NCLT (After Correction) 16-8-2017 - 1 PDF

IBC
CASE LAW
COMPENDIUM
(with case briefs)
INSOLVENCY PROFESSIONALS AGENCY

MAY 2017
Price : Rs. 800/- (Excluding Postage)

ISBN : 9789382207948
© INSOLVENCY PROFESSIONALS AGENCY

All rights reserved. No part of this Publication may be translated or copied
in any form or by any means without the prior written permission of
The ICSI Insolvency Professionals Agency.
Disclaimer
Although due care and diligence have been taken in the publication of
this book, the ICSI Insolvency Professionals Agency shall not be
responsible for and loss or damage, resulting from any action taken
on the basis of the contents of this book. Any one wishing to act on the
basis of the material contained herein should do so after cross checking
with the original source.
Published by :
INSOLVENCY PROFESSIONALS AGENCY

1st Floor, ICSI House, 22, Institutional Area, Lodi Road
New Delhi 110 003
Phones : 011-4534 1099/43 Email : info@icsiipa.com
Website : www.icsiipa.com
Printed at Chandu Press/500/May, 2017

(ii)
v:.k tsVyh Arun Jaitley
foÙk] dkiksZjsV dk;Z Minister of Finance, Corporate Affairs
,oa j{kk ea=kh and Defence
India
Hkkjr
FOREWORD
The Indian economy witnessed an era of economic liberalization in 1990s.

Reforms in 2000s created market space for growth of businesses. Nevertheless,
business failures are sometimes inevitable and therefore, freedom of reconstruction
and freedom of exit also should be made smoother. When the resolution of
business is not feasible, the exit process should be made with least disruption
and cost. The Insolvency and Bankruptcy Code (IBC) 2016 (‘the Code’) provides
an exit route to address genuine business failures.
The institutional mechanism, adjudication process and time bound

mechanism in the Code enables the process of business resolution or exit smoother.
Today, the National Company Law Tribunal is adjudicating insolvency cases,
bringing hundreds of judgements, resulting in admission or rejection of insolvency
applications. The pronouncements provide learning to the practitioners on various
aspects of the Code including the grounds of admission or rejection of cases
along with interpretation of various sections and clauses of the Code.
Since the Code is a new piece of legislation, therefore, the IBC-

Compendium of Cases (with Case Briefs) by ICSI Insolvency Professionals
Agency (ICSI IPA) acts as a handy book for Insolvency practitioners,
professionals, bankers, regulators and other stakeholders in understanding the
adjudication matters and interpretation of the IBC.
I compliment the Institute of Company Secretaries of India (ICSI) IPA for

bringing-out this publication at a most opportunate time.
Arun Jaitley
Office : 134, North Block, New Delhi-110001, Tel. : 23092810, 23092510 Fax 23092828
Residence : 2, Krishna Menon Marg, New Delhi-110011, Tel.: 23794990, 23794556 Fax : 23794543
(iii)
(iv)
7 th Floor, Mayur Bhawan, Connaught Place
New Delhi-110001 Tel: +91 11 23462801
Dr. M. S. Sahoo E-mail: chairperson@ibbi.gov.in Web:www.ibbi.gov.in
Chairperson 15th May, 2017
FOREWORD
There are three main sources of law, namely, customary law, statutory law
and case law. Case law provides certainty in the sense that a case with
sufficiently similar material facts yields a similar outcome. It also provides
consistency and fairness as similar cases are dealt in the same way. It
assumes additional significance in the initial days of a statutory law such
as the Insolvency and Bankruptcy Code, 2016 (Code), when different
plausible views emerge on an issue and the right view needs to be
established.
The provisions relating to corporate insolvency resolution process (CIRP)
under the Code came into force on 1st December, 2016. The Adjudicating
Authority (AA) and the Appellate Authority have since dealt quite a few
applications for resolution and appeals respectively and have settled a
number of issues. While this compendium carries a gist of settled issues
and the rationale for the same, I am tempted to draw attention of the readers
to two case laws which will have substantial bearing on the implementation
of the Code.
The first emanates from the order of the AA in the matter of DF Duetsche
Forfait AG and Anr. Vs. M/s. Uttam Galva Steel Ltd. This reiterates that the
Code is the mandate of the nation and proceedings under the Code are not
necessarily adversarial. The AA observed: “.. we cannot hang on to the
conventional approach which has become inherent in us that a legal
proceeding shall be adversarial only, we are governed by a democratic
system, henceforth we have to go by the mandate given by legislature.” It
further observed: ”If we start looking at this as draconian law gobbling up
the companies and branding orders under this law as harsh, then we
remain where we are, perhaps will go down further, yes, one can
understand to get conversed to new law and to see fruits of it, it will take
time, but just for the sake of this reason, we cannot wish away the mandate
of this nation come through parliament”.
(v)
The second emanates from the order of the Appellate Authority in the matter
of JK Jute Mills Company Limited Vs. M/s. Surendra Trading Company. This
reiterates that time is the essence of the Code and all stakeholders, including
the AA, are required to discharge their responsibilities within the prescribed
time except in exceptional circumstances. The Code broadly prescribes
four timelines in respect of CIRP: (a) 14 days for the AA to admit or reject an
application for initiation of CIRP; (b) 7 days for an applicant to rectify defects
in the application for CIRP; (c) 30 days for the Interim Resolution Professional
to discharge his duties; and (d) 180 days for creditors to complete a CIRP. The
Appellate Authority held that timelines at (a) and (c) are directory, while
those at (b) and (d) are mandatory.
As stated in its preamble, the Code provides for re-organisation and
insolvency resolution of corporate persons, partnership firms and individuals
in a time bound manner for maximisation of value of assets. It envisages
specific roles for each participant - the stakeholders comprising debtors
and creditors, and the ecosystem comprising AA, Insolvency and
Bankruptcy Board of India, information utilities, and insolvency professionals
- in different processes and specifies timelines for performance of each
task in a process. The participants need to fulfill the mandate of the nation
given under the Code and they need to do so in a time bound manner.
The USP of the Code is time bound completion of processes. A process
such as CIRP can be completed only if each task in the process is completed
in time. Completion of each task requires co-operation of stakeholders and
participants. For example, it is difficult for the AA to admit or reject an
application for CIRP within 14 days if the applicant and other stakeholders
do not co-operate. Similarly, the creditors and other stakeholders can not
complete CIRP within 180 days if the insolvency professional does not co-
operate. Therefore, it is the collective responsibility of the stakeholders and
the ecosystem to complete each task and each process under the Code
within prescribed time. If they fail to preserve the USP of the Code, the Code
and the process there under may have the same fate as many others
which did not deliver in time. The ecosystem needs to ensure that the
processes under the Code are competitive in terms of time, cost and
efficiency in comparison to other options available to stakeholders.
In this background, I find ‘IBC: Case Law Compendium’ a handy reference
for practitioners and stakeholders alike, in addition to academics and
researchers and I compliment the ICSI Insolvency Professional Agency for
this timely initiative.
DR. M. S. SAHOO
(vi)
PREFACE
The Insolvency and Bankruptcy Code is built with strong institutional

adjudication mechanism, time bound resolution process, quick and
scientific credit information base, resulting in accelerated phase of filing of
cases for Corporate Insolvency Resolution Process with National Company
Law Tribunal over the period of five months of implementation of Law.
Further the Central Government has authroised the Reserve Bank of India
to direct banking companies to initiate action under the Code with respect
to their stressed assets. This will result in substantial increase in number of
cases being filed before different benches of NCLT in the near future. Effective
implementation of the Code will lead to effective time bound business
resolution or easy exit.
The Tribunal has witnessed different types of cases being filed resulting in
admission or rejection of cases. While admitting/rejecting the cases, the
Tribunal have analysed and interpreted the provisions of law such as
existence of dispute with respect to default, time limit for admission of
order, nature of financial creditor, operational creditor, financial debt,
operational debt, etc.
“IBC-Case Law Compendium (with Case Briefs)” is a compendium of orders

pronounced by different benches of the National Company Law Tribunal
and by the National Company Law Appellate Tribunal till April 30, 2017 with
a brief analysis of the cases. The book is the first such publication and
would be a handy reference to students, all insolvency and other
professionals, corporates, debtors, creditors, regulators, Tribunals, Courts,
and other stakeholders in understanding and analysing the new law.
I commend the dedicated efforts of the team ICSI Insolvency

Professionals Agency led by Ms Lakshmi Arun, Head (Education &
Training) (Designate) and involvement of Mr. Amarjeet Singh, Senior
Consultant in bringing out this publication under the supervision and
guidance of Ms Alka Kapoor, Chief Executive Officer (Designate), ICSI
Insolvency Professionals Agency.
(vii)
I thank Mr. N K Jain, Former Secretary & CEO and past Council Member, ICSI
and Mr. Sanjay Grover, Practising Company Secretary, Past Council Member
and Registered Insolvency Professional for thoroughly reviewing the case
briefs and for their value added inputs.
I am sure that this book will be useful in easy reference of cases and in
understanding the cases through case briefs.
CS (DR.) SHYAM AGRAWAL

PRESIDENT, ICSI 12th May, 2016
(viii)
ABOUT THE BOOK
The Insolvency and Bankruptcy Code, 2016 (“Code”) provides for a

specialised forum to oversee insolvency and liquidation proceedings for
corporates, firms and individuals. As the Code takes shape, there are various
issues with regard to implementation of the Code which have cropped up
before the National Company Law Tribunal (“NCLT”) and the National
Company Law Appellate Tribunal (“NCLAT”).
This publication makes a sincere attempt at educating its readers in
understanding the Code through the development of case laws. During its
short span, both, the NCLT and NCLAT, have been confronted with complex
issues like the existence of ‘dispute’ – whether requires a pre-existing suit/
arbitral proceedings or mere denial is sufficient; whether the period of
limitation under the Limitation Act is applicable for filing an application
under the Code; whether the time limit for admitting/rejecting an application
prescribed under the Code is mandatory or discretionary and if mandatory,
when does the period of fourteen days start. All these and many other
intricate issues can only be decided by an authoritative pronouncement by
court of law.
This publication of ICSI Insolvency Professionals Agency titled “IBC – A

Case Law Compendium” covers orders of NCLT and NCLAT admitting the
cases (bench-wise) along with case briefs, orders of NCLT and NCLAT
rejecting the cases with reasons thereof, table of consolidated cases filed
etc. This is in continuation of our efforts to provide the insolvency
professionals and our members with the latest developments and case
law to enable them to be current and up dated on the subject. We will
appreciate the valuable suggestions of the readers of this publication for
improving the contents, quality and readability of the future additions of the
publication.
CS ALKA KAPOOR
Chief Executive Officer
(Designate)
ICSI Insolvency Professionals Agency
(ix)
(x)
CONTENTS
Sl. Particulars Page

