Redpro Constructions Private Limited vs Skyline Infratech Private Limited

Comp. App. (AT) (Ins) No. 1630 of 2023 & I.A. No. 5889 of 2023

(Arising out of the Order dated 16.10.2023 passed by the National Company Law Tribunal, New Delhi, Court-V in Company Petition (IB) No. 309/ND/2022.

Redpro Construction Private Limited Through its Authorised Representative Having its registered office at: 8233, Rani Jhansi Road, Near Filmistan Cinema, Delhi- 110006 Email: mail@redpro.us ...Appellant

Versus Skyline Infratech Private Limited (CIN No. U74210DL1999PTC102058) Having its registered office at: Sh. Anil Kumar Vasvani, Director A-14, Basement, Kailash Colony, New Delhi - 110048 Email: hr@skylineinfratech.com, anilkr.vaswani@gmail.com, sky_contract@hotmail.com

Also at: B-12, Greater Kailash Enclave -I, New Delhi - 110048

Also at: BP-6, Ring Road, Lajpat Nagar, NH-IV, New Delhi - 110024 ...Respondent Present For Appellants: Ms. Kanika Singhal, Ms. Richa Tripathi & Ms. Deepshikha, Adv.

For Respondent: Mr. Anuj Agarwal, Adv.

JUDGEMENT

( 21.11.2025)

NARESH SALECHA, MEMBER (TECHNICAL)

1. The present appeal has been filed by the Appellant i.e., Redpro

Construction Pvt. Ltd. under Section 61 of the Insolvency and Bankruptcy Code,

2016 ('Code') against the Impugned Order dated 16.10.2023 passed by the

National Company Law Tribunal, New Delhi, Court -V ('Adjudicating

Authority') in CP IB No. 309/ND/2022.

Skyline Infratech Pvt. Ltd. who is the Corporate Debtor, is the Respondent

herein.

2. The Appellant submitted that the Respondent had been engaged in

executing works for the project of M/s Jaiprakash Associates Limited,

Kensington Boulevard, Noida, in respect of Towers No. 7, 12, 14, 19, 20, 21, and

22 pursuant to three separate agreements dated 17 July 2017 concerning Civil,

Electrical, and Plumbing works for the said project. The Appellant further

submitted that, being unable to execute the abovementioned works

independently, the Respondent approached the Appellant for necessary financial

and working assistance. Consequently, three distinct work orders dated

Page 2 of 16 25.02.2017 were issued by the Respondent in favour of the Appellant for the

execution of Civil, Electrical, and Plumbing works.

3. The Appellant submitted that, in order to foster and maintain a healthy

commercial relationship, there was mutual flexibility between the parties in the

adjustment of payment terms from time to time. The Appellant stated that

payments received from the Respondent were consistently adjusted against

outstanding invoices through the maintenance of a running and recurring account

in the name of the Respondent. It is further submitted that the last part payment

amounting to Rs. 9,16,000 was received by the Appellant on 15.10.2019 and the

same was duly appropriated towards the pending invoices.

4. The Appellant submitted that, despite repeated requests, no further

payments were forthcoming from the Respondent. Accordingly, a demand notice

under Section 8 of the Code was issued to the Respondent on 16.09.2021. The

Respondent failed to respond to the said notice and did not raise any dispute

regarding the existence or quantum of debt or default. Consequently, on

21.02.2022, the Appellant proceeded to file its Petition under Section 9 of the

Code, seeking initiation of the Corporate Insolvency Resolution Process (CIRP)

against the Respondent/Corporate Debtor.

5. The Appellant submitted that the Impugned Order passed on 16.10.2023

dismissing the Section 9 Petition is erroneous as the Adjudicating Authority failed

to consider that even excluding the invoice dated 10.05.2020, amounting to

Rs.1,67,296, allegedly within the period covered by Section 10A of the Code, the

Page 3 of 16 total default in the Section 9 Petition was Rs.1,40,96,295, which clearly exceeds

the statutory threshold of Rs.1 crore. After excluding the invoice raised within

the Section 10A period, the remaining default amount still exceeds Rs.1 crore,

thereby satisfying the criteria for initiating insolvency proceedings. The

Appellant further submitted that the debt has been subsisting continuously since

2017 and maintained as a running account, thereby establishing the existence of

default beyond the Section 10A period and satisfying the statutory mandate for

initiating insolvency proceedings.

6. The Appellant submitted that the Adjudicating Authority erred in

dismissing the Section 9 Petition without adhering to the binding precedent laid

down by this Appellate Tribunal in Naresh Chaudhary, Suspended Director of

Nik-San Engineering Company Limited v. Sterling Enamelled Wires Private

Limited and Anr., (Company Appeal (AT) (Insolvency) No. 39 of 2023), dated

16.08.2023.

