National Company Law Tribunal, Mumbai: In an application filed by EnQuest PetroSolutions Private Limited under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) read with seeking initiation of Corporate Insolvency Resolution Process (CIRP), the two-member Bench of Nilesh Sharma (Judicial Member) and Sameer Kakar (Technical Member) observed that from the evidence and materials, it was clear that there was existence of the financial debt exceeding the minimum threshold of Rs.1 Crore prescribed under Section 4 of the IBC due and payable by the respondent as well as the default in repayment thereof by the respondent.
The Tribunal observed that all the pre-requisites of application filed under Section 9 of IBC by the applicant for initiating CIRP were fulfilled and accordingly admitted. The Tribunal further declared a moratorium under Section 14 of IBC with directions.
Background:
The applicant filed an application under Section 9 of IBC read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Sparklet Engineers Private Limited, the Corporate Debtor-respondent. The amount claimed to be in default was Rs. 9,19,96,841 and the date of default was stated as 1-1-2023.
The applicant submitted that it was engaged in providing services in the oil and gas sector seismic operations and the respondent was inter alia engaged in the business of design of upstream and downstream oil and gas equipment.
The respondent was awarded a contract from Haliburton Offshore Services Inc. for the provision of integrated Field Plan execution services in Satellite Fields in Barmer, in 2019. The respondent engaged the applicant for Satellite Fields Civil Work, project management of certain Satellite Fields Civil Works, at Barmer and accordingly issued the work orders. The applicant performed the assigned works from September 2019 onwards and regularly raised proforma invoices with supporting documentation for verification by the respondent. However, despite repeated assurances, the respondent failed to verify the invoices or make payments. The total amount payable by the respondent to the applicant was Rs.7,29,59,159 and out of which, the respondent made a payment of Rs. 50,00,000. After deduction of TDS, the applicant received a net sum of Rs.49,25,000. However, the deducted TDS had not been deposited with the tax authorities, and consequently, the applicant was unable to avail the benefit of such deduction. Thus, the total amount outstanding on the respondent’s part was Rs.6,79,59,159.
The applicant was registered as an MSME under the Micro, Small, and Medium Enterprises Development Act, 2006 (MSMED Act). Under Section 16 of the MSMED Act, the respondent was liable to pay interest on the principal outstanding at three times the bank rate notified by the Reserve Bank of India, compounded monthly. Accordingly, with interest, the total amount payable Rs.9,19,96,841. The entire operational debt had been consolidated between the applicant and the respondent in the Vendor Settlement Agreement (VSA) dated 29-3-2022. The respondent submitted that the VSA dated 29-3-2022, governed the entire relationship between the parties and superseded previous invoices, work orders, or earlier agreements. It argued that this agreement represented a mutual understanding to restructure dues, not an acknowledgment of operational debt under Section 5(21) of the IBC. The respondent contended that the applicant’s claim arose from a commercial settlement agreement and not an operational debt within the meaning of the IBC.
Analysis, Law and decision:
The Tribunal observed that while the respondent did not dispute the execution of the works, it contended that all payments were subsequently settled through VSA. Further, it was undisputed that certain instalments under this VSA remained unpaid. The Tribunal observed that the present application under Section 9 of the IBC was filed by the applicant, alleging default in respect of the unpaid amounts. The respondent had made multiple acknowledgments through correspondence and from the email of the respondent it was clear that it was unable to pay the outstanding payment to the applicant. The Tribunal noted that as per the VSA the schedule of the outline was laid out, and the respondent paid the first tranche amountand no further payments came through the respondent. In view of these acknowledgments from the respondent, the Tribunal observed that the respondent had defaulted in paying the outstanding dues to the applicant.
The Tribunal relied on Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd., (2018) 1 SCC 353, wherein, it was held that where there exists a plausible dispute prior to the issuance of the demand notice, the Adjudicating Authority must determine the existence of a debt and the occurrence of default, and that there exists no pre-existing dispute before the issue of demand notice and observed that there existed a debt and default on part of the respondent and no pre-existing dispute was raised by the respondent.
The Tribunal observed that the applicant had filed the application within a limitation period from the date of default, when the admitted debt became due and payable. The Tribunal held that the respondent had failed to establish that the application was filed to extract money from the respondent and the applicant was able to establish the existence of debt recoverable from the respondent and the default was committed by the respondent. The Tribunal observed that from the evidence and materials, it was clear that there was existence of the financial debt exceeding the minimum threshold of Rs.1 Crore prescribed under Section 4 of the IBC due and payable by the respondent as well as the default in repayment thereof by the respondent.
The Tribunal observed that all the pre-requisites of application filed under Section 9 of IBC by the applicant for initiating CIRP were fulfilled and accordingly admitted. The Tribunal further declared a moratorium under Section 14 of IBC with directions.
[EnQuest PetroSolutions (P) Ltd. v. Sparklet Engineers (P) Ltd., C.P. (IB)/99/MB/2025, decided on 8-12-2025]
Advocates who appeared in this case:
For the Appellant(s): Nausher Kohli, Jehan Fouzdar, Amrita N., Amrita D, Advocates
For Respondent(s): Rohan Agrawal, Akash Agarwal, Advocates