No. No.
I. TABLE OF ORDERS ACCEPTED OR REJECTED BY VARIOUS
BENCHES OF NATIONAL COMPANY LAW TRIBUNAL (NCLT)
a. Consolidated table on number of Orders (upto 30th April, xvi
2017)
b. Table of orders passed by :
• Principal Bench xvii-xx
• Ahmedabad Bench xxi-xxii
• Allahabad Bench xviii
• Bengaluru Bench xxiv
• Chandigarh Bench xxv-xxvi
• Chennai Bench xxvii
• Guwahati Bench xxviii
• Hyderabad Bench xxix
• Kolkata Bench xxx-xxxi
• Mumbai Bench xxxii-xxxvii
• New Delhi Bench xxxvii-xxxix
II. ADMITTED ORDERS PASSED BY NATIONAL COMPANY LAW
TRIBUNAL (NCLT) ALONG WITH CASE BRIEFS
a. Principal Bench 1-60
M/s. Hotel Gaudavan Private Limited (HGPL) 3-13
International Recreation and Amusement Limited 14-19
M/s. Era Infra Engineering Limited 20-28
(xi)
M/s. Clutch Auto Limited 29-35
M/s. Raipur Power & Steel Limited 36-44
Rave Scans Private Limited 45-59
b. Ahmedabad Bench 61-96
Steel Konnect (India) Private Limited 63-70
M/s. Gujarat Oleo Chem Limited 71-77
M/s. Stratus Foods Private Limited 78-87
Pooja Tex-Prints Private Limited 88-96
c. Allahabad Bench 97-122
M/s. Raman Ispat Private Limited 99-105
M/s. JEKPL Private Limited 106-114
M/s. JODPL Private Limited 115-122
d. Bengaluru Bench 123-138
24*7 Learning Private Limited 125-128
Falcon Tyres Limited 129-133
Jackonblock Facility Services Private Limited 134-138
e. Chandigarh Bench 139-250
James Hotel Limited 141-156
SRS Modern Sales Limited 157-171
M/s. Skyblue Papers Private Limited 172-183
M/s. Super Multicolor Printers Private Limited 184-197
M/s. Meyer Apparel Limited 198-214
Recorders and Medicare Systems Private Limited 215-227
M/s. Hind Motors Mohali Private Limited 228-238
Hind Motors Limited 239-250
f. Chennai Bench 251-260
Vasan Health Care Private Limited 253-260
g. Hyderabad Bench 261-304
M/s. Kadevi Industries Limited 263-269
M/s. Blossoms Oils & Fats Limited 270-277
(xii)
VNR Infra Metals Private Limited 278-282
M/s. Kamineni Steel & Power India Private Limited 283-292
M/s. VNR Infrastructures Limited 293-298
Synergies-Doorey Automotive Limited 299-304
i. Kolkata Bench-I 305-312
Keshav Sponge & Energy Private Limited 307-312
Kolkata Bench-II 313-362
M/s. Prowess International (P) Limited 315-319
M/s. R.G. Shaw & Sons Private Limited 320-326
M/s. Gujarat NRE Coke Limited 327-331
M/s. Precision Engineers & Fabricators Private Limited 332-338
MBL Infrastructures Limited 339-346
M/s. REI Agro Limited 347-352
Sree Metaliks Limited 353-356
Nicco Corporation Limited 357-362
j. Mumbai Bench 363-540
HDO Technologies Limited 365-369
Loha Ispat Limited 370-374
Neelkanth Township and Construction Private Limited 375-384
Hindustan Dorr-Oliver Limited 385-389
Swift Shipping and Freight Logistics Private Limited 390-393
Magna Opus Hospitality Private Limited 394-400
M/s. Sharon Bio-Medicine Limited 401-408
M/s. Uttam Galva Steel Limited 409-437
M/s. Wind-Ways Packaging Private Limited 438-440
M/s. Murli Industries Limited 441-445
M/s. Gupta Corporation Private Limited 446-450
Swiber Offshore (India) Private Limited 451-456
(xiii)
Gupta Energy Private Limited 457-461
Marmagoa Steel Limited 462-466
Janata Chemicals Private Limited 467-471
Gupta Coal India Private Limited 472-476
Facor Steel Limited 477-482
M/s. MCL Global Steel Private Limited 483-489
Ultra Drytech Engineering Limited 490-494
Shree Rajeshwar Weaving Mills Private Limited 495-498
Chhaparia Industries Limited 499-503
M/s. Unimark Remedies Limited 504-508
Starlog Enterprises Limited 509-514
Midas Touch Export Private Limited 515-520
M/s. Bhupen Electronic Limited 521-526
U.B. Engineering Limited 527-532
M/s. Innoventive Industries Limited 533-540
k. New Delhi Bench 541-563
M/s. Shree Radha Raman 543-548
M/s. Kaliber Associates Private Limited 549-553
M/s. Helpline Hospitality Private Limited 554-558
Ekdantam Infra Private Limited 559-563
III. TABLE OF REJECTED ORDERS ALONG WITH REASONS 565-588
FOR REJECTION BY NATIONAL COMPANY LAW TRIBUNAL
(bench-wise)
IV. REJECTED ORDERS PASSED BY NATIONAL COMPANY 589-848
LAW TRIBUNAL (NCLT)
a. Principal Bench 589-686
b. Ahmedabad Bench 687-693
c. Allahabad Bench 694-700
d. Bengaluru Bench 701-704
(xiv)
e. Chandigarh Bench 705-714
f. Chennai Bench 715-718
g. Guwahati Bench 719-735
h. Hyderabad Bench 736-766
i. Kolkata Bench 767-773
j. Mumbai Bench 774-832
k. New Delhi Bench 833-848
V. ORDERS PASSED BY NATIONAL COMPANY LAW APPELLATE 849-875
TRIBUNAL (NCLAT)
a. Era Infra Engineering Limited v/s. Prideco Commercial 851-855
Projects Private Limited
b. JK Jute Mills Company Limited v/s. M/s Surendra Trading 856-871
Company
c. Astra Offshore SDN BHD v/s. Swiber Offshore (India) 872-873
Pvt Ltd.
d. Hind Motors India Limited v/s. Adjudicating Authority 874
NCLT, Chandigarh
e. Sree Metaliks Limited v/s. M/s Srei Equipment Finance 875
Limited
(xv)
CONSOLIDATED TABLE - NUMBER OF ORDERS (UPTO 30TH APRIL, 2017)
Sl. No. Name of the Bench No. of orders issued No. of orders admitted No. of orders rejected
1 Principal Bench 31 6 25
2 New Delhi Bench 9 4 5
3 Ahmedabad Bench 8 4 4
4 Allahabad Bench 4 3 1
5 Bengaluru Bench 4 3 1
6 Chandigarh Bench 10 8 2
(xvi)
7 Chennai Bench 3 1 2
8 Guwahati Bench 1 0 1
9 Hyderabad Bench 9 6 3
10 Kolkata Bench 12 9 3
11 Mumbai Bench 48 27 21
Total 139 71 68
ORDERS PASSED BY IN PRINCIPAL BENCH (upto 30th April, 2017)
Sl. Name of the Corporate Name of the applicant Date of Order Status Application, Order, if any,
No. Debtor (F.C./O.C./C.D.) if any, pending passed by NCLAT
before NCLAT
1 International Recreation S.R. Constructions 28.04.2017 Admitted No No
and Amusement Ltd. (Operational Creditor)
2 Gold Plus Glass Industry Eviro International 28.04.2017 Rejected No No
Ltd. Corporation (Operational
Creditor)
3 Ozone Builders & Mr. Satish Mittal 27.04.2017 Rejected No No
Developers Pvt. Ltd. (Operational Creditor)
4 M/s. Era Infra Engineering M/s. Prideco Commercial 12.04.2017 Admitted Yes Order dated 03.05.2017
(xvii)
Limited Projects Pvt. Limited
(Operational Creditor)
5 M/s. Getit Infoservices M/s. Nowfloats 11.04.2017 Rejected No No
Pvt. Ltd. Technologies Pvt. Ltd.
6 AMR Infrastructure Ltd. M/s. Creative Solutions 10.04.2017 Rejected No No
7 M/s. Clutch Auto Limited M/s Incredible Unique 10.04.2017 Rejected No No
Buildcon Pvt. Limited
8 M/s. Clutch Auto Limited M/s. Clutch Auto 10.04.2017 Admitted No No
Limited (Corporate Debtor)
9 AMR Infrastructures Ltd. Mukesh Kumar & anr. 31.03.2017 Rejected No No
10 J.B.K. Developers Pvt. Ltd. Pawan Dubey & anr. 31.03.2017 Rejected No No
11 M/s. Hotel Gaudavan M/s. Alchemist Asset 31.03.2017 Admitted No No
Pvt. Ltd.(HGPL) Reconstruction (Financial
Creditor)
12 M/s. R.L. Steel & Energy Ltd. M/s. Deem Roll-Tech 31.03.2017 Rejected No No
Limited(Operational
Creditor)
13 DSC Ltd. Sh. Rajesh Saini 29.03.2017 Rejected No No
(xviii)
14 Soril Infra Resources Ltd. Annapurna Infrastructure 24.03.2017 Rejected No No
Pvt. Ltd. & Ors.(Financial
Creditor)
15 Amrapali Infrastructure Mr. Ishwar Khandelwal 22.03.2017 Rejected No No
Private Limited (Operational Creditor)
16 Alice Developers Pvt. Ltd. Gurcharan Singh Soni & 21.03.2017 Rejected No No
Kuldeep Kaur Soni
17 Unitech Ltd & Alice Gurcharan Singh Soni & 21.03.2017 Rejected No No
Developers Pvt. Ltd. Kuldeep Kaur Soni
18 Mothers Pride Dairy Potrait Advertising & 20.03.2017 Rejected No No
India Pvt. Ltd. Marketing Pvt. Ltd.
19 M/s. Punj Lloyd Ltd. Fichtner Consulting 16.03.2017 Rejected No No
Engineers (India) Pvt.
Ltd. (Operational Creditor)
20 Action Ispat & Power M/s. Prowess International 15.03.2017 Rejected No No
Pvt. Ltd. Pvt. Ltd. (Operational
Creditor)
21 Earth Iconoic Anil Mahindroo & anr. 08.03.2017 Rejected No No
Infrastructure Pvt. Ltd (Financial Creditor)
22 M/s. Kings Airways Limited M/s. Jeevan Credit & 08.03.2017 Rejected No No
(xix)
Leasing Pvt. Ltd.
(Financial Creditor)
23 BRYS International Pvt. Ltd. Chharia Holdings Ltd. 06.03.2017 Rejected No No
24 Goodwill Hospital and Philips India Ltd. 02.03.2017 Rejected No No
Research Centre Ltd. (Operational Creditor)
25 M/s. Ambience Pvt. Ltd. M/s. One Coat Plaster 01.03.2017 Rejected No No
26 BK Educational Services Parag Gupta 28.02.2017 Rejected No No
Pvt. Ltd. (Financial Creditor)
27 M/s. Raipur Power & Tomorrow Sales Agency 23.02.2017 Admitted No No
Steel Limited Pvt. Ltd
28 AMR Infrastructures Ltd. Col. Vinod Awasthy 20.02.2017 Rejected No No
29 M/s. Ultra Home Mr. Jawahir Lal Dhar 03.02.2017 Rejected No No
Construction Pvt. Ltd. & anr.(Financial Creditor)
30 Rave Scans Pvt. Ltd. Rave Scans Pvt. Ltd. 25.01.2017 Admitted No No
(Corporate Debtor)
31 M/s. AMR Infrastructures Nikhil Mehta & Sons 23.01.2017 Rejected No No
Ltd. (HUF) & ors
(xx)
ORDERS PASSED BY AHMEDABAD BENCH (upto 30th April, 2017)
before NCLAT
1 Entire Ceramics Ltd. ACME Specialists 21.04.2017 Rejected No No
2 Shirani Automotive Shree Raj Rajeshwari 20.04.2017 Rejected No No
Pvt. Ltd. Car Care (Operational
Creditor)
3 Sagar Automobiles Master Engineering 20.04.2017 Rejected No No
Pvt. Ltd. Works (Operational
(xxi)
Creditor)
4 Steel Konnect (India) M/s Hero FinCorp 19.04.2017 Admitted No No
Pvt. Ltd. Limited (Financial
Creditor)
5 Alok Industries Ltd. Arun Structurals And 17.04.2017 Rejected No No
Engineers Private
Limited (Operational
Creditor)
6 M/s. Gujarat Oleo M/s. Gujarat Oleo 13.04.2017 Admitted No No
Chem Ltd Chem Ltd (Corporate
Debtor)
7 M/S Stratus Foods M/s Umiya Trading 10.04.2017 Admitted No No
8 Pooja Tex-Prints Pvt. Ltd. Gaurinandan Fashion 29.03.2017 Admitted No No
Pvt. Ltd. (Operational
Creditor)
(xxii)
ORDERS PASSED BY IN ALLAHABAD BENCH (upto 30th April, 2017)
before NCLAT
1 J.K. Jute Mills Mazdoor Name not specified 28.04.2017 Rejected No No
Morcha (Operational Creditor)
2 M/s Raman Ispat Pvt. Ltd. M/s Raman Ispat Pvt. Ltd. 11.04.2017 Admitted No No
(Corporate Debtor)
3 M/S JEKPL Private Limited M/s JEKPL Private Limited 17.03.2017 Admitted No No
(Corporate Debtor)
4 M/s. JODPL Private Limited M/s. JODPL Private Ltd. 17.03.2017 Admitted No No
(Corporate Debtor)
(xxiii)
5 Surendra Trading JK Jute Mills Company 09.03.2017 Yes Order passed on
Company Limited 01.05.2017
ORDERS PASSED BY BENGALURU BENCH (upto 30th April, 2017)
before NCLAT
1 24*7 Learning Private 24*7 Learning Private 28.04.2017 Admitted No No
Limited Limited (Corporate
Debtor)
2 Falcon Tyres Limited Belthangady Taluk 28.04.2017 Admitted No No
Rubber Grower’s
Marketing &
Processing Cooperative
(xxiv)
3 Avni Energy Solutions M/s Fortune Plastech 17.04.2017 Rejected No No
4 Jackonblock Facility M/s Subodha 17.04.2017 Admitted No No
Services Private Limited Entertainments Co.
ORDERS PASSED BY CHANDIGARH BENCH (upto 30th April, 2017)
before NCLAT
1 James Hotels Ltd. Punjab National Bank 27.04.2017 Admitted No No
2 Panacea Biotech Ltd. M/s Wanbury Ltd. 18.04.2017 Rejected No No
3 Nexgen Laminators Pvt. Ltd. SIDBI 17.04.2017 Rejected No No
4 SRS Modern Sales Ltd. SRS Modern Sales Ltd. 17.04.2017 Admitted No No
(Corporate Debtor)
(xxv)
5 M/s Skyblue Papers Pvt. Ltd. M/s Skyblue Papers 07.04.2017 Admitted No No
Pvt. Ltd. (Corporate
Debtor)
6 M/s Super Multicolor M/s Super Multicolor 07.04.2017 Admitted No No
Printers Pvt. Ltd. Printers Pvt. Ltd.
(Corporate Debtor)
7 M/s Meyer Apparel Ltd. M/s Surbhi Body Products 07.04.2017 Admitted No No
(P) Ltd. & M/s Godolo
and Godolo Exports (P)
Ltd.(Operational Creditor)
8 Recorders and Medicare Recorders and Medicare 16.03.2017 Admitted No No
Systems Pvt. Ltd. Systems Pvt. Ltd.
(Corporate Debtor)
9 Hind Motors India Ltd. Adjudicating Authority, 09.03.2017 Yes Order passed on
NCLT Chandigarh 10.04.2017
10 M/s Hind Motors Mohali M/s Hind Motors Mohali 20.02.2017 Admitted No No
Pvt. Ltd. Pvt. Ltd. (Financial
Creditor)
11 Hind Motors Ltd. Hind Motors Ltd. 14.02.2017 Admitted No No
(Corporate Debtor)
(xxvi)
ORDERS PASSED BY CHENNAI BENCH (upto 30th April, 2017)
before NCLAT
1 Eta Engineering Private KEI Industries Limited 26.04.2017 Rejected No No
Limited
2 Real Value Promoters Capegemini Technology 21.04.2017 Rejected No No
Private Limited Services India Ltd.
3 Vasan Health Care Alcon Laboratories (India) 21.04.2017 Admitted No No
Private Limited Pvt. Ltd (Operational
Creditor)
(xxvii)
ORDERS PASSED BY GUWAHATI SPECIAL BENCH (upto 30th April, 2017)
before NCLAT
1 Palogix Infrastructure ICICI Bank 30.03.2017 Rejected No No

(xxviii)
ORDERS PASSED BY HYDERABAD BENCH (upto 30th April, 2017)
Sl. Name of the Corporate Name of the applicant Date of Order Status Application, if any, Order, if any,
No. Debtor (F.C./O.C./C.D.) pending before NCLAT passed by NCLAT
1 M/s. Blossoms Oils & Fats M/s. Blossoms Oils & 22.03.2017 Admitted No No
Limited Fats Limited (Corporate
Debtor)
2 M/s. Kadevi Industries M/s. Kadevi Industries 15.03.2017 Admitted No No
Limited Limited(Corporate Debtor)
3 M/s. Geometrix Laser Dr. B.V.S. Lakshmi 13.03.2017 Rejected No No
Solutions Private Limited (Financial Creditor)
4 VNR Infra Metals Private VNR Infra Metals Private 03.03.2017 Admitted No No
Limited Limited (Corporate
Debtor)
(xxix)
5 M/s. Lanco Infratech Ltd. K.K.V. Naga Prasad 21.02.2017 Rejected No No
6 Kamineni Steel and Power Indian Bank (Financial 20.02.2017 Rejected No No
India Private Limited Creditor)
7 M/s. Kamineni Steel & M/s. Kamineni Steel & 10.02.2017 Admitted No No
Power India Private Ltd. Power India Private
Limited(Corporate Debtor)
8 M/s VNR Infrastructures VNR Infrastructure Limited 10.02.2017 Admitted No No
Limited (Corporate Debtor)
9 Synergies-Doorey Synergies-Doorey 23.01.2017 Admitted No No
Automotive Limited Automotive Limited
(Corporate Debtor)
ORDERS PASSED BY KOLKATA BENCH-I (upto 30th April, 2017)
before NCLAT
1 Keshav Sponge & Keshav Sponge & Energy 16.02.2017 Admitted No No

Energy Pvt. Ltd. Pvt. Ltd.(Corporate
Debtor)
ORDERS PASSED BY KOLKATA BENCH-II (upto 30th April, 2017)

