Vikram Solar moves NCLAT against insolvency admission order
Vikram Solar Ltd has filed an appeal before the National Company Law Appellate Tribunal (NCLAT) challenging an order of the Kolkata bench of the National Company Law Tribunal (NCLT) that admitted an insolvency petition against the company. The appeal has been filed even as the Corporate Insolvency Resolution Process (CIRP) has commenced, with the Interim Resolution Professional (IRP) issuing a public invitation for claims from stakeholders.
The insolvency case arises from a payment dispute with operational creditor Isitva Steels Private Limited, which claimed outstanding dues of Rs 9.44 crore related to subcontracting work executed for an Andhra Pradesh Power Generation Corporation (APGENCO) solar project, where Vikram Solar acted as the engineering, procurement and construction (EPC) contractor.
Background of the dispute
According to the NCLT order, Isitva Steels was engaged by Vikram Solar in February 2018 to carry out civil works for the APGENCO project. The work was completed in December 2018, and Vikram Solar issued a performance certificate in October 2019 acknowledging satisfactory completion.
Isitva Steels subsequently claimed that payments relating to retention money, pending running account (RA) bills and interest remained unpaid. Following discussions in December 2019, Vikram Solar reportedly agreed to settle dues amounting to Rs 4.60 crore by January 15, 2020, against a total claim of Rs 8.15 crore.
According to Isitva Steels, Vikram Solar later made payments of Rs 1.60 crore, followed by Rs 3.44 crore by February 2022 and a further Rs 70 lakh in October 2022, leaving a portion of the dues unpaid.
NCLT findings
Vikram Solar opposed the insolvency petition, arguing that both parties had entered into a full and final settlement in December 2019 and that payments aggregating Rs 4.14 crore had already been made.
The company also contended that the dispute related to non-payment of settlement instalments rather than operational debt. It further argued that the claim amount had been inflated through disputed interest calculations, which could reduce the principal amount below the Rs 1 crore threshold prescribed under the Insolvency and Bankruptcy Code (IBC).
The NCLT rejected these arguments on June 12. The tribunal held that the debt originated from the execution of civil works and therefore qualified as an operational debt under Section 5(21) of the IBC.
The tribunal further observed that the December 2019 settlement only restructured the payment obligations and did not extinguish the underlying contractual liabilities, particularly as the settlement had not been fully implemented. It concluded that the amount in default exceeded the statutory threshold and that no pre-existing dispute existed that would prevent admission of the insolvency application.
Appeal before NCLAT
In a stock exchange filing on Monday, Vikram Solar said that Sameer Nagpal, the suspended director of the company, has filed an appeal before the NCLAT against the NCLT order. The company stated that the appellate tribunal is scheduled to hear the matter on June 24.
The company also disclosed that IRP Tripti Agarwal has issued a public announcement inviting claims from financial creditors, operational creditors, employees and other stakeholders. The announcement has been published in newspapers in accordance with Insolvency and Bankruptcy Board of India (IBBI) regulations.
The issuance of the public announcement indicates that the CIRP has commenced and will continue unless the NCLAT grants relief or stays the NCLT admission order.
