page 5 of 27 Comp. App. (AT) (Ins.) No. 1155 of 2024

rectification at additional cost. Furthermore, the Appellant repeatedly failed to

provide essential documents in a timely and thorough manner to both the

Respondent and the third-party cost evaluators, Currie & Brown (India) Limited,

responsible for overseeing project expenses for the hotel complex, despite

multiple email reminders aimed at verifying the Appellant's claimed final bill.

17. The Respondent highlighted the presence of numerous pre-existing

disputes between the parties, which were duly notified to the Appellant well

before receiving the demand notice.

18. The Respondent contended that the Letter of Acceptance, forming a

constituent part of the Contract, stipulated that the work commencement date was

1st March, 2012, and paragraph numbered 1 of the Addendum/Corrigendum No.

2 specified that "the 12th month from 1st March, 2012, i.e., March 2013, shall be

considered for the completion of all activities/entire works." The Respondent

submitted that the Appellant and the Respondent had expressly agreed that time

was of the essence of the contract, and the Appellant was liable to pay Liquidated

Damages to the Respondent in the event of failure or delay in completing the

work within the timeframe fixed by the Contract. The Respondent submitted that

this delay constituted a breach of the contractual terms, rendering the Appellant

liable for liquidated damages as specified in the contract.

19. The Respondent submitted that the contract value was Rs. 95,98,44,943.

The Respondent contended that it was contractually incumbent on the Appellant

to rectify any and all defects or defect liabilities present in the works and

Page 6 of 27 Comp. App. (AT) (Ins.) No. 1155 of 2024

structures during the Defect Liability Period following the completion of the

works to the Respondent's satisfaction. The Respondent further submitted that

the Appellant's failure to rectify such defects within a reasonable time

necessitated the Respondent to take all necessary steps to have the defects

rectified at the Appellant's cost and expense.

20. The Respondent submitted that it issued a conditional and limited

completion certificate on 07.11.2016, purely out of commercial courtesy

following repeated requests by the Appellant. The Respondent contended that the

certificate explicitly stipulated that the work commenced on the effective contract

date of 01.03.2012 and was completed by the Appellant only on 31.08.2015. The

Respondent further submitted that the completion certificate was issued subject

to, inter alia, the Appellant's obligation to rectify all defects in the completed

work to the Respondent's satisfaction within the Defect Liability Period

commencing after the prima facie completion of the works.

21. The Respondent contended that the Appellant performed substandard

work requiring rectification of multiple defects to meet the contractually

contemplated standards and/or industry standards. The Respondent submitted

that it discovered such defects and duly communicated them to the Appellant via

multiple emails, some issued prior to the prima facie completion of the works on

31.08.2015 and others during the Defect Liability Period. The Respondent further

submitted that it provided an indicative list of correspondence through which

Page 7 of 27 Comp. App. (AT) (Ins.) No. 1155 of 2024

these defects in the works performed or prima facie completed by the Appellant

were diligently communicated to the Appellant, requiring rectification.

22. The Respondent contended that the Appellant has sufficient notice of all

pre-existing disputes concerning the quality of the finished works, being the

recipient of all relevant correspondence issued by the Respondent. The

Respondent contended that the Appellant failed to rectify a number of defects,

duly notified by the Respondent, and explicitly admitted its inability to comply

with contractual obligations to rectify these defects during the Defect Liability

Period, as evidenced in emailed replies to the Respondent's requests. The

Respondent submitted that the Appellant's admitted failure and inability to rectify

multiple defects, combined with its failure to address other issues to the

Respondent's satisfaction, caused inordinate delays in achieving meaningful

completion of the contracted works.

23. The Respondent contended that the Appellant's purported "Final Bill" for

July 2016 was submitted before the Defect Liability Period ended, during which

the Appellant admittedly failed to rectify defects, compelling the Respondent to

incur considerable costs for rectification, which the Appellant was contractually

liable to bear. The Respondent submitted that certification of the "Final Bill"

could only occur meaningfully after the Appellant submitted all required

documents for verification by the Respondent and/or Currie & Brown (India)

Ltd., the Defect Liability Period concluded, and rectification costs were fully

assessed. The Respondent further submitted that the Defect Liability Period ran

Page 8 of 27 Comp. App. (AT) (Ins.) No. 1155 of 2024

for 730 days from 31.08.2015, and the Appellant's failure to promptly comply

with multiple email requests for documents and reconciliatory works, extending

into July 2019, delayed the certification process. The Respondent contended that

the Appellant failed to provide any document evidencing an Extension of Time

until 31.08.2015, despite reliance on the conditional completion certificate dated

07.11.2016, as evidenced by email correspondence dated 18.04.2017,

03.08.2017, 10.08.2017, 21.08.2017, 24.02.2018, 11.06.2018, 22.06.2018,

23.07.2018, and 18.07.2019.