before NCLAT
(xxx)
1 M/s. Prowess International M/s. Parker Hannifin 20.04.2017 Admitted No No
Private Ltd. India Ltd.
2 Mayapur Vastu Vinod Kothari Consultants 17.04.2017 Rejected No No
Developments Pvt. Ltd. Private Limited
3 M/s. Hada Textile M/s. Hada Textile 13.04.2017 Rejected No No
Industries Limited Industries Limited
(Corporate Debtor)
4 M/s. RG.Shaw & Sons M/s. Navplast Traders 12.04.2017 Admitted No No
P. Ltd. & Others.
5 M/s. Gujarat NRE Coke M/s. Gujarat NRE Coke 07.04.2017 Admitted No No
Limited Limited(Corporate Debtor)
6 M/s. Precision Engineers M/s. Berger Paints India 07.04.2017 Admitted No No
& Fabricators Private Limited (Operational
Limited Creditor)
7 MBL Infrastructures Ltd. RBL Bank Ltd. 30.03.2017 Admitted No No
8 M/s.REI Agro Limited Mr. Surendra Kumar 27.02.2017 Admitted No No
Joshi (Operational Creditor)
9 HPCL Hindustan Motors Limited 24.02.2017 Rejected No No
10 Sree Metaliks Limited Srei Equipments Finance 30.01.2017 Admitted Yes Order dated
Ltd.(Financial Creditor) 21.02.2017
11 Nicco Corporation Limited Nicco Corporation 18.01.2017 Admitted No No
Limited(Corporate Debtor)
(xxxi)
ORDERS PASSED BY MUMBAI (upto 30th April, 2017)
before NCLAT
1 HDO Technologies Limited Bank of India 28.04.2017 Admitted No No
2 Loha Ispat Ltd. Dilip M. Rathod 28.04.2017 Admitted No No
3 Neelkanth Township and Urban Infrastructure 21.04.2017 Admitted No No
Construction Pvt. Ltd. Trustee Ltd.(Financial
Creditor)
4 Hindustan Dorr-Oliver Bank of India 21.04.2017 Admitted No No
(xxxii)
Limited (Financial Creditor)
5 Swift Shipping and Freight Swift Shipping and 19.04.2017 Admitted No No
Logistics Pvt. Ltd. Freight Logistics Pvt. Ltd.
(Corporate Debtor)
6 M/s. Siddhitch Homes Dewan Housing Finance 18.04.2017 Rejected No No
Pvt. Ltd. & Neha Hemant Corporation Limited
Agarwal & Mr. Hemant
Mohan Agrawal
7 M/s. Magna Opus Mr. Sanjay Kumar 12.04.2017 Admitted No No
Hospitality Pvt. Ltd. Ruia(Operational
Creditor)
8 M/s Sharon Bio-Medicine Culrross Opportunities 11.04.2017 Admitted No No
Limited SP & Peter Beck and
Partners (Financial
Creditor)
9 Nirmal Lifestyle Ltd. Parco Engineers 10.04.2017 Rejected No No
(Mumbai) Pvt. Ltd.
10 M/s Uttam Galva Steel 1. M/s DF Deutsche 10.04.2017 Admitted No No
Ltd. Forfait AG
2. Misr Bank Europe GmbH
11 M/s. Wind-Ways M/s. Bharat Trading 07.04.2017 Admitted No No
Packaging Pvt. Ltd. Corporation (Operational
Creditor)
(xxxiii)
12 M/s Murli Industries M/s Edelweiss Asset 05.04.2017 Admitted No No
Limited Reconstruction Co. Ltd.
13 Raj Oil Mills Ltd. General Engineering 04.04.2017 Rejected No No
Works (Operational
Creditor)
14 Raj Oil Mills Ltd. Mukhi Tradelink 04.04.2017 Rejected No No
15 M/s Gupta corporation M/s Gupta Corporation 03.04.2017 Admitted No No
Pvt. Ltd. Pvt. Ltd.(Corporate
Debtor)
16 Swiber Offshore (India) Mr. Ajay Joseph, 31.03.2017 Admitted No No
Pvt. Ltd. Proprietor of M/s.
Global Marine Supply
Co. (Operational
Creditor)
17 M/s. Hubtown Limited Rediffusion Dentsu 23.03.2017 Rejected No No
Young & Rubicam
Pvt. Ltd. (Operational
Creditor)
18 Gupta Energy Pvt. Ltd. Gupta Energy Pvt. 21.03.2017 Admitted No No
Ltd.(Corporate
Debtor)
19 Marmagoa Steel Ltd. Marmagoa Steel Ltd. 20.03.2017 Admitted No No
(xxxiv)
(Corporate Debtor)
20 Janata Chemicals Pvt. Ltd. National Gas Agencies 15.03.2017 Admitted No No
21 Esskay Motors Pvt. Ltd. HDFC Bank Limited 14.03.2017 Rejected No No
22 Miltech Industries Pvt. Ltd. J.J. Plastalloy Pvt. Ltd. 14.03.2017 Rejected No No
23 M/s. Supreme Infrastructure Mrs. Seema Gupta 10.03.2017 Rejected No No
India Ltd. & Ors. (Operational Creditor)
24 Gupta Coal India Pvt. Ltd. Gupta Coal India Pvt. Ltd. 09.03.2017 Admitted No No
(Corporate Debtor)
25 Facor Steel Limited Facor Steel Limited 08.03.2017 Admitted No No
(Corporate Debtor)
26 M/s. MCL Global Steel M/s. Essar Projects India 06.03.2017 Admitted No No
Pvt. Ltd. Ltd.(Operational Creditor)
27 M/s. MCL Global Steel M/s. Essar Projects India 06.03.2017 Rejected No No
28 Ultra Drytech Engineering Ultra Drytech Engineering 06.03.2017 Admitted No No
Ltd. Ltd.(Corporate Debtor)
29 Shree Rajeshwar Weaving Shree Rajeshwar Weaving 02.03.2017 Admitted No No
Mills Pvt. Ltd. Mills Pvt. Ltd.(Corporate
Debtor)
30 Neelkanth Township and Urban Infrastructure 01.03.2017 Rejected No No
(xxxv)
Construction Pvt. Ltd. Trustee Ltd.(Financial
Creditor)
31 Chhaparia Industries Ltd. Chhaparia Industries Ltd. 24.02.2017 Admitted No No
(Corporate Debtor)
32 M/s. HDO Technologies Ltd. Master Voss International 24.02.2017 Rejected No No
Projects Pvt. Ltd.
33 Ruchi Soya Industries Ltd. BGA Tradelink Pvt. Ltd. 24.02.2017 Rejected No No
34 M/s Unimark Remedies Ltd. M/s Unimark Remedies 24.02.2017 Admitted No No
Ltd. (Corporate Debtor)
35 M/s. Infinity Fab Engineering Sun-Line Suppliers Pvt. 22.02.2017 Rejected No No
Company Pvt. Ltd. Ltd.(Operational Creditor)
36 M/s. Waaree Energies Ltd. Gujrat Borosil Ltd. 22.02.2017 Rejected No No
37 Starlog Enterprises Limited ICICI Bank Limited 17.02.2017 Admitted No No
38 Midas Touch Export Pvt. Ltd. Shyam Indofab Private 17.02.2017 Admitted No No
Limited (Operational
Creditor)
39 M/s. Shree Ganesh State Bank of India 09.02.2017 Rejected No No
Forgings Ltd. (Financial Creditor)
40 National Steel and Agro Smart Timing Steel Ltd. 30.01.2017 Rejected No No
(xxxvi)
Industries Ltd. (Operational Creditor)
41 M/s. Swiber Offshore (I) Arika Tour & Travels Pvt. 30.01.2017 Rejected No No
42 M/s. Swiber Offshore Astra Offshore Sdn Bhd. 30.01.2017 Rejected Yes Order dated
(I) Pvt. Ltd. (Operational Creditor) 01.05.2017
43 M/s. Mobilox Innovations M/s. Kirusa Software Pvt. 27.01.2017 Rejected No No
Pvt. Ltd. Ltd. (Operational Creditor)
44 M/s. Innoventive Industries ICICI Bank Limited 23.01.2017 Rejected No No
Limited (Financial Creditor)
45 M/s. Arham Anmol 19.01.2017 Rejected No No
Projects Pvt. Ltd.
46 M/s Bhupen Electronic Ltd. M/s VIP Finvest 19.01.2017 Admitted No No
Consultancy Pvt. Ltd.
47 U.B. Engineering Limited U.B. Engineering Limited 18.01.2017 Admitted No No
(Corporate Debtor)
48 M/s Innoventive Industries ICICI Bank 17.01.2017 Admitted No No
Ltd. (Financial Creditor)
(xxxvii)
ORDERS PASSED BY NEW DELHI BENCH-II (upto 30th April, 2017)
before NCLAT
1 M/s. Shree Radha Raman M/s. Steel India 28.04.2017 Admitted No No
Corporation
2 M/s. Kaliber Associates Mrs. Tripat Kaur 26.04.2017 Admitted No No
3 M/s. BK Educational Parag Gupta 25.04.2017 Rejected No No
Services Pvt. Ltd. (Financial Creditor)
(Transferred from Principal
(xxxviii)
Bench to New Delhi
Bench)
4 M/s Helpline Hospitality R.M. House Keeping 24.04.2017 Admitted No No
Pvt. Ltd. (Operational Creditor)
5 M/s. Pal Mohan Electronics M/s. VDS Plastics Pvt. 21.04.2017 Rejected No No
Pvt. Ltd. Ltd.(Operational
Creditor)
6 Ekdantam Infra P.Ltd. R.S Polychem 13.04.2017 Admitted No No
7 M/s. Getit Stores Pvt. Ltd. M/s. Nowfloats 13.04.2017 Rejected No No
Technologies Pvt. Ltd.
8 M/s. PTC Techno Pvt. Ltd. Speculum Plast Pvt. 11.04.2017 Rejected No No
Ltd.(Operational
Creditor)
9 M/s. Unitech Hi-Tech Raman Seth & Anr. 31.03.2017 Rejected No No
Developers Ltd. (Operational Creditors)
(xxxix)
PRINCIPAL BENCH 1
PRINCIPAL BENCH
2 IBC CASE LAW COMPENDIUM
PRINCIPAL BENCH 3
M/S HOTEL GAUDAVAN PRIVATE LIMITED

Name of the Corporate Debtor M/s. Hotel Gaudavan Pvt. Ltd.
Name of the Financial Creditor/ Alchemist Asset Reconstruction Company

Applicant Limited
Company Petition No. CP No. (IB)23/PB/2017

Bench NCLT, Principal Bench, New Delhi
Date of Order 31.03.2017
Section involved Section 7 of IBC, 2016 (Code)
Amount involved Rs. 23.50 Crores
Status of Application Admitted
Brief Facts of the Case

1. Alchemist Asset Reconstruction Company Limited (“Financial Creditor” or
“FC”) was incorporated on 19.09.2002 having its registered office at New
Delhi, whereas M/s. Hotel Gaudavan Private Limited (“Corporate Debtor”
or “CD”) was incorporated on 06.10.1986 having its registered office in
Rajasthan.
2. The CD was sanctioned a term loan on 04.01.2008 of Rs. 24 Crores and a
Cash Credit Limit of Rs. 1 Crore by State Bank of India (SBI). Pursuant to it,
SBI had distributed in tranches an amount of Rs. 23.50 Crores towards
term loan and the cash credit limit of Rs. 1 Crore had not been disbursed
as the project was yet to be completed.
3. The CD had been irregular in servicing the loan and despite restructuring
loan on 16.01.2009 and rescheduling the payment it had remained a
persistent defaulter. Subsequently, SBI had issued a recall notice to the CD
recalling the loan on 01.11.2012 demanding payment of Rs. 33,93,00617.24/
- as on 30.10.2012 without any avail, which forced SBI to file O.A. No.188 of
2013 under the Recovery of Debts Due to Banks and Financial Institutions
Act, 1993 before the Debt Recovery Tribunal at Jaipur for recovery of Rs.
39,69,10,137.88 as on 21.07.2013.
4. Further, SBI by way of an Assignment Agreement executed on 20.03.2014
had assigned the debt of the CD under Section 5 of the SARFAESI Act to the
FC and by its virtue, got itself substituted before the DRT vide order dated
09.04.2015.
5. Prior to the Assignment Agreement, SBI had also invoked Section 13(2) of
SARFAESI Act which was challenged successfully by the CD on the ground

that it had been invoked prematurely (before the expiry of 90 days) for its
classification as a Non-Performing Asset (NPA). DRT Jaipur had set aside
the notice under Section 13(2) of the SARFAESI Act which was appealed
against and upheld by the Debt Recovery Appellate Tribunal (DRAT).
However, the order passed be DRAT is under challenge before Hon’ble
High Court of Delhi and on 16.12.2016, it equivocally stated that “The
pendency of this writ petition will not prevent the petitioners from issuing
a fresh notice under Section 13(2) of the SARFAESI Act.” Thus, on 01.02.2017,
the FC issued another notice under Section 13(2) of SARFAESI Act.
6. The Learned Counsel for FC had pointed out that in the audited financial
statements for the financial year 2013-14, the Auditors had given a qualified
opinion which clearly stated that the CD has long term fund deficiency, no
provisions had been made in the accounts for additional interest, penal
interest etc. as claimed by SBI/Alchemist ARC and that the CD stopped
providing interest on loan of SBI w.e.f. 01.04.2011 on the ground that the
loan had been declared NPA by SBI.
7. The Learned Counsel for FC also pointed out that the claim cannot be
disputed as the auditors had clearly mentioned SBI /Alchemist ARC as the
creditors of CD and further asserted that “in case the settlement does not
come in force or settled at the higher amount more than shown in the
balance sheet” then contingent liability will be not more than Rs.
17,20,29,058.39 as at 31.03.2014.
8. It was contended by the Learned Counsel for FC that the CD is heavily
indebted not only to it but also to other secured creditors and unsecured
creditors.
9. The Bench granted an opportunity of hearing to the CD on the basis of
‘Principles of Natural Justice’. The CD had not refuted the claim made by
the FC but preferred to take the following objections:
• The FC does not have the locus standi to maintain the application
under Section 7 of the Code as it is not a Financial Creditor.
• The Assignment Deed which was executed by SBI in favour of the FC
is against the circulars issued by RBI as at the time of executing the
deed, the account of the CD was not NPA.
• The CD had filed a civil suit in the court of Senior Civil Judge, Jodhpur
seeking inter-alia for a declaration that the Assignment Deed dated
20.03.2014 between SBI and FC is void and liable to be cancelled.
PRINCIPAL BENCH 5
• The Hon’ble High Court of Delhi vide order dated 19.01.2016 has
required status quo to be maintained as on that day and in the
circumstances, it cannot be disturbed.
10. Mr. Arunava Sikdar was proposed as the Interim Resolution Professional,
who gave necessary declarations under the Code.
Grounds of Admission and Details of the Order

A. The Bench, on perusal of the application and the supporting documents,
stated that the CD is heavily involved in debts as at present it is not able to
service even the interest component, leaving alone the repayment of the
principal amount. Moreover, on perusal of documents relating to charge,
the Bench observed that there are other financial creditors as well to
whom amounts are owed.
B. The Bench took note of the definition of the expression “default” under
Section 3(12) of the Code and observed that the CD has clearly defaulted in
relation to the term loan taken.
C. The Bench reasoned that the definition of “Financial Creditor” as defined
in Section 5(7) of the Code also includes a person to whom such debt has
been legally assigned or transferred to. The assignment in this case has
been made by virtue of the provisions of Section 5 of the SARFAESI Act by
SBI being the original lender.
D. The Bench further took note of Section 5 of the SARFAESI Act read with
Section 2(l), 2(v) and 2(za) wherein the expressions “Financial Asset”,
“Reconstruction Company” and “Securitisation Company” have been
defined respectively and noted that the Financial Creditor was/is in a
position to acquire rights or interest in a financial asset defined to include
any debt or receivables secured by, mortgage of, charge on, immovable
property notwithstanding anything contained in any agreement or any
other law. The Bench further mentioned the case of ICICI Bank v. APS Star
Industries wherein it was held that banks have the power to assign the
debts due to it since debt is an asset in the hands of the bank which can be
transferred by them.
E. The Bench also stated that for invoking the provisions of Section 13(2) of
the SARFAESI Act, NPA may be criteria but in relation to corporate insolvency
resolution process under IBC, NPA classification is not a condition precedent
and the proceedings before the Hon’ble High Court will not be a bar for
the Bench in considering this application.
F. The Bench also observed that the CD did not raise any serious dispute
when the FC apprised the Bench about the status quo order by stating that
it was issued to protect the possession of the assignee FC.
G. The Bench stated that the Insolvency Resolution Process as contemplated
under the Code is for the benefit of all the stakeholders including the CD.
The pending proceedings under the SARFEASI Act initiated by the FC are
exposing the assets of the CD to coercive action which is detrimental to
the CD, particularly when possession is in the hands of the FC.
H. The Bench admitted the application on the basis of above mentioned
grounds and issued following directions:
i. Declared a Moratorium as contemplated under section 14 of the
Code
ii. Appointed Mr. Arunava Sikdar as an Interim Resolution Professional
(IRP) for a period of 30 days.
Directed the parties to offer their co-operation to the Interim Resolution
Professional to enable him to discharge his duties under the provisions of the
Code.
PRINCIPAL BENCH 7
BEFORE THE PRINCIPAL BENCH NATIONAL COMPANY LAW

