NCLT Kolkata admits 104-year-old government company into insolvency process

The National Company Law Tribunal (NCLT) at Kolkata admitted a 104-year-old government-owned company into insolvency for a debt of over ₹4 crore. [Chevrox Construction Private Limited v. Bridge and Roof Co (India) Ltd].Bridge and Roof is a public sector enterprise under the Union Ministry of Petroleum and Natural Gas and comes under the administrative control of the Ministry of Heavy Industries.An Ahmedabad-based private construction company, Chevrox Constructions, approached the Kolkata bench seeking to initiate the corporate insolvency resolution process (CIRP) against Bridge and Roof for alleged default in payment of ₹4,47,90,393. .A coram of judicial member Rohit Kapoor and technical member Balraj Joshi admitted the company into insolvency, observing that there is a clear debt and default in repayment of debt. It appointed Subodh Kumar Agrawal as the interim resolution professional for the insolvency process. .Chevrox's petition highlighted that it had entered into eleven different Letters of Intent (LoIs) with Bridge and Roof for several portions of civil work in Gujarat. The LoIs were operative from December 2018 to February 2021.Along with the LoIs, Bridge and Roof provided schedule rates, on the basis of which Chevrox was required to procure material for executing work. Chevrox pointed out that even after it had completed all work, Bridge and Rof had failed to make the requisite payments. It sent a demand notice to Bridge and Roof under Section 8 of the Insolvency and Bankruptcy Code (IBC) in September 2022. When there was no response or payment on the notice, Chevrox approached the NCLT. .Bridge and Roof opposed the application, arguing that Chevrox had failed to complete its work. It further argued that Chevrox did not submit a final bill for payment within three months from physical completion of the work..The tribunal observed that Bridge and Roof accepted dues up to June 2020 and the bills for the later period was under consideration. "Thus, there is an acceptance of debt and payment for the same has not been made. No objection has been raised after despite several correspondences made by the Operational Creditor," the tribunal said. .The Kolkata bench also clarified that even though Bridge and Roof was a government-owned company, it fell under the purview of the IBC."It is clear that Bridge and Roof is a company and because 99.35 % shares of the Company are held by Government of India it is a government company. IBC 2016 makes no distinction between a government company or a private or public company for insolvency resolution and hence Bridge and Roof shall fall under the purview of IBC," the tribunal recorded in its order. .Advocates Rohit Mukherji and Labanyasree Sinha appeared for Chevrox.Advocates Neelina Chatterjee and Suvodeep Chakraborty appeared for Bridge and Roof..[Read order]