NCLT Delhi Dismisses CIRP Plea Against WAPCOS Over Pre-existing Disputes
The Delhi bench of the National Company Law Tribunal has dismissed an insolvency plea against Mini-Ratna Government of India undertaking WAPCOS Limited.
The bench found that WAPCOS had raised concerns over the quality and completeness of survey work well before the payment demand was issued.
The bench of Judicial Member Manni Sankariah Shanmuga Sundaram and Technical Member Reena Sinha Puri observed,
“The material placed on record therefore shows that the Corporate Debtor had raised issues concerning the quality, completeness and contractual compliance of the work prior to issuance of the Demand Notice. These communications cannot be brushed aside as afterthoughts or moonshine defences raised only to evade payment.”
The Operational Creditor, Global Surveyors, engaged in surveyor services, was awarded multiple work orders by WAPCOS Limited, a Mini‑Ratna Government of India undertaking.
The creditor raised bills dated 28 March 2022. Partial payments were made by the Corporate Debtor, including lump‑sum amounts and GST remittances. The creditor issued a demand notice on 31 July 2025 and later filed the petition seeking initiation of Corporate Insolvency Resolution Process (CIRP).
The Corporate Debtor opposed the petition, contending that the creditor was attempting to use the insolvency framework as a recovery mechanism for disputed contractual claims. It argued that the work performed was defective, incomplete, and non‑compliant with contractual terms, and that communications highlighting deficiencies were exchanged.
It also raised objections on limitation, improper clubbing of distinct work orders, and invalid service of demand notice.
The creditor denied the existence of any dispute, claimed proper service of demand notice, and argued that limitation was extended by acknowledgment of liability.
The Tribunal, relying on the Supreme Court's ruling in Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd, emphasised that admission under Section 9 requires satisfaction of three conditions: existence of operational debt above threshold, evidence of default, and absence of pre‑existing dispute.
The bench observed, “The expression 'existence of dispute' has been consistently interpreted to mean a genuine dispute which was raised prior to issuance of the demand notice. Such dispute need not necessarily be in the form of a pending suit or arbitration proceeding; it may also be discerned from correspondence between the parties concerning the existence of debt, quality of goods or services, or breach of contractual obligations.”
It noted that correspondence between the parties, including emails and meetings in March–April 2024, demonstrated disputes regarding incomplete and unsatisfactory work well before issuance of the demand notice. The Tribunal clarified that Section 9 proceedings are summary in nature and not intended for detailed examination of contractual claims. Accordingly, the petition was rejected.
For Applicants: CS Anjan Kumar Roy, PCS, CS Sandip Paul, PCS
For Respondents: Advocates Tushar Sannu, Priyankar Tiwary, Pulak Gupta Joshi & Mohit Bhardwaj