TRIBUNAL AT NEW DELHI
Present: CHIEF JUSTICE (Retd.) SHRI M.M. KUMAR, HON’BLE
PRESIDENT & SHRI R. VARADHARAJAN, MEMBER (JUDICIAL)
COMPANY PETITION NO. (IB)23/PB/ 2017
IN THE MATTER OF SECTION 7 OF THE INSOLVENCY AND BANKRUPTCY CODE,
2016 READ WITH RULE 4 OF THE (INSOLVENCY AND BANKRUPTCY APPLICATION
TO ADJUDICATING AUTHORITIES), RULES, 2016.
AND
IN THE MATTER OF:
ALCHEMIST ASSET RECONSTRUCTION COMPANY LIMITED
NEW DELHI-110001
...Financial Creditor
M/S HOTEL GAUDAVAN PVT. LTD.
REGD. OFFICE AT C-22, VAISHALI NAGAR,
JAIPUR-302021, RAJASTHAN
....Corporate Debtor
ADVOCATE FOR PETITIONERS: Mr. Abhirup Das Gupta Singh, Advocate
ADVOCATE FOR RESPONDENT: Mr. Abishek Singh, Advocate
ORDER
Brief facts as averred by the petitioner in filing this petition under Section 7 of the
Insolvency & Bankruptcy Code, 2016 (for brevity IBC) are as follows :
1. The petitioner (for brevity the “Financial Creditor”) is an Asset Reconstruction
Company incorporated under the provisions of the Companies Act, 1956 on
19.09.2002 having its registered office at New Delhi. The respondent (for brevity
the “Corporate Debtor”) is again a company registered under the provisions of
Companies Act, 1956 on 06.10.1986 having its registered office at C-21 and C-22,
Vaishali Nagar, Jaipur, Rajasthan - 302 201.
2. The ‘Corporate Debtor’, on 04.01.2008, was sanctioned a Term Loan of Rs.24
crores and a Cash Credit Limit of Rs.1 Crore by State Bank Of India (for brevity ‘SBI’).
Pursuant to the sanction, SBI had distributed in tranches commencing from
30.01.2008, a sum of Rs.23.50 Crores towards Term Loan and the component of
Cash Credit Limit of Rs.1 Crore has not been disbursed as of date as the project is
yet to be completed.
3. The Corporate Debtor has been irregular in servicing the loan, in relation to
both interest payment and principal repayment and despite restructuring of the
loan on 16.01.2009 and rescheduling the repayment; the Corporate Debtor remains
a persistent defaulter till today.
4. In the said circumstances SBI had issued a recall notice to the Corporate
Debtor recalling the loan on 01.11.2012 demanding repayment of
Rs.33,93,00,617.24 as on 31.10.2012 along with applicable interest without any
avail, which forced SBI to file O.A. No.188 of 2013 under the Recovery of Debts Due
to Banks and Financial Institutions Act, 1993 (for brevity the ‘RDDBFI Act’) before
the Debt Recovery Tribunal at Jaipur for recovery of outstanding amount as on
21.07.2013; for a sum of Rs.39,69,10,137.88.
5. Subsequent to the filing of the above O.A., SBI by way of an Assignment
Agreement executed on 20.03.2014 has assigned the debt of the Corporate
Debtor under Section 5 of the Securities and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002 (for brevity the ‘SARFAESI Act’) to the
Financial Creditor and who by virtue of the above assignment had got itself
substituted before the DRT in O.A. No.188 of 2013 vide order dated 09.04.2015.
6. The Counsel for the Financial Creditor while reiterating the above facts at the
time of making oral submissions represented that in addition to the proceedings
before the DRT which is pending and prosecuted by the Financial Creditor, SBI
prior to assignment had also invoked the provisions of SARFAESI. While SBI invoked
Section 13(2) of SARFAESI for the first time, the same was challenged successfully
by the Corporate Debtor, on the ground that it had been invoked prematurely i.e
even before the expiry of the period of 90 days for its classification as a Non
Performing Asset (NPA). DRT, Jaipur taking into consideration the said contention
had set aside the Section 13(2) notice which order even though appealed against
was upheld by Debt Recovery Appellate Tribunal (DRAT). However the said order
in appeal passed by DRAT is under challenge before the Hon’ble High Court of
Delhi in W.P.(C) No.11814 of 2015 and it is pointed out by the Learned Counsel for
the Petitioner that vide order dated 16.12.2016 the Hon’ble High Court had
unequivocally stated as follows:-
“The pendency of the writ petition will not prevent the petitioners from issuing
a fresh notice under Section 13(2) of the SARFAESI Act”.
7. Keeping in view the above order, the Learned Counsel for the Financial Creditor
represents that another notice under Section 13(2) has been issued by it on
01.02.2017. Learned Counsel for the Financial Creditor painstakingly took us
through the typed set filed on behalf of the Financial Creditor to demonstrate that
the debt has been repeatedly acknowledged by the Corporate Debtor in its audited
accounts as well as the fact of assignment and in this connection pointed out that
PRINCIPAL BENCH 9
in the audited financial statements for the year 2013-14 the auditors have given a
qualified opinion which reads as follows:-
BASIS FOR QUALIFIED OPINION
1) Financial Statements have been prepared on going concern basis in spite
of notice issued by ALCHEMISTARC dated 21.07.2014 for recovery of its
dues of Rs.45,34,13,224.78 (outstanding balance as certified by the
management of the company as at 31.03.2014 is Rs.44,05,70,391.58) u/s
13(2) read with section 13(13) of Securitization and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI
Act). The Company also has long term fund deficiency. These factors raised
doubts about the company’s ability to continue as a going concern which
is depend upon infusion of long term funds of its pay off the outstanding
amount of the term loan and/or sale of the fixed assets to pay off the
amount. No provisions has been made in the accounts for additional
interest, penal interest, liquidate damages etc. amounting to
Rs.17,20,29,058.39 for the period from 01.04.2011 to 31.03.2014 as claimed
by the above SBI/ALCHEMIST ARC. The same has been shown in the note
No. (L) as contingent liability in notes to the accounts attached to the balance
sheet. However, the company had been providing interest on the other
names on a basis as considered appropriate by the management upto
31.03.2011. The Company has stopped providing interest on the loan of
SBI w.e.f. 01.04.2011 on the ground that the loan has been declared NPA
by the SBI. The Accompanying financial statements do not include any
adjustments relating to the recoverability and classification of assets
carrying amounts or the amount and classification of liabilities that might
result, should company be enable to continue as a going concern (refer
note No. (L), consequential impact thereof on the financial statements is
not ascertainable.
8. The Claim of the Financial Creditor, it is contended cannot be disputed at all as
is evident at page no.441 of the typed set filed relating to ‘Contingent Liabilities’
which is to the following effect :
(L) CONTINGENT LIABILITIES;
Contingent liability is possible obligation that arise from past events whose
existence will be confirmed by the occurrence or non occurrence of one or
more uncertain future even beyond the control of the Company or a present
obligation that is not recognized because it is not probable that an outflow of
resources will be required to settle the obligation. A contingent liability also
arises in extremely rare cases when there is a liability that cannot be measured
realiably. The State Bank of India filed a suit against the company on 22.07.2013
to recover its dues of Rs.39,69,10,137.88/-. However, the State Bank of India

informed vide letter No.SAMB/CL/l/42 dated 04.04.2014 that he has absolutely
assigned all the rights, title and interests in financial assistance granted by him
to the company, in favour of Alchemist Asset Reconstruction Company Ltd.
(Alchemist ARC), vide assignments agreement dated 20.03.2014. The company
received notice u/s 13(2) read with 13(13) of Securitization and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act)
dated 21.07.2014 for the amount of Rs.45,34,13,224 (outstanding balance as
certified by the management of the company as at 31.03.2014 is
Rs.44,05,70,391.58). In case the settlement does not come in force or settled
atthe higher amount more than shown in the balance sheet then that difference
amount will be contingent liability which will be not more than
Rs.17,20,29,058.39 as at 31.03.2014.
9. Taking into consideration the records produced it is submitted by the Learned
Counsel for the Financial Creditor that the Corporate Debtor is heavily indebted
not only to it but also to other Secured Creditors as well as Unsecured Creditors
and that there is a clear case for initiation of the Insolvency Resolution Process as
contemplated under the IBC for the benefit of all the stake holders.
10. Even though the IBC does not expressly contemplate an opportunity of hearing
being granted to the Corporate Debtor nor filing of Objections, the Corporate
Debtor was given the opportunity keeping in view the Principles of Natural Justice
which are implicit in the provisions of the IBC. It is only in cases where the
principles of natural justice are expressly excluded then such principles cannot
be implied. There this Tribunal is bound to follow those principles. Accordingly
the Corporate Debtor was also given an opportunity to file reply and make oral
submissions before this Tribunal keeping in view the time line of fourteen days.
The claim made by the Financial Creditor has not been refuted but, the Corporate
Debtor has preferred to take the following objections:-
a. The Financial Creditor does not have the locus stondi to maintain the
Petition filed under Section 7 of the IBC as it is not a Financial Creditor.
b. The Assignment Deed which has been executed by SBI in favour of the
Financial Creditor is against the Circulars issued by the RBI as at the time
of executing the Assignment Deed the account of the Corporate Debtor
was not an NPA.
c. The Corporate Debtor has filed a suit in civil suit bearing No.194 of 2015 in
the Court of Senior Civil Judge Jodhpur seeking, inter alia for a declaration
that the Assignment Deed dated 20.03.2014 between SBI and Financial
Creditor is void and liable to be cancelled.
PRINCIPAL BENCH 11
d. In W.P.No.(C) 11814 of 2015 the Fion’ble High Court of Delhi vide order
dated 19.01.2016 has required status quo to be maintained as on that day
and in the circumstances it cannot be disturbed. Flence, keeping in view
all the above the Corporate Debtor contends that this Tribunal must reject
the petition as not maintainable.
11. We have carefully considered the rival submissions of the respective parties.
In relation to the requirements which need to be satisfied in order to maintain a
petition under Section 7 of the IBC we have already delineated the same in detail
in Nikil Mehta and Sons (FHUF) & Ors. Vs. AMR Infrastructure Ltd. (C.P. No.(IB)-
03(PB)/2017) decided on 23.01.2017 and again reiterated in Sanjive Kanwar v.
AMR Infrastructure (CP(IB) No.06/2017) decided on 16.02.2017 and Tomorrow
Sales Agency Pvt. Ltd. Vs. Raipur Power and Steel Ltd & Ors. (C.P. No. (IB)-09(PB)/
2017) decided on 23.02.2017. Taking into consideration the above decisions and
the overwhelming evidence placed before us to establish the claim of the Financial
Creditor in our view it is, primo facie established that the Corporate Debtor is
heavily involved in debts as at present it is not able to service even the interest
component, leave alone the repayment of the principal amount due to the Financial
Creditor. It is also evident from Annexure P 16 filed by the Financial Creditor which
is extracted from MCA portal relating to Corporate Debtor which relates to charges
registered. It reveals that there are other Financial Creditors as well, to whom
amounts are owed. However from Annexure P 16 it is further seen that in relation
to some of the loans for which the properties of the Corporate Debtor had created
charges have been satisfied as recently as 27.04.2016 evidencing that the
Corporate Debtor is having cash flow and is in a position to service loans. However
in relation to the Term Loan taken originally from SBI and subsequently assigned
by it to the Financial Creditor herein the Corporate Debtor has defaulted is clearly
evident in terms of Section 3(12) of the IBC which defines ‘default’ in the following
terms:
“default” means non-payment of debt when whole or any part or instalment of
the amount of debt has become due and payable and is not repaid by the
debtor or the corporate debtor, as the case may be;
12. The audited financial statements of the Corporate Debtor as extracted in the
earlier paragraphs for the year 2013-14 coupled with Annexure P-16 and the
statement of accounts annexed as Annexure P 11 filed upto 24.01.2017 by the
Financial Creditor discloses the extent of the debts owed and defaulted by the
Corporate Debtor. Can it be merely wished away based on some technical pleas
put forth by the Corporate Debtor? Would it be fair to defeat equity by accepting
technical pleas. We are afraid it cannot be so for the reason that the definition of
“Financial Creditor” as defined in Section 5(7) of the IBC also includes a person to
whom such debt has been legally assigned or transferred to. The assignment it
is contended by the Financial Creditor has been made by virtue of the provisions
of Section 5 of the SARFAESI Act by SBI being the original Lender.
13. A combined reading of Section 5 of the SARFAESI Act with Section 2(1), 2(v)
and 2(za) wherein “financial asset”, “reconstruction company”, “securitisation
company” have been respectively defined which shows that the Financial
Creditor was/is in a position to acquire rights or interest in a financial asset
defined to include any debt or receivables secured by, mortgage of, charge on,
immovable property notwithstanding any thing contained in any agreement or
any other law. The assignments of NPAs/debt has been considered elaborately
by the Hon’ble Supreme Court in the case of ICICI Bank v. APS Star Industries
reported in (2010) 10 SCC 1 and it has been held that banks have the power to
assign the debts due to it since debt is an asset in the hands of bank as a
secured creditor or mortgagee or hypothecatee and that a Bank can always
transfer its asset and such transfer in no manner affects any right or interest of
borrower (Corporate Debtor) and the moment bank transfers debt with underlying
security, borrower(s) ceases to be borrower(s) of assignor Bank and becomes
borrower(s) of assignee bank. In view of the above position of law we are
unable to appreciate the contentions of the Corporate Debtor. It is also to be
noted that for invoking the provisions of Section 13(2) of SARFAESI Act, NPA may
be a criteria but in relation to unfolding the Corporate Insolvency Resolution
Process as contemplated under the IBC, NPA classification is not a condition
precedent and proceedings pending before the Flon’ble High Court of Delhi will
not be a bar for this Tribunal in considering the instant petition. Further it is also
not seriously disputed by the Respondent when learned counsel for the
Petitioner/FinancialCreditor apprised this Tribunal about the status quo order
by stating that it was issued to protect the possession of the assignee ‘financial
creditor’ and therefore it would not be affected by triggering insolvency process
which has been invoked by the Petitioner itself.
14. It is also pertinent to note that the Insolvency Resolution Process as
contemplated under the IBC is for the benefit of all stakeholders including the
Corporate Debtor as the very Scheme of the IBC contemplates not only the
insolvency resolution process being put in motion by a financial or operational
Creditor but also the Corporate Debtor itself and this Tribunal has to take a holistic
view in entertaining the petition keeping in mind the interest of all the stake
holders. In view of the pending SARFAESI proceedings initiated by the Financial
Creditor herein it is no doubt evident that the assets of the Corporate Debtor are
being put to coercive action which is detrimental to the Corporate Debtor,
particularly when possession is in the hands Financial Creditor.
15. Keeping in view all of the above we are inclined to admit the Petition as well
PRINCIPAL BENCH 13
as grant a moratorium in terms of Section 14 of the IBC to be enjoyed by the

Corporate Debtor. The Interim Resolution Professional proposed in Form I of the
petition who has also given his consent as prescribed in Form 2 is hereby
appointed as the Interim Resolution Professional to exercise all powers and
subject to all duties as contemplated under the provisions of the IBC.
16. In the circumstances the petition is admitted on the above terms and the
parties will offer their co-operation to the Interim Resolution Professional (IRP) to
discharge the duties enjoined on him as contemplated under IBC.
(CHIEF JUSTICE M.M. KUMAR)

PRESIDENT
(R.VARADHARAJAN) MEMBER
(JUDICIAL)
Date: 31.3.2017
INTERNATIONAL RECREATION AND AMUSEMENT LTD.
Name of the Corporate Debtor International Recreation and Amusement

Limited
Name of the Operational S.R. Constructions
Creditor/Applicant
Company Petition No. (IB)-68(PB)/2017
Bench NCLT, Special Bench, New Delhi
Date of the Order 28.04.2017

Amount Involved Rs. 11.90 lakhs
Brief Facts of the Case:

1. S.R. Constructions (“Operational Creditor” or “OC”) had claimed that the
amount of Rs. 11, 90,978 is due owing to the letter of intent dated 28.01.2014
placed by International Recreation and Amusement Limited (“Corporate
Debtor” or “CD”) in relation to execution at their site of the interior work at
Administration Block at Water Park, Sector 29, Gurgaon.
2. The OC also claimed that prior to the letter of intent, an agreement dated
20.01.2014 was entered into by the parties in relation to execution of works
for a total sum of Rs. 76,60,000 and the payments were to be made within
a period of 21 days on the submission of the individual claims. The OC
further claimed that the amount of Rs. 76, 60,000 was enhanced by way
of amending agreement dated 27.09.2014 to Rs. 1,24,20,530.
3. The OC stated that work entrusted to it was completed on 20.09.2014 and
a Completion Certificate was also issued by the CD on 30.09.2014. A
period of 12 months was also provided as ‘defect liability period’ on the
date of issue of completion certificate and the period has also expired on
30.09.2015.
4. Subsequent to completion of work by OC on 07.11.2014, a final bill of Rs.
1,06,96,430 was raised against which the amount of Rs. 11,09,978 is
pending.
5. The OC had made various demands to CD vide email dated 06.05.2015
and again on 26.06.2015 for the payment of the outstanding amount but
the CD had failed to settle the amount.
PRINCIPAL BENCH 15
6. Subsequently, the OC issued a notice for winding up under the provisions

of Companies Act, 1956 which was duly acknowledged by CD yet no
payment was made.
7. A notice under IBC dated 30.01.2017 was issued to the CD against which
no reply or payment has been received.
8. Notice of the application had been dispatched by OC upon filing of the
instant petition under Rule 6(2) of the Insolvency and Bankruptcy
(Application to Adjudicating Authority) Rules, 2016 on 18.04.2017 and it
was delivered on the same day.