24. The Respondent submitted that the third-party costs assessor, Currie &

Brown (India) Limited, deemed it appropriate to impose Liquidated Damages on

the Appellant at a rate of 5% of the contract value, totaling Rs.4,79,92,247/- as

documented in the final Certified Outstanding Payment (COP) document. The

Respondent contended that this imposition was due to the Appellant's inordinate

delay in achieving prima facie completion of the contracted works for the hotel

complex project, which was only realized on 31.08.2015, and the Appellant's

failure to produce any document evidencing an EOT granted by the Respondent

until that date, as evident from the email dated 18.07.2019.

25. The Respondent submitted that, upon reconciliation of accounts and

adjustments for debit notes and liquidated damages imposed on the Appellant,

nothing remains due and payable by the Respondent to the Appellant, and

conversely, the Respondent is entitled to receive Rs. 2,34,60,761/- from the

Appellant.

Page 9 of 27

Comp. App. (AT) (Ins.) No. 1155 of 2024

26. The Respondent submitted that the project contract was governed by the

pertinent agreement and general commercial conditions, under which the

Appellant violated multiple obligations by rendering defective work and

committing inordinate delays. These breaches caused inconvenience and losses

to the Respondent, entitling it to liquidated damages. The Respondent denied the

Appellant's claim of successful completion within the stipulated extended time

and reiterated that the Appellant failed to produce documents evidencing EoT till

31.08.2015, as admitted in the Appellant's own letter dated 25.07.2019. This letter

sought retrospective EoT, confirming the Appellant's admission of delay and

breach of the time-essence clause. Multiple disputes regarding shoddy work

quality were notified via email, which the Appellant suppressed, rendering the

Section 9 application and demand notice an abuse of process. Defects during the

Defect Liability Period required rectification by third-party contractors at the

Respondent's cost, further justifying liquidated damages.

27. The Respondent submitted that the Appellant's letter dated 25.07.2019

admits to the absence of EoT till 31.08.2015 and disputes the levying of liquidated

damages and other deductions, thereby acknowledging the existence of pre-

existing disputes prior to the demand notice. The certification process by Currie

& Browne (India) Limited, culminating around 18.07.2019, extended due to the

Appellant's delays, negating any allegation of the Respondent's failure to pay.

28. The Respondent submitted that without admitting the contents of the

purported letter dated 19.06.2020, that it cannot be construed as an

Page 10 of 27 Comp. App. (AT) (Ins.) No. 1155 of 2024

acknowledgment or admission of liability for Rs. 2,87,44,710/- or any part

thereof. The Respondent clarified that the said letter merely indicates a

preliminary step for finalization of accounts, not a final statement admitting

payment liability. The Respondent submitted that the Appellant never

countersigned or confirmed the purported accounts, rendering them forged and

fabricated, and incapable of constituting an acknowledgment. The Appellant was

aware of the imposition of liquidated damages by Currie & Browne (India)

Limited during 2018-2019, and the right to set off such damages remains intact.

The mischaracterization of this letter indicates a fishing expedition by the

Appellant for unjust enrichment, despite its knowledge of delays and lack of EoT

documentation.

29. The Respondent submitted that the Appellant's purported "Final Bill" was

submitted around 13th July 2016, before the Defect Liability Period ended, during

which the Appellant failed to rectify defects, necessitating third-party

intervention at the Respondent's cost. Certification was impossible until all

documents were submitted, the period ended, and rectification costs were

assessed.

30. The Respondent submits that the Adjudicating Authority did not erred in

appreciating the absence of admission, default, or acknowledgment and also

correctly held that there were pre-existing disputes and therefore, the Appeal is

not bona fide.