7. The Appellant submitted that the Adjudicating Authority erred in relying

upon the judgment of Yatra Online v Ezeego One Travel and Tours Ltd.,

Company Appeal (AT) (Ins) No. 387 of 2023, which has been appealed before

the Hon'ble Supreme Court of India. The Supreme Court, by its order dated

02.05.2023 in Civil Appeal No. 2889 of 2023, left the question of law open and

did not render any final decision on the matter. The Adjudicating Authority

further erred in applying the said judgment, which is factually distinguishable

Page 4 of 16 from the present case as it involved an attempt to alter the date of default a

scenario not applicable here.

8. The Appellant submitted that the existence of debt and default stands

conclusively proved through the invoices, bank statements, and ledger accounts

furnished.

9. Concluding his arguments, the Appellant requested this Appellate Tribunal

to allow the present appeal.

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

as misleading and baseless.

11. The Respondent submitted that the Appellant filed an application bearing

No. IB 309(ND)/2022 dated 21.02.2022 before the Adjudicating Authority,

seeking initiation of CIRP on account of an alleged operational debt default of

Rs.1,40,96,295/- inclusive of interest; however, the Respondent only became

aware of the proceedings at a belated stage due to unavoidable circumstances,

promptly appearing to contest the application on grounds of the Appellant's

fraudulent and malicious intent, as well as inherent technical defects therein.

12. The Respondent submitted that the petition misleads this Appellate

Tribunal by fixating on a single invoice of Rs. 1,79,463/- during the Section 10A

prohibited period (25.03.2020 to 24.03.2021), claiming its exclusion would

sustain maintainability, while disregarding the Adjudicating Authority order

dated 16.10.2023, which upheld Section 10A's absolute bar on CIRP initiation for

any defaults therein, requiring clear proof of such defaults for its invocation. The

Page 5 of 16 order is squarely based on Section 10A's statutory mandate, as affirmed in

precedents like B. Sreekala v. M/s. Al Sadiq Sweets [CA (AT) (Ins.) No.

55/2021] imposing a blanket ban; Ramesh Kymal v. M/s. Siemens Gamesa (CA

No. 4050/2020) barring applications for suspension-period defaults to aid

corporate revival; and Yatra Online Ltd. v. Ezeego One Travel [CA (AT) (Ins.)

No. 387/2023] prohibiting revision of Section 8/9 claims to evade Section 10A.

13. The Respondent submitted that the total claim in the Section 8 notice is

intrinsically linked to defaults occurring during the Section 10A excluded period.

The Respondent submitted that as it is settled law that a valid Section 8 notice is

sine qua non for filing a Section 9 application. Given that the defaults occurred

during the suspended period under Section 10A, any Section 8 notice based on

such default cannot be considered valid.

14. The Respondent further submitted that according to the ledger at page 74

of the petition, there is a liability of Rs. 1,18,35,609.40 towards Skyline Infratech;

however, the Appellant claims an amount of Rs. 1,40,96,295, without offering

any explanation for this excess.

15. The Respondent submitted that an agreement existed between the parties,

which stipulated that disputes be referred to arbitration; yet, the Appellant filed

the present appeal without sending any prior communication or invoice to the

Corporate Debtor/ Respondent. Moreover, the Corporate Debtor/Respondent

provided scaffolding and equipment worth over Rs. 1.75 crores to the Appellant,

which remain in use and have not been accounted for as adjustments. No proof

Page 6 of 16 of work done or verification has been produced by the Appellant, and emails

dated 19.06.2019 and 20.06.2019 reveals that the Appellant failed to raise bills

consistently. Additional emails further indicate that the Appellant violated terms

and conditions of M/s Jai Prakash Associates Limited, leading to cancellation of

all work orders.

16. The Respondent submitted that the Legal Notice issued by the Operational

Creditor/Appellant suffers from multiple defects rendering it ineffective. The

Legal Notice was neither served physically at the office of the Corporate Debtor

(CD) via speed post, which was sealed by NDMC in 2019, nor was there any

email communication traceable, as the CD lacked technical staff to monitor

emails regularly. Furthermore, the name of the OC appearing on the Legal Notice

is inconsistent. The Legal Notice also failed to annex crucial documents such as

ledgers, invoices, or supporting evidence either by physical delivery or email,

despite clear mandates.

17. It is the case of the Respondent that the Appellant/OC baselessly alleges

that the CD received or adjusted payments in respect of other projects,

disregarding the fact that the cancellation of CD's work orders by M/s Jai Prakash

Associates Limited was a direct consequence of the Appellant's mismanagement.

