industry

NCLT admits insolvency plea against infra firm Ahluwalia Contracts


The bankruptcy court has admitted an insolvency resolution plea filed by an operational creditor against Delhi-based listed realty firm , over a default of more than Rs 14 crore.

Interior designing firm A2 Interiors Products had approached the Delhi-bench of the National Company Law Tribunal (NCLT) claiming that Ahluwalia Contracts, a company behind landmark structures including Hotel ITC Royal Gardenia in Bengaluru, Leela Hotel in New Delhi and the Ranchi airport terminal building, failed to clear its dues.

A2 Interiors, as per the tribunal’s order, was engaged by Ahluwalia Contracts for the interior, furnishing and allied civil and electrical works at multiple sites. It told the tribunal that on May 9, 2019, it had sent a demand notice to Ahluwalia Contracts for Rs 12.54 crore of dues along with 18% interest.

The construction firm, while countering the petition in the tribunal, argued that the application was not maintainable. The demand related to different work orders, which cannot be claimed under one single application, it said.

“Considering the documents on records and submissions made, it is observed that there exists an operational debt which is due and payable by the corporate debtor,” said a division bench of judicial member Deepti Mukesh and technical member Sumita Purkayastha in its order of May 5. “Further, with respect to the maintainability of an application, with regards the issue that whether for various claims arising out of separate work orders, a single application can be filed by an operational creditor,” the NCLT said.

It appointed Satish Kumar Chugh as the interim resolution professional for the company.

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As per the BSE website, Ahluwalia Contracts had reported revenue of Rs 1,884 crore and a net profit of Rs 64.44 crore in fiscal 2020.

“This order will set precedent in many cases where an employer (corporate debtor) is not paying its contractors (operational creditors),” said Mohit Chaudhary, managing partner of law firm Kings & Alliance, who advised the petitioner company in the case. “Many other contractors and vendors struggling to get dues will be able to use this order as precedent.”



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