Claims Of Multiple Operational Creditors Arising From Different Work Orders Can't Be Clubbed Into Single Debt To Cross Threshold Limit: NCLT Chennai

The National Company Law Tribunal (NCLT) Chennai bench of Justice Sanjiv Jain (Judicial Member) and Venkataraman Subramaniam (Technical Member) has held that claims arising from different work orders cannot be clubbed to cross the threshold limit for filing an insolvency petition under section 9 of the IBC. Furthermore, claims of multiple Operational Creditors cannot be clubbed into a single debt for the purpose of a petition under section 9 of the IBC. The present petition has been filed under section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Petitioner submitted that the Corporate Debtor did not raise any dispute prior to filing of the petition regarding the quantity/quality of services rendered by the Petitioner rather it continued to avail the services and make the part payments. Per contra, the Respondent submitted that two entities / Operational Creditors cannot maintain a Section 9 petition merging their claims to artificially meet the threshold. The Tribunal noted that in the present case, the Petitioner submitted the project specific work orders issued by the Corporate Debtor mentioning the scope of work, value, start and completion date of services. Several invoices also mention the corresponding work order number thereby fortifying the claim of the Respondent that the work orders were project specific, not under a consolidated work order. Many claims are time barred. Based on the above, it held that the Petitioner appears to have consolidated invoices from different projects to cross the threshold limit of Rs. 1 crore and claimed that they were consolidated for the purpose of internal record keeping. This explanation is not justified and seems an afterthought. The Tribunal further noted that in the case of Amirsons Timber, it was held that when consolidated running ledger accounts are not maintained, different sites constitute different causes of action and limitation will operate independently without one affecting the other. Furthermore, in International Road Dynamics, it was held that distinct claims from different work orders with varying defaults cannot be consolidated into a single debt. It concluded that since in the present case the Petitioner consolidated the claims two entities, its own and that of its sister concern, in the second demand notice issued under section 8 of the IBC and the petition which is not permissible as per the judgment of the Yuvvraj Agarwal where it was held that a petition by multiple Operational Creditors under section 9 of the IBC is not maintainable. Accordingly, the present petition was dismissed. Case Title: Surasha Group of Companies Vs. ETA Engineering Pvt Ltd Case Number: CP(IB)/77/CHE/2024 Order Date: 11/07/2025 Click Here To Download Order/Judgement

Claims Of Multiple Operational Creditors Arising From Different Work Orders Can't Be Clubbed Into Single Debt To Cross Threshold Limit: NCLT Chennai

Mohd Malik Chauhan

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