NCLT Admits CIRP Against Vikram Solar Ltd Over Operational Debt Claim from Isitva Steels

NCLT Admits CIRP Against Vikram Solar Ltd Over Operational Debt Claim from Isitva Steels​

The National Company Law Tribunal (NCLT) has admitted an application filed by M/s Isitva Steels Private Limited against M/s Vikram Solar Limited, ordering the initiation of the Corporate Insolvency Resolution Process (CIRP). The Adjudicating Authority determined that the claim, which originated from sub-contracting works for a solar power project, qualifies as an Operational Debt and meets the minimum financial threshold required under the Insolvency and Bankruptcy Code (IBC), 2016.

The application concerns work executed by Isitva Steels Private Limited in relation to a solar power project contracted by Vikram Solar Ltd. The original agreement was signed on February 16, 2018, covering design, engineering, manufacturing, testing, supply, and commissioning.

Dispute Escalation and Financial Claims​

The dispute arose from the payment of dues owed by Vikram Solar Limited to Isitva Steels Private Limited for these services. Although work orders were issued and completed in December 2018, Vikram Solar Ltd. failed to release certain payments, including a 5% retention amount.

The Operational Creditor (OC) filed the claim based on the non-payment of dues. The financial details surrounding the debt show a progression of claims and partial settlements:


The tribunal reviewed the history of interactions between the parties. The OC had initially received a Project Performance Certificate from Vikram Solar Ltd., certifying that the works executed were satisfactory. Despite this certification and subsequent settlement negotiations in December 2019—during which the total claim amount was settled at Rs 4,60,49,000/-—the Corporate Debtor (CD) allegedly defaulted on payments.

NCLT Findings on Operational Debt and Threshold​

During the proceedings, the tribunal addressed three primary issues: whether the claim constituted an "Operational Debt," whether it met the minimum financial threshold of Rs 1 crore, and whether a pre-existing dispute operated as a statutory bar to the petition.

The Adjudicating Authority ruled that the claim constitutes an Operational Debt under Section 5(21) of the IBC because it arose from the execution of civil works and supply of goods pursuant to the original contract agreement dated February 16, 2018. Furthermore, the tribunal found that the total principal outstanding amount, which included interest entitlement based on the contractual rate of 14% per annum, amounts to Rs 5,22,25,343/-, thus meeting the minimum threshold of Rs 1 crore prescribed under Section 4 of the IBC.

The NCLT observed that while the CD contended there was a pre-existing dispute regarding two specific invoices raised post-settlement, this contention did not serve as a statutory bar. The tribunal noted that work completion was certified in October 2019 and the debt obligations were acknowledged by the CD, making the claim an operational debt based on contract performance rather than a disputed amount from the outset.

CIRP Ordered and IRP Appointed​

Based on these findings, the NCLT admitted the application filed under Section 9 of the IBC. As a consequence of this admission, the moratorium provision under Section 14(1) of the Code shall immediately apply to Vikram Solar Limited. The moratorium prohibits actions such as instituting suits against the Corporate Debtor or transferring any assets without authorization.

The tribunal appointed Ms. Tripti Agarwal as the Interim Resolution Professional (IRP) for M/s Vikram Solar Limited. In line with the process, the NCLT directed that a public announcement must be made immediately to call for the submission of claims under Section 15 of the Code. The management of affairs of the Corporate Debtor will now vest in the IRP as per the IBC provisions.

VIKRAMSOLR Stock Price Movement​

Shares of Vikram Solar Limited slipped today, shedding 4.79% and settling at ₹200.42 in the market close. The stock saw significant movement during trading hours, finishing near the day's low after trading within a range of ₹195.4 to ₹214.2.