Page 11 of 27

Comp. App. (AT) (Ins.) No. 1155 of 2024

31. Concluding his arguments, the Respondent request this Appellate Tribunal

to dismiss this appeal.

Findings

32. We note that contract to execute works for construction of a Five Star Hotel

in New Town at Rajarhat was awarded to the Appellant on 25.04.2012 by the

Respondent and the work was completed on 31.08.2015 and consequently the

Completion Certificate was issued on 07.11.2016. We note that on 13.07.2016,

the Appellant submitted final bill for Rs. 3,61,81,255/- to the Respondent and the

Respondent has stated to have certified the entire amount of work done by the

Appellant at Rs. 91,71,78,217/- excluding security deposit. The security deposit

of Rs. 2,90,04,920/- was also released on 25.03.2019, however, the final bill of

Rs. 3,61,81,255/- was withheld by the Respondent.

33. It has been brought out that an independent cost accessor, as an agent of

Respondent, i.e., Currie & Browne (India) Limited called for letter of EOT and

raised issues about imposition of liquidator damages alleging delay in completion

of projects vide their letter dated 25.07.2019. The Appellant brought to our notice

that to avoid any complication and in order for seeking quick payment of its legal

dues, the Appellant submitted the EOT letter however, clarified that delay was

due to reasons solely attributable to the Respondent.

34. It is the case of the Appellant that since no payment was received by the

Appellant, the Appellant issued Demand Notice under Section 8 of the Code on

Page 12 of 27 Comp. App. (AT) (Ins.) No. 1155 of 2024

26.09.2020 which was replied by the Respondent on 08.10.2020 raising issue of

imposition of liquidated damages due to alleged delay in completion of work and

also raised issue regarding pre-existing disputes. Unsatisfied with the reply of the

Respondent, the Appellant filed Section 9 Application before the Adjudicating

Authority on 22.12.2020 which was rejected by the Adjudicating Authority vide

its Impugned Order dated 24.04.2024.

35. The Impugned Order has dealt three issues i.e., liquidated damages against

the Appellant, issue of the completion certificate issued by the Respondent and

pre-existing disputes between the Appellant and the Respondent.

36. We note that the Adjudicating Authority has gone through the aspect of

liquidated damages and concluded that the issue of liquidated damages cannot be

dealt under summary trial under the Code. The relevant para of the Adjudicating

Authority on issue of liquidated damages, reads as under :-

"39.***Thus, we are of the considered opinion that the veracity of statement that there has been deduction on account of Liquidated Damages as per the terms of the contract executed between the parties cannot be tried by this Adjudicating Authority as the I&B Code only contemplates a summary proceeding."

(Emphasis Supplied)

37. Since, the Adjudicating Authority has held that liquidated damages issue

cannot be decided in summary proceedings which seems logical. We do not find

any error in the Impugned Order on this issue.

Page 13 of 27

Comp. App. (AT) (Ins.) No. 1155 of 2024

38. Now we will take up the issue regarding pre-existing disputes between the

parties prior to issue of demand notice under Section 8 of the Code on 26.09.2020.

We observe that dispute is not mere denial and dispute should be in accordance

with the Section 5(6) of the Code.

39. At this stage, we would like to observe that in the Section 7 (5) (a) of the

Code the word 'may' has been used in contrast to the word 'shall' in Section 9

(5) (a) of the Code which clearly indicates legislative intention i.e., discretion has

been given to the Adjudicating Authority in case of Section 7 application whereas

Section 9 application, no such discretion has been given to the Adjudicating

Authority. The application filed by the Operational Creditor/Appellant for

initiation of CIRP is required to be admitted by the Adjudicating Authority, if the

application is complete in all respect. What is to be proved is that there is non-

payment of unpaid operational debt without any pre-existing disputes. It may be

pointed out that financial debt is usually secured and backed by due

documentation whereas the operational debts are usually unsecured and for

shorter period. Thus, the Adjudicating Authority is required to admit the CIRP

application under Section 9(2) of the Code, if the application is complete and

there is no payment of unpaid operational debt, invoices have been delivered, no

notice of disputes has been received by the Operational Creditor or there is no

record of dispute in the information utility.