A. The Bench noted the work entrusted by the CD to OC had been fully
completed in view of the Virtual Completion Certificate issued by the CD.
It was also evident from the virtual completion certificate that work had
been physically completed on 30.09.2014 and all materials had been
removed by the OC from the work site. The defect liability period had also
expired and there was no record to establish defects in relation to work
carried out by the OC.
B. The Bench further noted that email dated 06.05.2015 showed that the
liability is not disputed by CD and it was agreed that part payment would
be released. The email dated 26.05.2015 showed that the CD had stated
that payment is under process and the same shall be released shortly, all
of which pointed out that the CD is not disputing the liability owed to the
OC.
C. The Bench also noted the compliance of issuance of notice under Section
8 of IBC by the notice issued on 30.01.2017 to which the CD responded by
email wherein it had sought sometime to finalize the pending issues but
no settlement was arrived at thereafter.
D. The Bench observed that the CD is not in a position to meet its current
liabilities and admitted the application. The Bench passed the following
orders in this respect:
i. Declared moratorium in terms of section 14 of the Code.
ii. Referred the matter to Insolvency & Bankruptcy Board of India for the
limited purpose of naming Insolvency Resolution Processional (IRP)
within a period of 10 days as mandated under Section 16(4) of the
Code as the OC had not named the IRP in the application.
BEFORE THE NATIONAL COMPANY LAW TRIBUNAL, SPECIAL

BENCH NEW DELHI
Company Application No.(IB)-68(PB)/2017
Present: CHIEF JUSTICE (Retd.) SHRI M.M. KUMAR, HON’BLE PRESIDENT &
Present: SHRI R. VARADHARAJAN, HON’BLE MEMBER (JUDICIAL)
S.R. CONSTRUCTIONS,
E-13b, KHANPUR LEXENSION, DEVLIROAD, KHANPUR
NEW DELHI-110062
...... APPLICANT COMPANY / OPERATIONAL CREDITOR
INTERNATIONAL RECREATION AND AMUSEMENT LTD.
Metro Walk, Sector 10 (Near Rithala Metro Station), Rohini NEW DELHI- 110 085
... CORPORATE DEBTOR
Counsel for the Applicants: Mr. Swaroop George, Advocate
Dr. Amit George, Advocate
ORDER
1. The Petitioner categorizing himself as ‘Operational Creditor’ has approached

this Tribunal with the present Petition against the ‘Corporate Debtor’ on the grounds
that out the total debt of Rs.11,90,978/- the entire amount is in default and in the
circumstances the Petitioner has been forced to approach this Tribunal under the
provisions of Insolvency and Bankruptcy Code, 2016 (for brevity hereinafter referred
to as IBC, 2016). It is the claim of the Petitioner that the amount claimed, as above,
arose by virtue of letter of intent dated 28.01.2014 placed by the Respondent
Corporate Debtor in relation to execution at their site of the interior work at
Administration Block at Water Park, Sector 29, Gurgaon. It is claimed by the
Petitioner/Operational Creditor that prior to the above letter of intent, an agreement
dated 20.1.2014 was entered into by the parties in relation to execution of works
in a total sum of Rs.76,60,000/- and according to the agreement, payments were
required to be made within a period of 21 days on the submission of the individual
claims. The above value, the Petitioner claims of Rs.76,60,000/- was enhanced
by way of amending agreement dated 27.09.2014 to Rs.1,24,20,530/-.
2. Pursuant to the above two agreements, the Petitioner avers that the work
entrusted to the Petitioner was successfully completed on 20.09.2014 and that in
relation to the successful completion, a Completion Certificate under the hand of
the Respondent Corporate Debtor was also issued on 30.9.2014. As per the
PRINCIPAL BENCH 17
agreement and the Completion Certificate issued by the Corporate Debtor, as

above, a period of 12 months was also provided as ‘defect liability period’ on the
date of issue of the Completion Certificate and the said period had also expired
on 30.09.2015. Subsequent to the successful completion of the works entrusted
by the Respondent to the Petitioner on 7.11.2014, a final bill was raised in a sum
of Rs.1,06,96,430/- and in relation to the said bill, a sum of Rs.11,09,978/- is
claimed as due from the Corporate Debtor in this Petition by the Petitioner. The
Petitioner avers that despite communications, rather repeated, the Respondent
is yet to settle the amount due to the Petitioner. Despite demands vide email
dated 6.05.2015 and again on 26.06.2015 on the part of the Respondent of the
sums due to the Petitioner, Respondent has failed to settle the amounts and in the
circumstances the Petitioner was constrained to initially issue a notice for winding
up under the erstwhile provisions of the Companies Act, 1956 which was duly
acknowledged by the Respondent but however no payments were made. In the
circumstances, another notice under IBC, 2016 dated 30.01.2017 was issued to
the Respondent/Corporate Debtor along with details of invoices and despite the
same the amounts have not been paid nor any notice of dispute has been given
by the Respondent as mandated under the provisions of IBC, 2016. Taking into
consideration the above facts, application has been filed before this Tribunal for
initiating Corporate Insolvency Resolution Process, as contemplated under IBC,
2016.
Notice of the Application as mandated to be dispatched by the Operational Creditor
upon filing of the instant Petition under Rule 6(2) of the Insolvency and Bankruptcy
(Application to Adjudicating Authority) Rules, 2016 seems to have been sent on
18.04.2017 and from the tracking report it is evident that on 18.04.2017 itself it has
been delivered.
3. A perusal of the Petition filed by the Petitioner and after also affording hearing
to the representation of the Learned Counsel for the Petitioner, it is evident from
the records, that in relation to the works as entrusted by the Respondent/Corporate
Debtor to the Petitioner/Corporate Creditor had been fully completed in view of
the Virtual Completion Certificate issued by the Respondent. It is also evident
from the virtual Completion Certification that work has been physically completed
on 30.09.2014 in all respects and that materials have also been removed by the
Petitioner from the work site. The defect liability period in interior work at
Administration Block, as contended by the Petitioner which has been specified
as 12 months from the date of Virtual completion i.e. 1.10.2014 to 30.09.2015 has
also expired and there is no record from and on the part of the Respondent to
establish that any defects have been notified in relation to the work carried out by
the Petitioner. On the other hand vide email dated 06.05.2015, it is seen that the
liability is not disputed by the Respondent and in relation to the current bill it is
agreed that a part payment would be released and vide email dated 26.05.2015,
it is seen that the Respondents have stated that payment is under process and
that the same shall be released shortly, all of which potnts out that the Respondent
is not disputing the liability owed to the Petitioner.
4. The notice to be issued under Section 8 of the 1BC, 2016 seems to have been
complied with by the Petitioner by issue of notice of default dated 30.01.2017 on
the Respondent and for which notice Respondent seems to have responded by
way of email wherein the Corporate Debtor has sought some time to finalize the
pending issues. Despite the said e-mail the Learned Counsel for the Petitioner
contends that the Corporate Debtor refused to meet the representative of the
Petitioner to settle amounts due to it.
5. All the above clearly points out that the Corporate Debtor for whatever reasons
is evading in settling the dues of the Petitioner/Operational Creditor who has
rendered services to the satisfaction of the Corporate Debtor and as contemplated
under the provisions of IBC, 2016 all of which are based on agreements and letter
of intent issued as given above. The act of the Corporate Debtor necessarily
connotes that the Corporate Debtor is not in a position to meet its current liabilities
and in the absence of any notice of dispute from the Corporate Debtor we are
constrained to hold that Corporate Insolvency Resolution Process is required to
be initiated under the relevant provisions of IBC, 2016.
6. A copy of this order shall be duly sent by the Registry to both the Corporate
Debtor as well as to the ‘Operational Creditor’, as contemplated under the IBC,
2016. However, moratorium as contemplated under the provisions of Section 14,
as extracted herewith shall also follow suit in relation to the Corporate Debtor.
(a) the institution of suits or continuation of pending suits or proceedings
against the corporate debtor including execution of any judgement, decree
or order in any count of law, tribunal, arbitration panel or other authority;
(b) transferring, encumbering, alienating or disposing of by the corporate
debtor any of its assets or any legal right or beneficial interest therein;
(c) any action to foreclose, recover or enforce any security interest created by
the corporate debtor in respect of its property including any action under
the Securitisation and Reconstruction of Financial Assets and Enforcement
of Security Interest Act, 2002;
(d) the recovery of any property by an owner or less or where such property
is occupied by or in the possession of the corporate debtor.
7. We also refer the matter to Insolvency & Bankruptcy Board of India for the
limited purpose of naming Insolvency Resolution Professional (IRP) to act as the
PRINCIPAL BENCH 19
Interim Resolution Professional within a period of 10 (ten) days as mandated

under Section 16(4) of IBC, 2016 as the Petitioner/Operational Creditor has not
named the Interim Resolution Professional in the application filed before this
Tribunal.
The Petition stands disposed of.
PRESIDENT
(R. VARADHARAJAN)
MEMBER (JUDICIAL)
M/S ERA INFRA ENGINEERING LTD.

Name of the Corporate Debtor M/s Era Infra Engineering Ltd.
Name of Operational Creditor/ Prideco Commercial Projects Pvt. Ltd.

Applicant
Company Petition No. 26(ND) of 2017

Amount Involved Rs. 68,23,328/- along with interest

thereon @ 24% per annum.
Brief facts of the case

1. M/s Era Infra Engineering Limited (“Corporate Debtor” or “CD”) was
incorporated on 03.09.1990 and has authorized share capital of Rs. 75
crores.
2. The CD awarded a contract to Prideco Commercial Projects Pvt. Ltd.
(“Operational Creditor or “OC”) by placing 7 work orders. The OC
successfully completed the awarded project to the complete satisfaction
of the CD. The CD, in order to discharge its liability, issued 7 post dated
cheques for a sum of Rs. 5,23,016/- each as full and final settlement.
Except one, all other cheques got dishonoured on presentation.
3. OC sent several reminder emails to CD but with no positive response.
Thereafter, OC serviced the legal notice on 10.01.2017 under Section 271of
the Companies Act, 2013 demanding a sum of Rs. 68,23,328/- along with
interest thereon @ 24% per annum.
Grounds of Admission and Details of the order

A. The Bench raised query with regard to limitation as the cheques were issued
on 15.03.2014, 15.04.2014, 15.05.2014, 15.06.2014, 15.07.2014 and 15.08.2014.
OC submitted that issuance of post-dated cheques and its non-payment
would give a fresh lease of limitation period and relied on the judgment of
Kerala HC in Ramakrishnan vs Parthasaradhy [2003 (2) KLT 613].
Post dated Cheques and Limitation Period
B. The Bench observed that the application is filed within limitation as the
20
PRINCIPAL BENCH 21
earliest cheque dishonoured was dated 15.03.2014 and present application

was filed on 01.03.2017. Further, issuance of cheque amounts to
acknowledgement of liability, as held in above judgment relied by OC.
C. The Bench further noted that the OC had complied with the requirement of
section 9(3) of the Code in as much as, the OC had furnished a copy of the
invoice demanding payment or demand notice, an affidavit to the effect
that there is no notice given by the CD relating to a dispute of the unpaid
operational debt and a copy of the certificate from the financial institutions
maintaining accounts of the OC confirming that there is no payment of the
unpaid operational debt by the CD.
D. The application was thus admitted and the Bench passed the following
order:-
i. Appointed Mr. Vivek Goyal, Practising Chartered Accountant, as an
Interim Resolution Professional (IRP) for a period of 30 days, since
IRP was not named in the application.
ii. Declared a Moratorium as contemplated under section 14 of the
Code
iii. IRP was directed to take steps and perform duties in terms of Section
15, 17 and 18 of the Code.
iv. The IRP was also directed to submit his report within 4 weeks.
Subsequent Development
Era Infra Engineering Limited has challenged the order of NCLT dated 12th April, 2017
before the NCLAT. The contention was that the NCLT admitted the case though the
application was incomplete. The Respondent/Operational Creditor contended that
the notice given under Section 271 of the Companies Act, 2013 should be treated as
notice under Section 8 of the Insolvency and Bankruptcy Code, 2016
Insolvency Resolution Process can be initiated by an Operational Creditor only on
the occurrence of default which is to be followed by a demand notice to be issued
under Section 8 of the Code. Rule 5 of Insolvency and Bankruptcy (Application to
Adjudicating Authority) Rules, 2016 also requires issuance of demand notice in the
prescribed form. CIRP can be initiated only after expiry of the period of 10 days from
the delivery of the notice or invoice demanding payment u/s 8(1) of the Code. As no
notice was given by the Operational Creditor in the prescribed form , NCLAT set
aside the order of NCLT and the application by the Operational Creditor stood
dismissed, interim arrangements etc. stood vacated, moratorium declared was
quashed, appointment of Interim Resolution Professional stood quashed and all
the actions taken by the IRP were declared illegal.
BEFORE THE NATIONAL COMPANY LAW TRIBUNAL, PRINCIPAL

BENCH NEW DELHI
Present: CHIEF JUSTICE (Retd.) SHRI M.M. KUMAR, HON'BLE
Insolvency Petition No. 26(ND) of 2017
In the Matter of :
Prideco Commercial Projects Pvt. Ltd.
Vs.
M/s. Era Infra Engineering Ltd.
This petition was filed on 01.03.2017. However, on the request made by the
counsel for the petitioner the matter was posted for hearing on 20.03.2017. The
issue concerning limitation period was not clearly stated and accordingly objection
was raised. The hearing was adjourned to 23.03.2017. Therefore, the period of 14
days commenced on 23.03.2017. Then submissions were made on 23.03.2017
when it was reserved for order. The next two days namely 25.03.2017 & 26.03.2017
being Saturday and Sunday have to be excluded for the purposes of counting the
period of 14 days. Likewise, the period from 01.04.2017 to 09.04.2017 would also
stand excluded being the vacation period in the Principal Bench. Therefore, the
order is being pronounced today i.e. 12.04.2017 within the period of 14 days as
per the provisions of Section 9 of the IBC even if the 10 days extended period
under Section 64 of the IBC is not included.
PRESIDENT
(R. VARADHARAJAN)
MEMBER (JUDICIAL)
Date : April 12, 2017
BEFORE THE NATIONAL COMPANY LAW TRIBUNAL, PRINCIPAL

BENCH NEW DELHI
Insolvency Petition No. 26 (ND) of 2017
In the Matter of :
Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for
initiating Corporate Insolvency Resolution Process against the Corporate Debtor.
PRINCIPAL BENCH 23
In the Matter of :
1. Prideco Commercial Projects Pvt. Ltd.
Through its Director, Having its registered office at :
A-551, Sector-19, Noida (U.P.)
....APPLICANT COMPANY/
OPERATIONAL CREDITOR
Vs.
2. M/s. Era Infra Engineering Ltd.
Through its Managing Director,
1107, Indraprakash Building 21,
Barakhamba Road, New Delhi-110001
....RESPONDENT/
CORPORATE DEBTOR
Counsel for the petitioner :
Shri Santosh Kumar, Advocate
Shri Rajiv Ranjan Mishra, Advocate
Shri Anant A. Pavgi, Advocate
ORDER
1. The petitioner, M/s Prideco Commercial Projects Private Limited have

approached this Tribunal under Section 9 of the Insolvency and Bankruptcy
Code, 2016 (for brevity the 'Code'). The prayer made by the petitioner is to
trigger insolvency resolution process against the respondent claiming that the
petitioner is an 'Operational Creditor' within the meaning of Section 5(20) and
the respondent owes operational debt to the petitioner within the meaning of
Section 5(21) of the Code. It has also been claimed that the respondent is a
defaulter in making the payment of operational debt and the claim is within the
period of limitation.
2. Brief facts necessary for disposal of the instant petition may first be noticed.
The 'Corporate Debtor' awarded a contract to the 'Operational Creditor’-petitioner
by placing seven work orders to it. The detail of the work orders is as follows :
1. EILE-EPC/2009-10/193, Dt. 17.03.2009 value Rs. 4,06,50,525/-
2. EILE-EPC/2009-10/215A, Dt. 01.04.2009 value Rs. 1,20,000/-
3. EILE-EPC/2009-10/232A, Dt. 20.04.2009 value Rs. 7,84,000/-
4. EILE-EPC/2009-10/304, Dt. 01.06.2009 value Rs. 3,66,240/-

