NCLT Admits 104-Year-Old Government Company Bridge and Roof Into Insolvency

NCLT Admits 104-Year-Old Government Company Bridge and Roof Into Insolvency

Ahmedabad-based Chevrox Constructions had approached the tribunal for alleged default in repayment

The Kolkata bench of the National Company Law Tribunal (NCLT) has admitted a century-old government entity Bridge and Roof into insolvency for a debt of over Rs.4 crores.

In the Chevrox Construction Private Limited s. Bridge and Roof Co (India) Ltd case, a Coram of Rohit Kapoor (Judicial Member) and Balraj Joshi (Technical Member) observed that the company had defaulted in repayment of debts. It appointed Subodh Kumar Agrawal as the interim resolution professional for the insolvency process.

Bridge and Roof, a public sector enterprise under the Union Ministry of Petroleum and Natural Gas, is in the administrative control of the Ministry of Heavy Industries.

An Ahmedabad-based private construction company, Chevrox Constructions had approached the NCLT to initiate the Corporate Insolvency Resolution Process (CIRP) against Bridge and Roof for alleged default in payment of Rs.4,47,90,393.

In its petition, Chevrox highlighted that it entered 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.

Bridge and Roof provided schedule rates, based on which Chevrox was to procure material for work execution. However, even after the completion of jobs, Bridge and Roof failed to make the requisite payment to Chevrox.

Chevrox stated that in September 2022, it sent a demand notice to Bridge and Roof under Section 8 of the Insolvency and Bankruptcy Code (IBC), 2016. But not eliciting any response, it approached the tribunal.

Bridge and Roof opposed Chevrox’s argument stating non-completion of the job. It added that Chevrox did not submit a final bill for payment within three months of the work’s physical completion.

The tribunal observed that Bridge and Roof accepted dues up to June 2020 and the bills for the later period were under deliberation.

Thus, it ruled, "There is an acceptance of debt, and the payment for the same has not been made. No objection has been raised despite several correspondences made by the Operational Creditor.”

The bench reasoned that even though Bridge and Roof was a government-owned company, it fell under the purview of the IBC.

The order of the NCLT chronicled, "It is clear that Bridge and Roof is a government company because 99.35 percent shares of the company are held by the Government of India. The IBC makes no distinction between a government company or a private or public company for insolvency resolution. Hence, Bridge and Roof shall fall under the purview of the IBC.”

Advocates Rohit Mukherji and Labanyasree Sinha appeared for Chevrox.

Bridge and Roof was represented by advocates Neelina Chatterjee and Suvodeep Chakraborty.