Page 14 of 27

Comp. App. (AT) (Ins.) No. 1155 of 2024

40. At this stage, we take into consideration the relevant portion of the

Impugned Order which deal with the issue of pre-existing dispute which reads as

under :-

"40. Mr. Rishav Baneijee, Ld. Counsel for the Respondent has brought to our notice that there is a plethora of disputes which have been raised prior to receipt of the statutory notice of demand under Section 8 of the Code on 26.09.2020. he has furnished a list mentioned in Para 26 of this Order, concerning those disputes raised prior to receipt of statutory demand notice dated 26.09.2020 as well as the disputes raised post issuance of completion certificate dated 07.11.2016. We have perused the corresponding communications and emails from which it would be evident that since 2015, the Respondent has raised several defects in the contractual work of the Applicant.

44. Thus, from the factual position and decisions enumerated supra, it would be apparent that there existed a pre-existing dispute concerning the contractual work between the parties prior to the receipt of the statutory notice of demand under Section 8 of the Code. Thus, being a non-recovery forum, this Adjudicating Authority having the legislative intent not to prosecute the debtor rather to resolute it's business by putting it into corporate insolvency resolution process when the "debt" and "default" is established."

(Emphasis Supplied)

41. We note that in para 41 to 43 (not reproduced above), the Adjudicating

Authority has referred to the judgment passed by the Hon'ble Supreme Court of

Page 15 of 27 Comp. App. (AT) (Ins.) No. 1155 of 2024

India in the matter of Innoventive Industries Ltd. vs. ICICI Bank and Ors.

[(2018) 1 SCC 407]; Umesh Saraf vs. Tech India Engineers Pvt. Ltd.

[MANU/NL/0385/2020];and one judgment passed by this Appellate Tribunal

which Adjudicating Authority has referred in their impugned order passed in M/s

Kuntal Construction Pvt. Ltd. vs. M/s Bharat Hotels Ltd. [(2020) ibclaw.in 69

NCLAT] justifying that the pre-existing dispute of any nature are not required to

be adjudicated by the Adjudicating Authority. The Adjudicating Authority is

only required to satisfy himself whether pre-existing dispute existed or not.

42. As noted earlier that demand notice under Section 8 of the Code was issued

on 26.09.2020, which was replied by the Respondent on 08.10.2020. In the reply

the Respondent stated that there are several disputes prior to the receipt of the

demand notice dated 26.09.2020.

43. At this stage, we would like to reproduce para 4 of the reply by the

Respondent dated 08.10.2020, which reads as under :-

Page 16 of 27

Comp. App. (AT) (Ins.) No. 1155 of 2024

Page 17 of 27 Comp. App. (AT) (Ins.) No. 1155 of 2024

Page 18 of 27 Comp. App. (AT) (Ins.) No. 1155 of 2024

Page 19 of 27 Comp. App. (AT) (Ins.) No. 1155 of 2024

Page 20 of 27 Comp. App. (AT) (Ins.) No. 1155 of 2024

Page 21 of 27 Comp. App. (AT) (Ins.) No. 1155 of 2024

44. From above, it is quite clear that the Respondent has been constantly

raising issue regarding quality of work which tantamount to pre-existing disputes.

It may also be kept in view that the Adjudicating Authority is conducting

summary proceedings and is not expected to go in detailed scrutiny of evidence.

The Adjudicating Authority should look into whether the dispute tantamount to

be substantial, genuine and bona-fide and not spurious, speculative, illusory or

misconceived. The Adjudicating Authority at the stage of admission of CIRP is

not expected to hold a full trial in the matter and it must be decided whether the

ground appears to be substantial. It is also a settled law that if such operational

debt are bona-fide disputed on substantial ground, the Adjudicating Authority

ought to dismiss the petition and such parties are required to seek other alternative

legal recourse.

45. In this connection, we will also refer to the judgment of the Hon'ble

Supreme Court in the matter of Innoventive Industries Ltd. vs. ICICI Bank and

Ors. reported in MANU/SC/ 1063/ 2017: (2018) 1 SCC 407 which reads as

under:-

"29. [...] Under Section 8(2), the corporate debtor can, within a period of 10 days of receipt of the demand notice or copy of the invoice mentioned in Sub-section (1), bring to the notice of the operational creditor the existence of a dispute or the record of the pendency of a suit or arbitration proceedings, which is pre-existing - i.e. before such notice or invoice was received by the corporate debtor. The moment

Page 22 of 27 Comp. App. (AT) (Ins.) No. 1155 of 2024

there is existence of such a dispute, the operational creditor gets out of the clutches of the Code."

