DBM Geotechnics & Constructions (P) Ltd. v. Dighi Port Ltd.

INSOLVENCY AND BANKRUPTCY CODE, 2016

--Initiation of corporate insolvency resolution process by operational creditor --Petition filed against non-payment of construction of multi-purpose berthObjection raised as to changing of nature of claim--Operational debt neither became financial debt nor something else merely because consent terms arrived at between parties--Though merely because consent terms were arrived at between operational creditor and corporate debtor, operational debt would neither become financial debt nor something else, the corporate debtor had committed default in non-making payment of construction of multi-purpose berth and also not raised any objection regarding existence of dispute, therefore, petition under section 9 filed by the operational creditor was admitted.--Operational creditor provided services of construction of multi-purpose berth to corporate debtor, but the corporate did not pay amount of the services to the operational creditor. Therefore, the operational creditor filed petition under section 9 for initiation of corporate insolvency resolution process against the corporate debtor. Corporate debtor raised objection that the operational creditor entered into consent terms with it, therefore, operational debt would become financial debt. Held: Merely because consent terms arrived at between the parties, operational debt would neither become financial debt nor something else, the nature of the claim remained the same. It had to be treated as the operational debt, because the corporate debtor had committed default in making the payment. Further that, the corporate debtor had also not raised any objection that dispute was in existence with regard to the services provided by the operational creditor. Hence, the petition was admitted.