5. EILE-EPC/2009-10/362, Dt. 03.06.2009 value Rs. 1,19,562/-
6. ElLE-EPC/2009-10/436, Dt. 01.09.2009 value Rs. 1,45,750/-
7. EILE-EPC/2010-11, Dt. 26.10.2010 value Rs. 61,60,000/- for construction,
transportation of WMM/GSB work from Km. 29+650 to Km. 93 +140 of
NH-10 from Delhi-Haryana border to Rohtak Section. The total contract
value was Rs. 4,83,47,077/- (Rupees Four Crore Eighty Three Lakhs Forty
Seven Thousand Seventy Seven Only).
3. It is the case of the 'Operational Creditor’-petitioner that it has successfully
completed the awarded project to the complete satisfaction of the 'Corporate
Debtor'. The 'Corporate Debtor' in order to discharge its liability issued seven
post-dated cheques for a sum of Rs. 5,23,016/- each as a full and final settlement.
Except one all other cheques were a dishonoured on presentation. The details of
the same has been provided by the 'Operational Creditor' which is explicit from
the following table:-
S.No. Cheque No. Drawn on Cheque dt. Amount
1. 5586 Union Bank of India, 15.02.2014 5,23,016/-
Greater Noida Branch
2. 3866 -Do- 15.03.2014 5,23,016/-
3. 4080 -Do- 15.04.2014 5,23,016/-
4. 5344 -Do- 15.05.2014 5,23,016/-
5. 5453 -Do- 15.06.2014 5,23,016/-
6. 5502 -Do- 15.07.2014 5,23,016/-
7. 5524 -Do- 15.08.2014 5,23,016/-

4. The 'Operational Creditor'-petitioner has claimed that it had sent several e-
mails to the Corporate Debtor on 03.03.2015, 28.05.2015, 30.10.2015, 26.03.2016,
09.05.2016 & 03.06.2016. None of the e-mails could evoke any positive response
towards the payment of the outstanding amount. It shows that the Corporate Debtor
has committed default. Thereafter the Operational Creditor-petitioner served a legal
notice on the Corporate Debtor on 10.01.2017 under Section 271 Companies Act,
2013 demanding a sum of Rs. 68,23,328/- (Rupees Sixty Eight Lakhs Twenty Three
Thousand Three Hundred and Twenty Eight Only) along with interest thereon @
24% per annum. The Corporate Debtor has maintained blissful silence by not
responding to the legal notice. Therefore, it has been claimed that there is a default.
PRINCIPAL BENCH 25
5. In support of the petition the master data of Corporate Debtor has also been
placed on record which reveals that it is (M/s Era Infra Engineering Ltd.)
incorporated on 03.09.1990. It has authorized share capital of Rs. 75,00,00,000/
- (Rupees Seventy Five Crore Only) divided into Rs. 35,00,00,000/- (Rupees Thirty
Five Crore Only) equity shares of Rs. 2 (Rupees Two Only) each. The paid-up
capital of the respondent of the Corporate Debtor is Rs. 66,31,99,000/- divided
into equity shares of Rs. 2 (Rupees Two Only) each. The Directors of 'Corporate
Debtor' company are Mr. Hem Singh Bharana, Mr. Ratanlal, Mr. Mast Ram, Mr.
Gaurav Rajoria and Mr. Dilip Kumar Sinha. The name of interim resolution
professional has not been proposed. A copy each of the work order issued by the
Corporate Debtor to the 'Operational Creditor’-petitioner and the dishonoured
cheques issued by it, e-mails sent to the Corporate Debtor and the statement of
accounts maintained by the Operational Creditor- petitioner have also been placed
on record. A copy of the Board resolution showing authorization to one Mr. Sandeep
Gupta, Director of the Company to file the instant petition has also been filed. The
petition has been accordingly presented by the authorized Director, Mr. Sandeep
Gupta.
6. We have heard learned counsel at some length. On our query as to how the
claim is covered by the period of limitation as provided by the Limitation Act, 1963
learned counsel took time on 20.03.2017 and then made submission on
23.03.2017. According to the learned counsel once the post-dated cheques were
issued with the dates of 15.03.2014, 15.04.2014, 15.05.2014, 15.06.2014, 15.07.2014
& 15.08.2014 then the claim cannot be considered as barred by limitation. The
cheques were dishonoured on presentation although the first cheque with the
date 15.02.2014 was replaced and payment was received. According to the
learned counsel the issuance of post-dated cheques and its non-payment would
give a fresh lease of limitation period. In support of his submission learned
counsel has placed reliance on a Division Bench judgment of the Kerala High
Court rendered in the case of Ramakrishnan v. Parthasaradhy, 2003 (2) KLT 613.
Learned counsel has also placed reliance on the observation made para 5 of the
judgment rendered by a learned Single Judge in the case of Gorilal Baldeodas v.
Ramjeelal Bhuralal, AIR 1961 MP 346. Likewise, reliance has also been placed on
Section 19 of the Limitation Act to argue that issuance of cheques by the Corporate
Debtor is part payment of principal amount and it extends the period of limitation
by further three years from the date of such payment. In that regard, reliance has
also been placed on a judgment of Delhi High Court rendered in the case of
Rajesh Kumari v. Prem Chand Jain, AIR 1998 Delhi 80.
7. Having heard the learned counsel and on perusal of the record with his able
assistance the question which arises is as to whether the Operational Creditor
fulfils all the requirements of Section 9(3) of the Code. The aforesaid provision
impose obligations on an Operational Creditor like the petitioner to furnish the

following documents along with the petition :
(a) a copy of the invoice demanding payment or demand notice delivered by
the Operational Creditor to the Corporate Debtor;
(b) an affidavit to the effect that there is no notice given by the Corporate
Debtor relating to a dispute of the unpaid operational debt;
(c) a copy of the certificate from the financial institutions maintaining accounts
of the Operational Creditor confirming that there is no payment of an
unpaid operational debt by the Corporate Debtor; and
(d) such other information as may be specified.
8. A perusal of the aforesaid would show that a copy of the invoice demanding
payment or demand notice delivered by the Operational Creditor to the Corporate
Debtor must be placed on record. An affidavit showing that there was no notice
given by the Corporate Debtor in raising a dispute of the unpaid operational
debt is also required to be filed. A copy of the certificate from the financial
institutions maintaining accounts of the Operational Creditor confirming that
there is no payment of an unpaid operational debt by the Corporate Debtor
should also be on record. A perusal of the paper book shows that the Operational
Creditor has placed on record a copy of the demand notice dated 08.01.2017
(P/8). There is an affidavit filed by Mr. Sandeep Gupta that the aforesaid demand
notice has not been responded to. It is further clear that the statement of accounts
maintained by the Operational Creditor has also been placed on record along
with the master data of the Corporate Debtor. The copies of the post dated
cheques and the invoices showing the "funds insufficient" issued by the Bank
dated 16.05.2014 (page 51), dated 23.06.2014 (page 53) have also been placed
on record. Therefore, we find that the requirements of Section 9 are substantially
fulfilled. The liability to pay has also not been disputed in view of the facts that
the Operational Creditor had received seven post dated cheques in lieu of full
and final settlement dated 21.01.2014 (page 57). We are further of the view that
the claim is within the period of limitation of three years as the earliest cheque
dishonoured is dated 15.03.2014 and the present petition was filed on
01.03.2017. We are also persuaded to take the view that issuance of a cheque
amounts acknowledging the liability to pay as per the Division Bench judgment
of Kerela High Court in Ramakrishnan's case which has been rightly relied
upon by the operational creditor. The reliance of the Operational Creditor on
other judgements is equally meritorious.
9. Therefore, we are of the view that it is a fit case for triggering the insolvency
resolution process. Accordingly, we initiate the insolvency resolution process. As
PRINCIPAL BENCH 27
the interim resolution professional has not been named, we appoint Shri Vivek
Goyal Practicing Chartered Accountant (Mobile No. 98155-22553) who is duly
registered with Insolvency Bankruptcy Board (IBBI/IPA-001/IP-00089/2016-17/
1117). The provisional insolvency professional shall take immediate steps in terms
of Section 14 as there would be a 'Moratorium' on the Corporate Debtor. The
provisions of Section 14 are extracted below for a ready reference and the same
reads as under :
14. (1) Subject to provisions of sub-sections (2) and (3), on the insolvency
commencement date, the Adjudicating Authority shall by order declare
moratorium for prohibiting all of the following, namely :
against the corporate debtor including execution of any judgment, decree
or order in any court of law, tribunal, arbitration panel or other authority;
(d) the recovery of any property by an owner or lessor where such property is
occupied by or in the possession of the corporate debtor.
(2) The supply of essential goods or services to the corporate debtor as may be
specified shall not be terminated or suspended or interrupted during
moratorium period.
(3) The provisions of sub-section (1) shall not apply to such transactions as may
be notified by the Central Government in consultation with any financial sector
regulator.
(4) The order of moratorium shall have effect from the date of such order till the
completion of the corporate insolvency resolution process:
Provided that where at any time during the corporate insolvency resolution
process period, if the Adjudicating Authority approves the resolution plan under
sub-section (1) of section 31 or passes an order for liquidation of corporate
debtor under section 33, the moratorium shall cease to have effect from the
date of such approval or liquidation order, as the case may be.
10. The insolvency resolution professional shall also take steps and perform his
duties in terms of Sections 15, 17 & 18. All personnel of the Corporate Debtor
including its promoters are expected to extend full cooperation to the interim
resolution professional as is provided by Section 19 and any other provisions of
the Code. The insolvency professional shall submit his report to us within four
weeks.
11. The petition stands disposed of in above terms.
PRESIDENT
(R. VARADHARAJAN)
MEMBER (JUDICIAL)
Date : April 12, 2017
PRINCIPAL BENCH 29
CLUTCH AUTO LTD.

Name of the Corporate Debtor/ Clutch Auto Ltd.
Applicant
Name of Operational Creditor/ M/s Incredible Unique Buildcon

Applicant Pvt. Limited
Company Petition No. CP No. (IB)-15(PB)/2017 (Section 10 of IBC,
2016 (Code)) and
CP No. (IB)-20(PB)/2017 (Section 9 of IBC,
2016 (Code))
Section involved Section 10 of the Code filed by Corporate

DebtorandSection 9 of the Code filed by
Operational Creditor
Amount involved Rs. 12,88,32,266/-
Status of Application Admitted CP No. (IB)-15(PB)/2017 (Section

10 of the Code) and dismissed CP No. (IB)-
20(PB)/2017 (Section 9 of the Code) with
the observation that Operational Creditor
can file for the claim.
Background
1. In this case, two applications were filed. First, by Clutch Auto Limited
(“Corporate Debtor” or “CD”) itself for initiation of insolvency proceedings
under Section 10 of the Code which was prior in time. Second, by M/s
Incredible Unique Buildcon Private Limited (“Operational Creditor” or “OC”)
for initiation of insolvency proceedings against CD under Section 9 of the
Code. The present order is a common order disposing off both the
applications.

1. CD was incorporated on 13.05.1971 as a Private Limited Company and
thereafter converted into a Public Limited Company on 23.01.1982.
2. CD filed list of Financial and Operational Creditors a perusal of which
showed that CD was in default for last more than 3 years with the total
sum owed to Operational Creditors being Rs. 12,88,32,266/-
3. CD also filed a copy of the audited financial statements for the financial
year ending 2015 along with the certified provisional financial statement
on January 31, 2017, details of the Financial/Operational Creditors etc.
4. CD stated that a reference was also filed before BIFR and the order for
admission of reference was passed in 2014 in respect of which a copy of
the extract of minutes of the Working Capital Consortium Members held
on December 17, 2012 approving TVE study/restructuring package was
also placed on record.
5. CD also proposed the name of Mr. Mahipal Sharan Gupta as an Interim
Resolution Professional (IRP) who gave necessary declarations under the
Code.

A. The Bench took note of the documents filed by the CD and held that
insolvency resolution process deserved to be initiated against the CD.
B. The Bench took exception to the long ‘moratorium’ enjoyed by CD on
account of registration of reference with BIFR and observed that resolution
must conclude within 180 days with no further extensions.
C. Accordingly, the Bench admitted the application and passed the following
order:
i. Appointed Mr. Mahipal Sharan Gupta as an Interim Resolution
Professional
ii. Declared moratorium as per the provisions of Section 14 of the Code.
iii. Interim Resolution Professional should perform all the duties cast
upon him under the Code.
The Bench however dismissed the petition no. (IB)-20(PB)/2017 with the
observation that ‘Operational Creditor’ could file its claim before the Insolvency
Resolution Professional as per the public notice likely to be issued.
PRINCIPAL BENCH 31
NATIONAL COMPANY LAW TRIBUNAL PRINCIPAL BENCH

NEW DELHI
C.P NO. (IB)-15(PB)/2017
CA NO.
PRESENT: CHIEF JUSTICE M.M. KUMAR Hon’ble President
SH. R.VARADHARAJAN Hon’ble Member (J)
ATTENDANCE-CUM-ORDER SHEET OF THE HEARING OF PRINCIPAL BENCH OF
THE NATIONAL COMPANY LAW TRIBUNAL ON 10.03.2017
NAME OF THE COMPANY: M/S. CLUTCH AUTO LTD.
SECTION OF THE COMPANIES ACT: U/s 10 of Insolvency And Bankruptcy Code
2016
S. No. NAME DESIGNATION REPRESENTATION SIGNATURE
1. Abhinav Lal Advocate For Applicant
ORDER
Order reserved.
(CHIEF JUSTICE M.M. KUMAR) PRESIDENT

(R. VARADHARAJAN) MEMBER (J)
ORDER
This Petition was initially filed on 09.2.2017 and was again re-filed on 20.2.2017.
However, Counsel for the petitioner requested for listing of the petition on 10.3.2017.
The matter was heard on 10.3.2017 and the order was reserved. On account of
the short spell of vacation, the Tribunal remained closed from 01.4.2017 to
09.4.2017. However, the orders are being pronounced on 10.04.2017 which is
within the period of 24 days (14+10 days).
(CHIEF JUSTICE M.M. KUMAR),
PRESIDENT
(R. VARADHARAJAN)
MEMBER (TECHNICAL)
Dated April 10, 2017
NATIONAL COMPANY LAW TRIBUNAL

PRINCIPAL BENCH, NEW DELHI
Present: Chief Justice (Retd.) Sh. M.M. Kumar, Hon'ble President
& Shri R. Varadharajan, Member (Judicial)
In the matter of :
IB-20 (PB)/2017 (Section 9 IBC)
M/s. Incredible Unique Buildcon Limited
Registered office at:
812/G1-15, Samrel Zone, Bhiwadi-301019,
Alwar (Rajasthan)
Also at 143, Swarn Park,
Mundaka, Delhi - 110042.........Petitioner
Vs.
IB-15 (PB)/2017 (Section 10 IBC)
M/s. Clutch Auto Limited
Registered office at:
2-E/14, First Floor,
Jhandewalan Extension
New Delhi -110055.........Respondent
Counsel for the applicant : Mr. Abhinav Lal, Advocate.
ORDER
1. This order shall dispose of IB No.20(PB)/2017 and IB No.15(PB)/2017. In the first

Petition, the prayer for initiation of insolvency process has been made by
operational creditor (M/s. Incredible Unique Buildcon Pvt. Limited) under Section
9 of the Insolvency and Bankruptcy Code, 2016 (for brevity 'the Code') against the
'corporate debtor' , namely, M/s. Clutch Auto Limited. In the second Petition, filed
under Section 10 of 'the Code', the 'corporate debtor' (M/s. Clutch Auto Limited)
has come forward with a prayer to initiate insolvency process against itself. The
second Petition was filed earlier than that of the first Petition.
IB 15(PB)/2017 :
2. M/s. Clutch Auto Limited has approached this Tribunal under Section 10 of 'the
Code' read with Rule 7 of Insolvency and Bankruptcy (Application to Adjudication
Authority) Rules, 2016 (for brevity 'the Rules'). According to averments made in
the petition, the 'corporate debtor' was incorporated as a private limited company
PRINCIPAL BENCH 33
on 13.05.1971 and thereafter, it was converted into public limited company on