(Emphasis Supplied)

Above clearly support the cause of the Respondent. The Impugned Order

also draws full support from above judgement. We note that the Respondent has

indeed sent as many as 89 emails raising several issues or defects, which clearly

indicates pre-existing disputes.

46. By no statute of imaginations, the Adjudicating Authority is expected to

look into 89 said e-mail sent by the Respondent to the Appellant, before demand

notice by received by the Respondent. Thus, we do not find any error in the

Impugned Order on the issue regarding pre-existing dispute.

47. Now, we will take up issue regarding the completion certificate issued by

the Respondent and its implications. Although once, pre-existing dispute issue is

decided in favour of the Corporate Debtor, then there is no need to go into any

further as Section 9 application cannot be admitted.

48. We note that the Respondent has taken several caveats while issuing the

completion certificate. The completion certificate reads as under :-

Page 23 of 27

Comp. App. (AT) (Ins.) No. 1155 of 2024

Page 24 of 27 Comp. App. (AT) (Ins.) No. 1155 of 2024

49. From above, it is seen that the completion certificate was issued subject to

Appellant abiding to all the contractual obligations emanated from the work order

including but not limited to renewal of bank guarantee, payment of settlement of

subject contractors, composition of claims, rectification of defect liabilities other

litigations. It is also important to note that the caveat regarding DLP has

categorically stated that the Appellant is bound to rectify all the defect liabilities

to Respondent's satisfaction within DLP, failing which of such defects will be

removed by the Respondent at the cost and expenses of the Appellant to be paid

on demand. We note that an independent cost accessor, namely, (Currie &

Browne (India) Limited) (who has no relationship with the Corporate Debtor) has

identified defects and has advised amount of Rs. 3,62,67,257/- regarding

liquidator damage.

50. Looking into the completion certificate, we are conscious of the fact that

completion of project in time, along with requisite quality, is the heart of the

contract management. It can be no one's case that extra-ordinary delay which

changes viability of the project can be simply brushed aside and should not be

taken into consideration while deciding Section 9 application under the Code by

the Adjudicating Authority. Simultaneously, we also need to acknowledge the

fact that in commercial world, occasional delay may happen and may be

attributable to both parties. We also need to factor into consideration, if finally,

project was completed to satisfaction of the Corporate Debtor and whether

the same was accepted by the Corporate Debtor without any caveats and

Page 25 of 27 Comp. App. (AT) (Ins.) No. 1155 of 2024

qualification. In the instant appeal we note carefully that the Corporate Debtor

issued the completion certificate with many caveats. In such background, the

alleged completion certificate, cannot be treated as acceptance of work to

satisfaction the Corporate Debtor, ignoring 89 emails sent by the Respondent to

Appellant on pre-existing dispute prior to receipt of Demand Notice. Thus, the

above mentioned completion certificate cannot be treated as without any caveat

or clear certification the work, as claimed by the Appellant and therefore, do not

support cause of the Appellant.

51. On this aspect of completion certificate, the relevant portion of the

Impugned Order reads as under :-

"48. Thus, we are of the view that the issuance of Work Completion Certificate would not bar the Corporate Debtor from raising any genuine disputes relating to the services rendered by the Operational Creditor, when, the Work Completion Certificate itself provides a specific clause that the issuance of Work Completion Certificate does not exempt the Operational Creditor its liability to rectify its defect and failing such, the defect would be removed at the cost and expenses of the Operational Creditor.

(Emphasis Supplied)

We do not find any error in above finding by the Adjudicating Authority.

Page 26 of 27

Comp. App. (AT) (Ins.) No. 1155 of 2024

52. Based on above detailed analysis, we do not find any error in the Impugned

Order. The Appeal is devoid of any merit and stand rejected. No cost. I.A., if

any, are closed

[Justice Rakesh Kumar Jain] Member (Judicial)

[Justice Mohammad Faiz Alam Khan] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical)

Sim

Page 27 of 27