Moreover, the Appellant has maliciously assumed work orders in their own name

from M/s Jai Prakash Associates Limited. It was the Appellant's duty to recover

the claimed amount from M/s Jai Prakash Associates Limited, but having failed

in this, the OC is now making a false claim against the CD.

Page 7 of 16

18. The Respondent submitted that the invoices raised by the Appellant are

fundamentally defective as the Appellant failed to raise invoices on a back-to-

back basis, and the invoices were raised without prior approval or verification of

the work performed by M/s Jai Prakash Associates Limited, and no documentary

proof substantiating such approval or verification has been annexed with the

application.

19. The Respondent submitted that the invoices raised were excessive and

disputed by M/s Jai Prakash Associates Limited, who refused payment,

prompting the Appellant to approach the Adjudicating Authority on inflated

claims.

20. The Respondent submitted that the Operational Creditor (OC) failed to

perform the work to the satisfaction of M/s Jai Prakash Associates Limited, which

was an essential term of the Work Order. Numerous complaints regarding

inefficiency, poor quality of work, substandard materials, and delays in

performance by the OC are evident from the record.

21. The Respondent submitted that there is no liability on the part of the

Corporate Debtor in the present matter. The Respondent submitted that a pre-

existing dispute exists between the Appellant and the CD, arising from the

Appellant's default in completing the assigned work orders. The CD was in

regular communication with the OC to resolve outstanding disputes, both related

to the work and payments.

Page 8 of 16

22. Concluding his arguments, the Respondent requested this Appellate

Tribunal to dismiss the appeal with cost.

Findings

23. Having noted the submissions of the Appellant and the Respondent, we

find that the issue is limited pertaining to one invoice no. RA-E-06 dated

10.05.2020 for Rs. 1,67,296/- which falls in 10A period as per the Code.

24. We note that the Adjudicating Authority has dismissed the Company

Petition bearing CP IB No. 309/ND/2022 filed by the Appellant under Section 9

of the Code, mainly on the reason that the said invoice dated 10.05.2020 falls

under 10A period.

25. We further note that the Adjudicating Authority has taken note of

judgement of the Hon'ble Supreme Court of India passed in Ramesh Kymal

(Supra) and according to which no application could be pursued for the default

for the period between 25.03.2020 to 24.03.2021.

26. We also note that the Adjudicating Authority clarified that as per Section

10 A of the Code, applications could not be accepted for defaults between

25.03.2020 and 24.03.2021; benefits under Section 10A apply only to defaults

within this period.

27. The Adjudicating Authority after noting above ratio of Apex Court further

held that since the invoice dated 10.05.2020 falls in 10A period and since no

application under Section 9 could not have been initiated, the demand notice

Page 9 of 16 dated 16.09.2021 issued by the Appellant to the Respondent under Section 8 of

the Code also deemed not to be valid. The Impugned Order also mentioned that

the segregation of claims is not possible after filing application under Section 9

of the Code. Thus, we find that the Impugned Order rejected the Section 9

application of the Appellant primarily on the ground that the demand notice

issued under Section 8 of the Code as well as the main application filed under

Section 9 of the Code was also on an invoice pertaining to the suspended period

for initiation of CIRP and petition could not have been entertained.

28. In this connection, we note that the Appellant brought to our notice that

there were 17 invoices against which part payments were received and only

invoice no. RA-E-06 dated 10.05.2020 falls in 10A period which is for Rs.

1,67,296/-. The details of various invoices for which payments were made by the

Respondent and outstanding bills have been filed in the appeal paper book at page

87 which is reproduced as under :-

Page 10 of 16 Page 11 of 16

29. We note that the prohibited period under Section 10A of the Code is from

25.03.2020 to 24.03.2021. Thus, only one invoice dated 10.05.2020 out of 17

invoices falls in 10A period.

30. The issue which need to be decided is whether if any invoice is falling in

10A period will prohibit or debars the OC to ever initiate Section 9 application or

the Section 9 can legally be initiated by the OC, if the other invoices pertained to

period prior or later than 10A stipulated time frame and only one or more unpaid

invoice falls in 10A period.

31. This issue has been examined by this Appellate Tribunal in the case of

Naresh Chaudhary, Suspended Director of Nik-San Engineering Company

Limited (Supra) and the relevant portion reads as under :-

"15. This brings us to the second issue for determination as to whether the debt arising out of the invoices fell during the period which attracts the bar of Section 10A of IBC. It is the case of the Appellant that the Operational Creditor has not provided the date of default either in the Section 8 demand notice or in the Section 9 application. Further, it has been stated that payments were to be made by the Corporate Debtor by way of LC which was to be created within 90 days from each invoice and hence the date of default would be 90 days post the date of each such invoice. Since the Appellant had not created any LC within a period of 90 days the default occurred on the 90th day from the day of invoice. After calculating the 90th day of these invoices, it has been contended that the date of default arises between

Page 12 of 16 01.05.2020 to 29.05.2020 which clearly falls in the ambit of Section 10A and hence barred from being subject to IBC proceedings.

