NCLT Chennai Holds Contractual Valuation Cannot Be Reopened, Dismisses Kamarajar Port Plea

The Chennai Bench of the National Company Law Tribunal (NCLT) on 2 April 2026, dismissed an application filed by Kamarajar Port Limited seeking a fresh valuation of project assets of Sical Iron Ore Terminals Ltd., which is in liquidation. 

A Bench comprising Judicial Member Jyoti Kumar Tripathi and Technical Member Ravichandran Ramasamy held that once the contractual mechanism for valuation had been triggered and concluded, it could not be reopened on the ground of subsequent deterioration of assets. It observed:

“The contention that valuation must be as on the date of transfer cannot be read in isolation so as to defeat the agreed contractual scheme, which clearly envisages determination of value upon termination through a defined process.”

The present application was filed by Kamarajar Port under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 (IBC). It sought a fresh valuation of the transfer assets through an expert to determine their fair value.

In 2006, the applicant entered into a licence agreement with the corporate debtor, SICAL Iron Ore Terminal, for a BOT (Build-Operate-Transfer) project. Under the arrangement, Kamarajar Port was required to provide common infrastructure, while the corporate debtor was obligated to construct, operate, and market the terminal and share revenue.

Following a ban on mining and export of iron ore, the project could not commence operations. The agreement was later modified in 2016 to enable coal handling. However, due to defaults by the corporate debtor, the licence agreement was terminated in March 2021. Corporate Insolvency Resolution Process (CIRP) was initiated thereafter, followed by liquidation in June 2023.

Kamarajar Port argued that the earlier valuation conducted in June 2021 had become outdated due to deterioration, obsolescence, and prolonged non-use of assets during CIRP and liquidation, warranting a fresh valuation.

Per contra, the liquidator opposed the application, stating that valuation had already been carried out in June 2021 by NTCPWC, IIT Madras, strictly in accordance with the licence agreement. It contended that all relevant factors, including obsolescence and incomplete construction, had already been factored in, and that a fresh valuation would amount to reopening a concluded contractual process.

The Tribunal noted that the licence agreement provided a clear mechanism for determination of compensation upon termination, including valuation by an independent expert and payment on the transfer date. It held that this mechanism stood triggered upon termination of the agreement on 22 March 2021. It further observed:

“It is a settled principle that a party cannot be permitted to derive benefit from its own default. Permitting the Applicant to rely upon a later, depreciated valuation would amount to allowing it to reduce its liability on account of its own inaction, which is impermissible both in law and equity.”

The Bench relied on the Supreme Court's decision in Ebix Singapore Pvt. Ltd. v. Committee of Creditors of Educomp Solutions Ltd., wherein it was held that commercial terms cannot be revisited dehors the framework of the Code.

It further held that since no ground of illegality or perversity had been made out to justify reopening the valuation, the adjudicating authority could not interfere in commercial and contractual arrangements, in line with K. Sashidhar v. Indian Overseas Bank.

Accordingly, the NCLT dismissed the application and declined to order a fresh valuation of the project assets.