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Informist, Friday, Jun. 12, 2026

 

NEW DELHI – The Allahabad bench of the National Company Law Tribunal has refused to admit Noida Metro Rail Corp. Ltd. into insolvency due to a pre-existing dispute with its operational creditor Empire Transport Services Ltd. "...we are satisfied that the material placed on record sufficiently demonstrates the existence of a genuine and substantial pre-existing dispute between the parties concerning the quality of services rendered by the operational creditor, the deductions and penalties imposed thereon and the consequent amounts payable under the bus operators agreement," said the tribunal.

 

The tribunal noted an apex court verdict that held when dealing with an insolvency petition, the adjudicating authority is not required to examine the merits of the dispute in detail or determine the likelihood of success of the defence, but only to ascertain whether there exists a plausible contention requiring further investigation and that the dispute raised is not a patently feeble legal argument or unsupported assertion. "...in view of the existence of a real and bona fide pre-existing dispute within the meaning of Section 5(6) of the Insolvency and Bankruptcy Code, 2016 and as has been settled by various judgments of the courts discussed in paras above, the present application filed under Section 9 of the Code does not merit admission and is, therefore, dismissed," said the tribunal.

 

The case has its genesis from Empire Transport Services being selected as an operator for undertaking procurement, operation, and maintenance of bus services on city bus routes or other routes as directed by Noida Metro. Empire Transport Services was required to undertake the commercial operation, maintenance and day-to-day running of 100 low-floor air conditioned compressed natural gas buses on city bus routes in Noida, Greater Noida and the Noida–Greater Noida metro connectivity routes.  

 

Empire Transport Services said that Noida Metro did not pay its dues of INR 3.57 billion. Consequently, Empire Transport moved the tribunal to start insolvency proceedings against Noida Metro. Contesting the insolvency petition, Noida Metro said that under the bus operators agreement, Empire Transport had failed to render services in accordance with the prescribed specifications and had continuously breached various clauses of the agreement. Empire Transport had earlier filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 before a commercial court seeking directions for the release of various amounts allegedly due and payable. Empire Transport had already approached multiple forums seeking recovery of the alleged dues and has failed to disclose the same before the tribunal, said Noida Metro. It is quite evident that Empire Transport has initiated parallel proceedings for realisation of the alleged debt, and the dispute is pre-existing, said Noida Metro.

 

Noida Metro is a joint venture company of the Centre and government of Uttar Pradesh established for the purpose of planning, building and establishing mass transit and other urban transport and people mover systems of all types and disciplines. Noida Metro has opened its corridor covering the distance between Noida and Greater Noida and operational since 26th January, 2019.  End

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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