16. Refuting the above, it has been submitted by the Learned Counsel for the Respondent No.1 that the Corporate Debtor had placed four purchase orders which find place at pages 272-275 of APB. Of the four purchase orders, only two purchase orders (3rd and 4th purchase orders) make reference to the creation of LC of 90 days. As regards the other two purchase orders (1st and 2nd purchase orders), there was no such stipulation of 90-day LC. Hence in respect of these two purchase orders, the date of default was the date of invoice. It was stated that the invoices raised under the 4th purchase order were anyways already excluded. It was further submitted that even if the 3rd and 4th purchase orders are excluded, the first two purchase orders cumulatively amount to default which is above the threshold limit of Rs.1 crore necessary for filing an insolvency application. We are satisfied with the reasoning offered by the Operational Creditor and do not find any force in the contention of the Appellant."

(Emphasis Supplied)

32. Based on above judgement passed by this Appellate Tribunal, even the

concerned invoice dated 10.05.2020 is excluded, the cumulative amount of

default is above the threshold limit of Rs. 1 Crores which is necessary for filing

an insolvency application. Once, it is concluded that the Section 9 was correctly

Page 13 of 16 filed by the Appellant as OC, based on the said invoice dated 10.05.2020 and

where 16 out of 17 invoices were prior to 10 A period, consequently it was valid

on the part of the Appellant to issue demand notice under Section 8 (1) of the

Code.

33. Thus, the Adjudicating Authority erred on both the accounts on not

considering the exclusion of one solitary invoice dated 10.05.2020 falling, in 10A

period ignoring that all other invoices are pertaining to non 10A period and

treating demand notice as not deemed valid under Section 8 of the Code.

34. As far as, Ramesh Kymal (Supra) case is concerned, as mentioned in the

Impugned Order, we find that the facts are different as this pertains to default

falling during 25.03.2020 to 24.03.2021 and not on the ground that one of the

invoice was falling in 10A period.

35. We further note that the Adjudicating Authority also relied upon the

judgement of Yatra Online (Supra) passed by this Appellate Tribunal, which was

challenged in the Hon'ble Supreme Court of India and we take note that while

disposing Civil Appeal No. 2889 of 2023 in the matter of Ezeego One Travel and

Tours Limited vs. Yatra Online Limited, the Hon'ble Supreme Court recorded

that "However, we make it clear that we have not gone into the question of law

and hence we leave it open." Incidentally, in case of Yatra Online (Supra), the

date of default was sought to be changed which is not the case here, therefore,

facts of the Yatra Online (Supra) are not similar to the present appeal.

Page 14 of 16

36. It has been brought to our notice that the existence of debt and default has

otherwise been proved by invoice, bank statement and major accounts for which

no adverse comments has been made by the Adjudicating Authority in the

Impugned Order.

37. We further refer to another judgement of this Appellate Tribunal delivered

in the case of Raghvendra Joshi v Axis Bank passed in Company Appeal (AT)

(Ins) 914 of 2023 and the relevant portion of the said order reads as under :-

"10. Section 10A never intended to cover the default which is continuing before Section 10A period...

15. The submission that since default was also committed by the Corporate Debtor during the Section 10A period of the OTS amount which ultimately withdrawn on 25th January, 2021, the 29 Application should be barred by Section 10A does not commend us. There being categorical default by the Corporate Debtor prior to Section 10A period, the Appellant was not clearly entitled for the benefit of Section 10A Period."

(Emphasis Supplied)

38. We find the present appeal is squarely covered by the above judgements

which are in favour of the Appellant.

39. Based on all above, we hold that the Adjudicating Authority has incorrectly

disallowed the petition filed by the Appellant. The Impugned Order is clearly hit

by this Appellate Tribunal's earlier judgments passed in the matter of Naresh

Page 15 of 16 Chaudhary, Suspended Director of Nik-San Engineering Company Limited

(Supra) and Raghvendra Joshi (Supra) as discussed above.

40. Thus, for the reasons mentioned herein before the Appeal succeeds and the

Impugned Order is set aside. The original petition bearing CP IB No.

309/ND/2022 is restored back before the Adjudicating Authority. Both the parties

are directed to appear before the Adjudicating Authority on 28.11.2025. The

Adjudicating Authority, shall decide the said case strictly in accordance with law

in view of the law discussed above. No cost. I.A., if any, are closed.

[Justice Mohammad Faiz Alam Khan] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical)

Sim

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