The National Company Law Tribunal (NCLT) , New Delhi, has dismissed a major insolvency petition filed by Redpro Construction Pvt. Ltd. against Skyline Infratech Pvt. Ltd. , ruling that the applicant failed to prove the existence of an independent, crystallised operational debt . The tribunal’s decision, delivered on October 1, 2026 , by a Bench comprising Judicial Member Shri Manni Sankariah Shanmuga Sundaram and Technical Member Ms. Reena Sinha Puri, concludes a protracted legal battle over an alleged outstanding sum of ₹1,40,96,295. The court determined that the relationship between the two construction firms was a coordinated commercial arrangement rather than a clear service-provider and debtor relationship, rendering the Section 9 application under the Insolvency and Bankruptcy Code (IBC) non-maintainable .

Evidence of Joint Commercial Venture Obstructs Recovery Claims

The legal dispute centered on three work orders issued on August 25, 2017 , for the execution of civil, electrical, and plumbing works at the Kensington Boulevard Project in Noida, developed by Jaiprakash Associates Limited (JAL) . While Redpro argued that it had independently executed these works and maintained a running account against Skyline Infratech, the NCLT scrutinized the specific terms governing these work orders. Crucially, the documents included a handwritten stipulation proposing the transfer of works to a new entity to be co-owned by the directors of both firms.

The NCLT observed that this provision, when viewed alongside the back-to-back nature of the work orders, indicated that both companies were jointly participating in a project-sharing venture. The Tribunal noted, “The material on record, at best, indicates a common commercial arrangement between the parties for execution of the works awarded by JAL; it does not establish a crystallised and enforceable payment obligation owed by the Respondent to the Applicant.” Consequently, the court found that the essential criteria for establishing an “ operational debt ” as defined under Section 5(21) of the IBC were absent, as there was no clear obligation for the respondent to pay the applicant independently of the project's success or the JAL billing process.

Inconsistencies in Billing and Contractual Documentation Surface

During the proceedings, the tribunal highlighted significant gaps in the documentary evidence provided by Redpro. Although the invoices were purportedly raised for works conducted under the JAL contract, Redpro failed to produce the foundational agreements (dated September 29, 2017 , and November 11, 2017 ) to which these invoices explicitly referred. Instead, the company relied on work orders from August 2017, creating a fundamental disconnect between the alleged debt and the underlying contracts.

The billing mechanism itself became a point of contention. The original agreements mandated that Redpro submit its bills to JAL on behalf of Skyline Infratech. However, Redpro had pivoted to raising invoices directly against Skyline Infratech, a departure from the established arrangement that the applicant failed to justify. Furthermore, the tribunal uncovered substantial discrepancies between Redpro’s internal ledger records and the claim schedule presented in the petition. Amounts recorded for specific Running Account (RA) bills in the ledgers did not match the amounts cited in the final claim, leading the Bench to conclude that the computation of the alleged debt was neither consistent nor reliable.

Pre-existing Disputes Validated Under Established IBC Framework

The NCLT’s investigation into contemporaneous correspondence between the parties and JAL further undermined the petitioner's case. Emails exchanged between 2018 and 2019 revealed that personnel from both Redpro and Skyline Infratech were involved in a collective effort to manage project delays, quality control issues, and disputes over bill certification by the developer, JAL. The tribunal cited these communications as evidence of a pre-existing dispute regarding performance and payment.

“In the absence of such a contractual nexus, the invoices, by themselves, cannot establish a debt due and payable by the Respondent,” the Bench stated, emphasizing that the financial disagreements between the parties were rooted in active project disputes rather than an admitted debt. The tribunal relied on the landmark precedent set in Mobilox Innovations Pvt. Ltd. , determining that the defense raised by Skyline Infratech was not a “ moonshine ” or illusory argument but rather a substantive contention that required thorough verification through alternate legal avenues.

The judgment also touched upon the procedural history of the case, acknowledging that an earlier dismissal of the petition—based on the Section 10A moratorium —had been challenged and subsequently restored by the National Company Law Appellate Tribunal (NCLAT) . However, upon detailed review post-restoration, the NCLT found that even when disregarding the excluded period, the fundamental lack of a clear, admitted liability remained.

With the current dismissal of Company Petition (IB) No. 309 of 2022, the NCLT has effectively barred the initiation of the Corporate Insolvency Resolution Process (CIRP) . The ruling underscores the critical importance of maintaining accurate documentation and clear contractual demarcations in sub-contracting arrangements, particularly when seeking the severe remedy of insolvency. For now, the parties are left to resolve their financial disagreements regarding the Kensington Boulevard project through civil litigation or other dispute resolution mechanisms, as the insolvency court has declared that the foundational requirements for an operational creditor status remain unproven.