NCLT Rejects Insolvency Plea Against Shapoorji Pallonji Over Rs 4.31 Crore Debt

The National Company Law Tribunal in Mumbai has rejected a petition filed by Uniton Infra Private Limited seeking the initiation of a Corporate Insolvency Resolution Process against Shapoorji Pallonji and Company Private Limited over an alleged operational debt of Rs 4.31 crore.

The tribunal held that the petition was barred by the COVID-19-related exclusion period under Section 10A of the Insolvency and Bankruptcy Code. It further ruled that the remaining claim of Rs 89.60 lakh fell below the mandatory statutory threshold of Rs 1 crore prescribed under Section 4 of the Code.

The dispute stemmed from municipal infrastructure works originally awarded to Shapoorji Pallonji and Company by the Nellore Municipal Corporation. Shapoorji Pallonji subsequently subcontracted part of the project to RKI Builders Private Limited for Rs 8.25 crore, and RKI later subcontracted the work to Uniton Infra.

RKI had raised two invoices against Shapoorji Pallonji: Invoice No. RKI/SPCPL 2020-21-01 dated September 15, 2020, for Rs 3,41,56,134, and another dated May 15, 2021, for Rs 89.60 lakh. Through an Assignment of Debt Deed executed on April 10, 2022, RKI assigned the cumulative debt of Rs 4,31,16,154 to Uniton Infra, which then served a demand notice seeking payment in May 2023.

The tribunal found that the September 15, 2020 invoice fell within the period covered by Section 10A, which prohibits insolvency filings under Sections 7, 9, or 10 for defaults occurring between March 25, 2020, and March 24, 2021. With that invoice excluded from adjudication, the remaining alleged default of Rs 89.60 lakh failed to meet the Rs 1 crore threshold under Section 4.

Shapoorji Pallonji had opposed the petition, asserting that it shared no direct contractual relationship with Uniton Infra. The company also maintained that payment obligations were conditional on receiving funds from the Nellore Municipal Corporation, adding that required measurements had not been certified by the civic body and no sum was due.

While rejecting the insolvency petition on threshold and Section 10A grounds, the tribunal turned down Shapoorji Pallonji's challenge to the debt transfer, ruling that Uniton Infra was not barred from acting merely because the debtor had not consented to the assignment.