The National Company Law Tribunal has rejected Uniton Infra’s plea to initiate insolvency proceedings against Shapoorji Pallonji & Co over an alleged default of ₹4.31 crore linked to road resurfacing work in Nellore, Andhra Pradesh.
Uniton Infra had filed the petition under Section 9 of the Insolvency and Bankruptcy Code, which permits an operational creditor to seek insolvency proceedings against a company over unpaid operational debt. The contractor alleged that Shapoorji Pallonji had failed to pay for work carried out to resurface damaged cement concrete roads in the city.
The tribunal held that the claim did not satisfy the legal requirements for commencing insolvency proceedings. Uniton Infra had submitted two invoices in support of its petition. According to the tribunal, one of the invoices related to a period covered by the government’s Covid-era ban on filing bankruptcy cases, introduced to reduce economic distress during the pandemic.
The remaining claim was below the ₹1 crore minimum threshold required for initiating insolvency proceedings, the tribunal said. As a result, the petition could not proceed even though Uniton Infra had presented an overall claim of ₹4.31 crore.
The dispute arose from a public infrastructure project involving the resurfacing of damaged cement concrete roads in Nellore. Uniton Infra argued that Shapoorji Pallonji had received payments from the state’s public health and municipal engineering department and was therefore required to release the contractor’s dues under the terms governing the project.
Shapoorji Pallonji contested the insolvency petition. The company argued that the alleged outstanding amount was not due and payable. It also maintained that the relevant payments from the municipal corporation had not been received for the work in question.
The ruling highlights the importance of the legal threshold and timing requirements that apply when contractors seek to use insolvency proceedings to recover payments from companies executing public or municipal infrastructure work. An alleged payment dispute does not automatically qualify for admission under the Insolvency and Bankruptcy Code when the relevant debt falls within a statutory exclusion or below the prescribed threshold.
The case also reflects the payment chain involved in urban road projects, where municipal or government departments may engage a principal contractor that in turn relies on specialist contractors for execution. In such arrangements, the release of payment can become contested when the principal contractor disputes whether it has received the corresponding project funds or whether the claimed amount is legally payable.
The tribunal’s decision closes Uniton Infra’s Section 9 insolvency route on the grounds recorded in the order: one invoice was affected by the Covid-era filing restriction and the remaining claim did not meet the ₹1 crore threshold. The supplied report does not state whether Uniton Infra has pursued or plans to pursue any separate recovery remedy.