NCLT Mumbai Dismisses Insolvency Plea Against Shapoorji Pallonji

The National Company Law Tribunal (NCLT) at Mumbai on Friday dismissed Ovaron Infrastructure & MEP Services' insolvency plea against construction major Shapoorji Pallonji and Company Pvt. Ltd.

It found that the principal claim of ₹96.18 lakh remained below the Insolvency and Bankruptcy Code's ₹1 crore threshold. The claim crossed the threshold only after adding disputed interest under the Micro, Small, and Medium Enterprises Development (MSMED) Act and GST.

A bench of Judicial Member Nilesh Sharma and Technical Member Sameer Kakar held that Ovaron's entitlement to statutory interest under the MSMED Act itself was disputed. It observed that such questions could not be decided in summary insolvency proceedings.

"The entitlement to statutory interest itself thus becomes a subject matter requiring adjudication. Insolvency proceedings are not intended to determine complex questions relating to the applicability of special statutes, computation of statutory interest and adjudication of contested monetary claims. Such disputes necessarily fall outside the limited summary jurisdiction exercised under Section 9 of the IBC.", the tribunal ruled.

The dispute arose from work orders issued in 2020 for Mechanical, Electrical and Plumbing services at a hospital project in Assam.

After completing the work, Ovaron issued a demand notice in July 2024. It moved the NCLT in February 2025, claiming ₹1.20 crore, including interest under the MSMED Act.

It argued that the statutory interest formed part of the operational debt. It also relied on correspondence between the parties and Form 26AS to contend that Shapoorji Pallonji had acknowledged the dues.

Shapoorji Pallonji disputed the interest claim. It argued that the MSME registration came only after the relevant work order and therefore the principal claim of ₹96.18 lakh fell below the IBC threshold.

The tribunal rejected Ovaron's reliance on the correspondence. It held that the exchanges did not amount to an unconditional admission of the entire claim, including the disputed interest.

It held that the exchanges did not amount to an unconditional admission of the entire claim, including the disputed interest.

"Commercial correspondence indicating discussions regarding outstanding dues or requests for payment cannot, by themselves, bar the CD from raising legitimate disputes regarding quantum or entitlement.", the tribunal ruled.

The tribunal also ruled that the deduction of TDS reflected in Form 26AS was only a relevant circumstance. It was not conclusive proof of an undisputed operational debt.

The tribunal further noted that the Information Utility record itself described the claim as "Disputed". It held that this reinforced the existence of genuine disputes between the parties.

Holding that the principal claim remained below the statutory threshold, the tribunal found that the petition crossed it only after adding disputed MSMED Act interest and GST. It also found that Ovaron had failed to establish an undisputed operational debt exceeding ₹1 crore. The tribunal accordingly dismissed the insolvency petition.

For Applicant: Adv. Udayan Mukherjee a/w. Debashish Sinha, Adv. Rishav Ray

For Respondent: Adv. Amir Arsiwala a/w Adv. Ahmed Padela, Adv. Radha Naik i/b The Law Point