23.01.1982. The authorized share capital of the corporate debtor is Rs.30 crores
(Thirty crores) and the paid up capital was Rs.18,76,04,300 (Eighteen Crores
Seventy six lacs and four thousands three hundred only). Vide Board Resolution
dated 14.12.2016, Mr. V.K. Mehta, Chairman & Managing Director has been
authorized to file the instant petition in this Tribunal (Annexure-2). The name of
the Interim Resolution Professional has also been proposed which is that of Mr.
Mahipal Sharan Gupta, 2425-A, Hudson Lane, Mall Road, Dr. Mukherjee Nagar,
Delhi - 110 009, Email : mahipal@indiacap.com. His certificate of eligibility and
acceptance to function as an Interim Resolution Professional has also been placed
on record (Annexure-5).
3. A list of financial and operational creditors has also been attached (P-3). A
perusal of the list would show that the 'corporate debtor' is in default for the last
more than 3 years. There is then a list of 'operational creditors' which contains as
many as 293 names and a total sum owes to them is declared to be
Rs.12,88,32266 (at page 25 of the paper book). The petitioner has further disclosed
the details of property against which the loan of the corporate debtor is fully or
partially secured along with details of the date of its creation, its estimated value
etc. A copy of the audited financial statements of the 'corporate debtors' as
petitioner for the financial year ending 31.03.2016 and 31.03.2015 along swith
certified provisional financial statement as on 31.01.2017 has also been placed
on record (Annexure-6). The statement of affairs has also been filed along with
documents as on 31.12.2016, list of assets and liabilities as on 31.1.2017 (P-7),
details of the financial/operational creditors (Annexure-3), particulars of any debt
owed by or to the 'corporate debtor' or by persons connected to it (Annexure-8)
have also been placed on record along with guarantees given in relation to the
debts (Annexure P-9). It has also given details of the members of the 'corporate
debtors' along with their share holding as on 31.01.2017 (Annexure P-10). An
affidavit in support of the Petition has also been filed. It has also been revealed
that a reference was filed before the BIFR and the order of admission of reference
passed in 2014 has been placed on record (Annexure P-12). A copy of the extract
of minutes of the working capital consortium members of the company held on
17.12.2012 approving TVE Study/restructuring package by banks along with
numerous letters have also been placed on record. The other record has also
been filed.
4. We have heard learned Counsel in both the Petitions and are of the view that
the insolvency process deserves to be initiated as the requirements of Section 10
of the Code and Rules framed thereunder have been fulfilled. A perusal of Section
10 would show that a corporate debtor may file such application for initiating the
insolvency resolution process where it has committed a default. It is required to
furnish information relating to its books of accounts and the documents relating
to the period as may be specified. A perusal of the paper book would show that
books of accounts and other attendant documents have been filed and an Interim
Resolution Professional has also been proposed. The petitioner itself has admitted
default. Accordingly, we hold that the Petition merits admission and the same is
accordingly admitted.
5. The result of the admission is that moratorium as per the provisions of Section
14 would commence from the date of the admission and all the following acts are
prohibited as enumerated which are selected in Section 14 of the Code.
14. Moratorium. – (1) Subject to provisions of sub-sections (2) and (3), on the
insolvency commencement date, the Adjudicating Authority shall be order
declare moratorium for prohibiting all of the following, namely :
the Securitization and Reconstruction of Financial Assets and Enforcement
of Security Interest Act, 2002 (54 of 2002);
morotorium period.
regulator.
plan under sub-section (1) of Section 31 or passes an order for liquidation of
corporate debtor under Section 33, the moratorium shall cease to have effect
from the date of such approval or liquidation order, as the case may be.
6. We believe and trust that interim insolvency resolution professional would
PRINCIPAL BENCH 35
show greater efficiency in the instant case for the reason that the 'operational
debtor' has already enjoyed 'Moratorium' for a long period of many years on
account of registration of reference with BIFR. It is trite to observe that from the day
a reference use to be registered with BIFR, there was automatic Moratorium in
terms of S.22 of Sick Industrial Companies (Special Provisions) Act, 1985 [see KSL
& Industries Ltd. v. Arihant Threads Ltd. & Ors. 2008 INSC 1421; Rishabh Agro
Industries Ltd. v. PNB Capital Services Ltd. (2000) 5 SCC 515]. We have made these
observations keeping in view the object of the 'Code' namely to get rid of 'NPA'
accounts and allow the dead investment to come into circulation. We were in fact
disposed to the view of refusing Moratorium in the present case for the above
reasons but have not taken that extreme view. However, the resolution in the
present case must conclude within 180 days. No further time would be warranted
unless creditors decide otherwise.
7. The Interim Resolution Professional shall perform all other duties cast upon
him in accordance with the provisions of the code like making of public
announcement, taking over the affairs of the management of the corporate debtors
and many other duties as per the Code.
8. We make it clear that the operational creditors in IB No.20(PB)/2017 may file its
claims before the Insolvency Resolution Professional in accordance with the
public notice to be issued like all other claimants.
9. As a sequel to the above discussion, IB No.l5(PB)/2017 is admitted and is
disposed of as such. However, IB No.20(PB)/2017 is dismissed with the
observation that 'operational creditor' therein may file its claim before the
Insolvency Resolution Professional, as per the public notice which is likely to be
issued.
10. Both the Petitions stand disposed of on the above terms.
PRESIDENT
(R. VARADHARAJAN)
MEMBER (JUDICIAL)
Dated 10.04.2017
RAIPUR POWER AND STEEL LTD & ORS

Name of the Corporate Debtor Raipur Power and Steel Ltd. & Ors.
Name of the Financial Creditor/ Tomorrow Sales Agency Pvt. Ltd.

Applicant
Company Petition No. C.P NO. (IB)-09(PB)/2017


1. M/s Tomorrow Sales Agency Pvt. Ltd, (“Financial Creditor” or “FC”) a non
banking financial company registered with RBI on 3.11.09 filed an
application under Section 7 of the Code against Raipur Power and Steel
Ltd. (“Corporate Debtor” or “CD”) stating that CD approached FC to avail
temporary unsecured loan on account of financial hardship and FC
advanced a loan of Rs. 15 crores, without any written agreement, to CD on
the condition that CD would repay the loan within 6 months along with
interest at the rate of 12% per annum.
2. Accordingly, the FC disbursed the amount over a period of time. It has
been averred that the loan amount and the accrued interest has been
admitted, acknowledged and confirmed by the CD vide communication
dated 01.04.2016.
3. According to FC, the CD is in default which occurred on 23.07.2015 and
the total amount of default is Rs. 17,37,00,000/- (inclusive of principal
amount and interest). Although, the CD had been paying interest @ 12%
p.a. and even TDS had been deduced by CD while making payments.
4. FC issued a demand notice on 10.08.2016 claiming the above amount
which was received by CD, however, no reply was given
5. FC’s contention is that since CD is unable to pay the debt, Insolvency
Resolution Process is required to be initiated. It relied upon Nikhil Mehta
and Sons (HUF) & Ors v. M/s. AMR Infrastructure Ltd. (C.P. No. (ISB)-03(PB)/
(2017) to contend that the Applicant is covered within the sphere of the
expression ‘Financial Creditor’ as mentioned in section 7 r/w section 5(7)
PRINCIPAL BENCH 37
of the Code and thus the loan advanced by the Applicant is a financial
debt in terms of section 5 (8) of the Code.
6. CD contended that since there was no written agreement between the
parties warranting the triggering of insolvency resolution process, regard
should be made to the advisories issued by the RBI. It further stated that
money given was not a loan but an advance to buy the share of CD. It
stated that since the CD had adequate liquidity, there was no need of any
such loan by CD.

A. The Bench, having regard to the judgment in Nikhil Mehta (supra), was of
the opinion that Respondent was a ‘Financial Creditor’. It observed that CD
had committed default since the factum of advance had not been disputed
and in fact, CD had paid interest @ 12% per annum. Further, the CD had
acknowledged the receipt of advance by confirming the same on
01.04.2016.
B. The Bench rejected the theory of advance money contented by CD as
unacceptable since the shares were purchased in the year 2015 and no
intimation was sent to the FC regarding the same. Further, since the
receiving of loan amount and interest thereon was already admitted, the
argument as to written agreement for advancing loan was held to be
devoid of merit.
C. Accordingly, the Bench issued following directions;
i. Appointed Mr. Sanjay Grover as an Interim Resolution Professional
(IRP).
ii. Directed the IRP to exercise all the powers of the Board of Directors.
iii. Declared Moratorium in terms of Section 14 of the Code Directed
making of necessary Public Announcement under Section 13 of the
Code.

NEW DELHI
C.P NO.(IB)-09(PB)/2017;
CA NO.
CORAM:
PRESENT: CHIEF JUSTICE M. M. KUMAR Hon’ble President
SH. R. VARADHARAJAN Hon’ble Member (Judicial)
NAME OF THE COMPANY
Tomorrow Sales Agency Pvt.
Vs.
Raipur Power and Steel Ltd. & Ors.
2016
S. No. NAME DESIGNATION REPRESENTATION SIGNATURE
Mr. U.K. Chaudhary, Sr. Advocate for the Petitioner.

Mr. Arun Kathpalai, Sr. Advocate for the Petitioner.
Mr. Deepak Biswas, Advocate for the Petitioner.
Mr. Mansumyer Singh, Advocate for the Petitioner.
Mr. Arjun Minocha, Advocate for the Petitioner.
Mr. Himanshju Vij, Advocate for the Petitioner.
Mr. Abhinav Vashishat Sr. Advocate for the Respondent.
Mr. Varun Jain, Advocate for the Respondent.
Ms Priya Singh, Advocate for the Respondent.
Mrt. Saurav Gupta Advocate for the Respondent.
Mr. Abheshik Kumar Advocate for the Respondent.
Ms Pallvi Advocate for the Respondent.
ORDER
1. The petitioner M/s. Tomorrow Sales Agency Pvt. Ltd. is a non-banking financial
company and is duly registered as such on 3.11.2009 by the RBI. A copy of the
certificate of registration issued by RBI has been placed on record (P-5). It claims
to be a ‘Financial Creditor’ within the meaning of section 7 of the insolvency and
Bankruptcy Code 2016 (for brevity ‘IBC’). It has also been claimed that when
PRINCIPAL BENCH 39
Respondent No.1 company approached it to avail temporary unsecured loan on

account of its great financial difficulty. The petitioner advanced to it a loan of Rs.15
Crores. The Respondent No.1-Company which is stated to be a ‘Financial Debtor’
had assured the petitioner that the loan would be repaid within 6 months.
Accordingly the petitioner disbursed to the respondents an unsecured loan of
Rs.15 crores @ 12% interest per annum which is much lower than the prevailing
rate of interest in the market. It has been asserted by the petitioner that the loan
was extended without even executing any formal agreement which was spread
over a period of four months. The details of the disbursement is given in a table
which reads as under:-
Date Payment Cheque UTR No.
No.
11.10.2014 Rs.1,00,00,000/- 00028 HDFCR52014101154777242
(Rs. One Crore Only) Drawn on HDFC Bank,
Stephen House Branch,
Kolkata
14.10.2014 Rs.1,00,00,000/- 00029 HDFCR5201410454870599

Kolkata
15.10.2014 Rs.1,00,00,000/- 00030 HDFCR25014101554906997

Kolkata
16.10.2014 Rs. 1,00,00,000/- 00033 HDFCR52014101654952680

Kolkata
18.10.2014 Rs.1,00,00,000/- 00034 HDFCR52014101855032543

Kolkata
05.11.2014 Rs. 1,00,00,000/- 00038 HDFCR52014110555630632

Stephen House, Branch
Kolkata
07.11.2014 Rs.6,00,00,000/- 00039 HDFCR52014110755697611

(Rs.1,00,00,000/-?) Drawn on HDFC Bank,
(Rs. One Crore Only) Stephen House Branch,
Kolkata
11.11.2014 Rs.1,00,00,000/- 00042 HDFCR52014111155846584

Kolkata
20.01.2015 Rs.1,00,00,000/- 00055 HDFCR52015012058514017
Kolkata
22.01.2015 Rs. 1,00,00,000/- 00056 HDFCR52015012258602442

