Gammon Engineers and Contractors to face insolvency proceedings for failing to pay Rs 94 lakh
Gammon Engineers and Contractors Pvt Ltd, one of India’s most well-known civil engineering construction companies, will have to undergo corporate insolvency resolution process (CIRP) for failing to make a payment of Rs 94.23 lakh to one of its vendors.
Masstrans Technologies Private Limited, an urban traffic solution company had moved the insolvency petition against Gammon Engineers and Contractors after the latter failed to make the earlier mentioned amount for subcontract works for design, supply, installation, testing and commissioning of Highway Traffic Management System of Gorakhpur Bypass Project on NH-28 in the State of Uttar Pradesh.
According to the insolvency application submitted under Section 9 of the Insolvency and Bankruptcy Code, between 7 July 2016 and 27 June 2017, operational creditor Masstrans Technologies had raised various invoices upon the corporate debtor — Gammon Engineers and Contractors — for the goods provided and services rendered by it, amounting to Rs 2.25 crore. Out of the total amount of debt, the Corporate Debtor has advanced a payment of Rs. 1.31 crore to the Operational Creditor leaving a balance amount of Rs. 94.23 lakh which is due and payable to the Operational Creditor by the Corporate Debtor.
Gammon Engineers and Contractors Pvt Ltd had contended in its defence against the insolvency petition that the original work order was issued by Gammon India Limited but the actual work was done by the Operational Creditor in respect of project site of Gammon Infrastructure Projects Limited and some of the bills were also paid by the Gammon Infrastructure Projects Limited and therefore there is no privity of contract between the operational creditor and the corporate debtor and thus the corporate debtor is not liable to pay the amounts claimed by the operational creditor.
However, the NCLT bench of HV Subba Rao, member (Judicial) and Shyam Babu Gautam, member (Technical), were of the opinion that the corporate debtor being the transferee of Gammon India Limited cannot deny the unpaid bills of the operational creditor. “Mere forwarding of the bills submitted by the operational creditor to Gammon Infrastructure Projects Limited by the Corporate Debtor does not absolve the corporate debtor from its liability. There was no dispute with regard to the debt and default in this case. The respondent has not sent any reply to the demand notice issued by the petitioner,” observed the NCLT while admitting the insolvency petition.
Vasudev Ganesh Nayak Udupi has been appointed as the interim resolution professional.
Gammon Engineers and Contractors, the Rs 1,600 crore turnover company (As on 31 March 2020), is into construction of roads, bridges and other utility projects. The company which was once an associate company of Gammon India ceased to be the associates of the latter after the invocation of pledge by the lenders of the Gammon India in the former.
Also see: Resolution Plans
Also See: Data/statistics on insolvency