Kolkata
2. A copy of the statement of account has also been placed on record. According
to the averment made in the petition the loan amount of 15 crores and the accrued
interest at the rate of 12 % has been duly admitted, acknowledged and confirmed
by the Respondent No.1-Company through communication for confirmation of
account dated 1.4.2016 for the financial year 2015-2016. The aforesaid confirmation
was delivered to the petitioner by the Respondent No.1-Company after affixing its
stamp and signature of one Mr. Neeraj Sharma. A copy of the same has been
placed on record (P-9). The interest amount due from 31.3.2016 to 31.1.2017 has
also been calculated and placed on record (p10). Thus the petitioner claims that
Respondent No.1-Company is in default of total amount of Rs. 17,37,00,000/- and
the default is alleged to have occurred on 23.7.2015. It is further pertinent to
mention that the ‘Corporate Debtor’ has been paying interest @ 12% as is evident
from the perusal of averments made in para 5.2.9 with the help of following table
Date Amount
February 23,2015 INR 36,71,754/- (Rs. Thirty Six Lakhs Seventy One
Thousand Seven Hundred and Fifty Four only)
May 05,2015 INR 27,00,000/- (Rs. Twenty Seven Lakhs only)
March 16, 2016 INR 40,50,000/- (Rs. Forty Lakhs and Fifty Thousand)
May 03, 2016 INR 15,00,000/- (Rs. Fifteen Lakhs Only)
June 04, 2016 INR 15,00,000/- (Rs. Fifteen Lakhs Only)
PRINCIPAL BENCH 41
3. As per the record for the financial year 2015-16 the Respondent No.1-Company
has defaulted in payment of monthly interest component for a period of 10 months.
However the TDS on the payable monthly interest, amounting to Rs.15,00,000
has been duly deducted by Respondent No.1-Company for the financial year
2014-15 and 2015-16 and also upto the month of June for Financial Year 2016- 7.
Copies of form 26AS have been placed on record (P-11)
4. On 10.8.2016 the petitioner sent a demand notice to the Respondent claiming
the aforesaid amount which was duly delivered to the respondent as is revealed
by the postal receipts and the tracking report which have been placed on record.
However no reply to the aforesaid notice has been received.
5. The petitioner has further pointed out that the Respondent No.1-Company had
informed it that they were expecting disbursement of substantial amount of loan
from its banker and then on such disbursement all outstanding debt was to be
cleared. It has been found by the Petitioner that the Respondent 1-Company has
availed fresh term loan of Rs. 160 crores in September 2015 through enhancement
of financial facilities already availed by it from a consortium of bankers having IDBI
Ltd. as a lead banker. The financial facilities have been availed by the Respondent
No.1-Company by creation of charge over two of its immovable properties.
6. Mr. U.K. Chaudhary and Mr. Kathpalia learned senior counsel for the petitioner
have vehemently argued that insolvency process must be initiated against
Respondent No.1-Company as it has defaulted in making the re-payment of the
huge loan amount of admitted liability. According to the learned counsel the
petitioner is squarely covered by expression ‘Financial Creditor’ as used in section
7 read with section 5(7) of the IBC and likewise the loan advanced by it has to be
regarded as a financial debt in terms of the provisions of Section 5(8) of the IBC.
Learned counsel has placed reliance on the judgement of this Bench rendered in
the case of Nikhil Mehta and Sons (HUF) & Ors. v. M/s AMR Infrastructure Ltd. (C.P.
No.(ISB)-03(PB)/2017.) decided on 23.1.2017. Learned counsel has placed reliance
on paras 11 & 12 of the judgment.
7. Mr. Abhinav Vasishat learned senior counsel has vehemently submitted that
there is no written agreement between the parties so as to warrant triggering of
any insolvency process. In that regard reliance has been placed on the various
advisories issued by the RBI. According to the learned counsel it was not a loan.
In fact the amount was advanced payment made to the Respondent No.1-
Company to purchase share. Accordingly shares have been purchased with the
total sum of the advance paid to the R-1-Company. Mr. Vaisisth also submitted
that there was no desperate need for any such loan for the Respondent No.1-
Company as it had adequate liquidity. In that regard reliance has been placed on
the statement of accounts filed with the compilation of document.
8. Having heard the learned counsel and on perusal of the paper book with their
able assistance we are prima-facie of the view that the petitioner is a financial
creditor and the respondent is a ‘Financial Debtor’. In that regard we are fortified
by the observations made by this Bench in paras 11 & 12 of the judgment rendered
in the case of Nikhil Mehta (supra) which reads as under:
“11. From a bare perusal of Section 7 of the IBC, it is patent that the insolvency
process can be triggered by a “Financial Creditor” individually or jointly against
a corporate debtor when default has occurred. The first question arises for
consideration is as to who a Financial Creditor’. In order to ascertain the
meaning of the expression we have to examine its definition as provided by
Section 5 which is application to Part II. We have already extracted the provisions
of Section 5(7) and 5(8) of the IBC which are relevant to the issue raised. Section
5(7) of IBC defines the expression “Financial Creditor” and Section 5(8) of IBC
defines the expression Financial debt’ which has been used in Section 5(7) of
IBC.
12. A perusal of definition of expression Financial Creditor’ would show that
it refers to a person to whom a Financial debt is owed and includes even a
person to whom such debt has been legally assigned or transferred to. In
order to understand the expression Financial Creditor’ the requirements of
expression ‘financial debt ‘have to be satisfied which is defined in Section
5(8) of the IBC. The opening words of the definition clause would indicate that
a financial debt is a debt along with interest which is disbursed against the
consideration for the time value of money and it may include any of the
events enumerated in sub clauses (a) to (i). Therefore the first essential
requirement of financial debt has to be met viz. that the debt is disbursed
against the consideration for the time value of money and which may include
the events enumerated in various sub-clauses. A financial creditor is a person
who has right to a financial debt. The key feature of financial transaction as
postulated by section 5(8) is its consideration for time value of money. In
other words, the legislature has included such financial transactions in the
definition of ‘Financial debt’ which are usually for a sum of money received
today to be paid for over a period of time in a single or series of payments in
future. It may also be a sum of money invested today to be repaid over a
period of time in a single or series of instalments to be paid in future. In
Black’s Law Dictionary (9th edition) the expression ‘Time Value ‘has been
defined to mean “the price associated with the length of time that an investor
must wait until an investment matures or the related income is earned. ” In
both the cases, the inflow and outflows are distanced by time and there is a
compensation for time value of money. It is significant to notice that in order
to satisfy the requirement of this provision, the financial transaction should
PRINCIPAL BENCH 43
be in the nature of debt and no equity has been implied by the opening
words of Section 5(8) of the IBC ”
9. We are also satisfied that Respondent No.1- Company has committed default
in respect of financial debt owed to the petitioner/financial creditor. The reasons
for our satisfaction are that the factum of advance has not been disputed. The
payment of interest @ 12% per annum was being made. It satisfies the requirement
of time value of money in such like transaction as is required by Section 5(8) to
constitute it as a ‘Financial Debt’. The Respondent No.1-Company has
acknowledged the receipt of advance by confirming the same on 1.4.2016 (p.9).
It is also evident that no reply to the demand notice dated 10.8.2016 (P13 colly) has
been entered by the Respondent No.1-Company. Therefore we are of the view
that the present petition warrants admission.
10. The arguments advanced on behalf of R-1-Company have failed to impress
us because the theory of advance money for purchase of shares cannot be
accepted because the shares were purchased in the year 2015 and no intimation
of the purchase of share has been sent to the petitioner. On the contrary the
Respondent No.1-Company have been paying interest @ 12% to the petitioner
company. The argument with regard to written agreement for advancing loan is
also devoid of merit once it is accepted that the amount has been received and
interest thereon has been paid at the rate of 12%. We are also unable to appreciate
that the confirmation of accounts on 1.4.2016 by one Mr. Neeraj Sharma under the
seal of R-1-Company is liable to be ignored on the ground that he was not
authorised to issue such certificate. The defence of the Respondent No.1-Company
is wholly illusory and we have no hesitation to reject the same.
11. For the reason stated above this petition is admitted.
12. As a Sequel to the above discussion the following directions are issued
pending the completion of Insolvency Resolution Process :
(a) The petition is admitted.
(b) Mr. Sanjay Grover, Company Secretary as named by the petitioners, is
appointed as an interim Insolvency Resolution Professional to conduct
the corporate insolvency process and manage the operation of the
Respondent No.1-Company. The professional shall remain bound by all
ethical norms and shall follow rules of his professional conduct strictly so
as to lend sanctity to the whole process apart from credibility to all his
action and report.
(c) The powers of the Board of Director of Respondent No.1-Company shall
remain suspended and those powers are to be exercised by the interim
resolution professional.
(d) There shall be interim order prohibiting Respondent No.1-Company from

transferring, encumbering, alienating or disposing of any of its assets or
legal right or beneficial interest therein.
(e) Respondent No.1-Company is restrained from instituting any suit or
continuing with any pending suits or/and any proceedings against the
Respondent No.1-Company. The execution of any judgement, decree or
order in any court of law, tribunal, arbitration panel or other authority shall
remain stayed. It shall be the duty of the interim insolvency professional to
carry out these directions at the earliest;
(f) There shall be prohibition of any action to foreclose, recover or enforce
any security interest created by Respondent No.1-Company in respect of
its property, including any action under the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002;
(g) There shall be restrained order for recovery of any property by an owner
or lessor where such property is occupied by, or in the possession of the
Respondent No.1-company.
13. We wish to make it clear that supply of goods and services to the Respondent
No.1-Company shall not be terminated or suspended during moratorium period
and the interim directions shall not apply to those transactions as may be notified
by Central Govt. in consultation with any financial sector regulator. The insolvency
professional shall at liberty to file any application to facilitate him to prepare the
resolution plan. By the adjourned date the insolvency professional shall file his
interim report.
14. List for further consideration on 25.4.2017.
PRESIDENT
(R. VARADHARAJAN)
MEMBER (J)
Dated: 23.2.2017
PRINCIPAL BENCH 45
M/S RAVE SCANS PVT.LTD.

Name of the Corporate Debtor/ M/s Rave Scans Pvt Ltd
Applicant
Company Petition No. (IB)-01(PB)2017

Amount involved Rs. 13.65 crores

1. M/s Rave Scans Pvt. Ltd. (“Corporate Debtor” or “CD”) filed an application
under Section 10 of the Code read with Rule 7 of IBC (Application to
Adjudicating Authority) Rules, 2016 for initiation of Corporate Insolvency
Resolution Process against itself.
2. The CD was incorporated on 27.03.2002 with Registrar of Companies
NCT and Haryana.
3. CD had obtained various loan facilities from Financial Creditors (“FCs”) like
Indian Overseas Bank, Bank of Baroda, PNB, Religare Finvest Ltd., Hero
Fincorp Ltd., Tata Capital Financial Services Pvt. Ltd. Apart from the FCs, CD
owed an amount of Rs. 13,65,49,293 to the Operational Creditor (“OC”) as
on 31.12.2016.
4. Some of the FCs like Indian Overseas Bank, Bank of Baroda, PNB have
already initiated action under section 13(2) of SARFAESI against the CD.
5. CD, in its application, also annexed copies of its financial statement for
FYs 2014-15 and 2015-16 as also provisional financial statement for period
upto 31.12.2016.
6. The CD had moved a reference under section 15(1) of the SICA on
01.09.2015 for declaring the CD as a sick company. On 14.09.2015, the
said reference was registered before BIFR as Case No. 116/2016. Since
the repeal of SIC (Special Provisions) Act, 1985 and abolition of BIFR, the
present application has been filed by CD.
7. The CD stated that it had been making profit till 2014. Even though its net
worth stands eroded as on date, yet, it is a going concern. It further stated
that it had filed the present application with the intent to restructure its
activities. There was slump in the business of the CD due to working

capital shortage as well as faulty installation of machinery purchased for
Rs. 14 crores from a German company. The CD had been incurring a
recurring expense of Rs. 23.7 lakhs per month to house the said machinery
due to lack of space in its factory.

A. The Bench noted the objects for which the Code was enacted, the essential
requirements of Section 10 of the Code and the applicable Regulations.
B. The Bench observed that the CD has furnished the information relating to
its audited and unaudited financial statements and details of Financial/
Operational Creditors. However, it was observed that save some sketchy
particulars, the CD has not given any road map as to how it is going to
keep itself afloat as a going concern.
C. However, keeping in view the objects for which the Code has been brought
into force and to balance the interest of all stakeholders, the Bench admitted
the application and passed following order:
i. Appointed Ms. Ritu Rastogi as Interim Resolution Professional (IRP).
ii. Declared Moratorium in terms of Section 14 of the Code
iii. Directed making of necessary Public Announcement under Section
13 of the Code.
PRINCIPAL BENCH 47
BEFORE THE NATIONAL COMPANY LAW TRIBUNAL

Company Petition No.(IB)-01(PB)2017
In the matter of :
Section 10 and other applicable provisions of the Insolvency and Bankruptcy
Code, 2016 read with Rule 7 of Insolvency and Bankruptcy (Application to
Adjudicating Authority) Rules, 2016.
IN THE MATTER OF :
M/S. RAVE SCANS PVT. LTD.
A-2, NARAYANA INDUSTRIAL AREA,
PHASE-II, NEW DELHI - 110028
APPLICANT COMPANY
AND
1) INDIAN OVERSEAS BANK
UNIT NO. 19 & 22,
MOOLCHAND SHOPPING COMPLEX,
DEFENCE COLONY, NEW DELHI-110024.
PH NO. 246923, 24621487 Email : iob0115@iob.in
2) BANK OF BARODA
Mid Corporate Branch,
lllrd Floor, Bank of Baroda Building,
16,Sansad Marg, New Delhi - 110 001.
PH No. 23441362, 23441364
Email : middle@bankofbaroda.com
3) PUNJAB NATIONAL BANK
LARGE CORPORATE BRANCH U&l Building City Centre,
Section -29, GURGOAN-122002 PH.No. (0124) 4908539
Email : bo4615@pnb.co.in
4) RELIGARE FINVEST LTD.
D3, P3B, District Centre,
Saket, New Delhi - 110017 PH No. (011) 39411411 Email : lone@religare.com
5) HERO FINCORP LTD.
34, Basant Lok, Vasant Vihar,
New Delhi - 110057 PH No. 49487197

Email : harmeet.sabharwall@herofincorp.com
6) TATA CAPITAL FINANCIAL SERVICES PVT LTD.
7th Floor, Videocon Tower,
Jhandewalan Extn.
New Delhi - 110055 PH No. 2261828282
Web: www.tatacapital.com
........ Bank / NBFC
PRESENT :
Counsel for the Applicant : Mr. Neeraj Chaudry
Representative of the Applicant : Ms. Charu Bhatnagar
Insolvency Professional : CA Ritu Rastogi Ms.
ORDER
This is an application which has been filed by M/s Rave Scans Pvt. Ltd. u/s 10 of
the Insolvency and Bankruptcy Code, 2016 (hereinafter for the sake of brevity
called ‘IBC’) and under Rule 7 of the Insolvency and Bankruptcy (Application to
Adjudicating Authority) Rules, 2016, initiating corporate insolvency resolution
process by the Corporate Debtor itself. The details of the Corporate Debtor is
given in Form 6 of the prescribed format which contains following particulars of
the corporate applicant, namely the applicant seems to have been incorporated
on 27.03.2002 with the Registrar of the Companies NCT and Haryana and having
been allotted with CIN No. U22190DL2002PTC114722. The authorised Share capital
as well as the Paid-up Capital presently of the Applicant is disclosed as Rs. 14 cr.
It is further represented by the applicant that the company has presently the
following financial creditors, namely :
S.No. Name of the Bank / NBFC Address
1) Indian Overseas Bank Unit No. 19 & 22, Moolchand
Shopping Complex, Defence Colony,
New Delhi -110024
Ph. No. 246923, 24621487
2) Bank of Baroda Mid Corporate Branch, lllrd Floor,

Bank of Baroda Building, 16,Sansad
Marg, New Delhi-110 001
PH No. 23441362, 23441364
PRINCIPAL BENCH 49
3) Punjab National Bank LARGE CORPORATE BRANCH

U&l Building City Centre, Section 29,
GURGOAN-122002
PH.No. (0124)4908539
4) Religare Finvest Ltd.. D3, P3B, District Centre, Saket, New

Delhi - 110017
PH No. (011) 39411411
5) Hero Fincorp Ltd. 34, Basant Lok, Vasant Vihar, New

Delhi - 110057
PH No. 4948719
6) Tata Capital Financial 7th Floor, Videocon Tower,

Services Pvt. Ltd. Jhandewalan Extn. New Delhi-
110055
PH No. 2261828282
and to all the above named it is claimed by the applicant that the Corporate
Debtor owes substantial sums. It is also disclosed that in addition to financial
creditors, the company also owes amounts to operational creditors in a sum of
Rs. 13,65,49,293.39 as on 31.12.2016.
The applicant claims that presently the company has in its Board of Directors two,
namely Mr. Bhavnesh Kumar Kanwar and Mr. Rakesh Kumar Bhatnagar, both
having been appointed on 27.03.2002 and as of today continuous to be in the
Board. The applicant further states that even though in the two years prior to filing
of this application, there were five Directors including the two mentioned above,
subsequently Mrs. Anuradha Bhatnagar, Mr. Gaurav Chatterjee as well as Mr.
Prem Nath Arora have resigned from the Board and are not part of the
management of the company any more. The applicant has also mentioned the
name of the Interim Resolution Professional proposed as Mrs. Ritu Rastogi, a
registered insolvency professional with the Insolvency and Bankruptcy Board of
India, having Registration No. IPA-01/2016-17/IP-00151. The Insolvency
Professional named as Interim Resolution Professional has also filed an
acceptance, to act as Insolvency Resolution Professional, provided an order
admitting the instant application is passed, as well as declaring inter alia that she
is eligible to be appointed as a resolution professional in respect of the Corporate
Debtor in accordance with the provisions of the Insolvency and Bankruptcy Board
of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016
as well as has also declared that there is no disciplinary proceedings which are
pending against her with the Board or ICAI or insolvency professional agency.
Further, it is also declared by the said insolvency professional that presently she
is not handling any interim resolution process, resolution process or as a liquidator

in any proceedings. The acceptance of the declaration has been made by the
insolvency professional in Form No. 2 dated 07.01.2017, duly signed by the
insolvency professional (IP).
At the time of moving the above said application, the counsel appearing for the
applicant represented that in the event of default committed in respect of payment
of the debt owed to the financial creditors who are also secured creditors of the
Corporate Debtor/Applicant, some of the Secured Creditors have issued notices
under Section 13(2) of the SARFESI Act 2002 and these notices have been issued
by the following secured creditors namely Indian Overseas Bank, Bank of Baroda
and Punjab National Bank and the said notices have been annexed to the
application itself. The extract of the relevant books of accounts of the Corporate
Debtor pertaining to the above three secured creditors as well as in relation to
three financiers of the company who have been named supra it is represented
have also been filed by way of financial information.
In addition to the above the counsel for the applicant also represented that copies
of the Corporate Debtors’ financial statement for the preceding two financial
years, namely 2014-15 and 2015-16 have been made as Annexure to its
application. Further, the provisional financial statement for the current financial
year made upto 31.12.2016 duly attested by the Directors of the company have
also been filed, for the consideration of this Tribunal.
Learned Counsel also represents that with respect to the assets of the company,
the charges created against the same in favour of the secured creditors of the
company along with date of creation as well as date of modification along with
the particulars relating to date of satisfaction, if any have also been filed which
shows that in relation to Banks the charges have not been satisfied. The particulars
regarding shareholding list of the company along with the names and address of
the shareholders it is claimed by the counsel for the applicant have also been
filed.
During the course of hearing it was represented by the counsel for the applicant
that the applicant company had moved on 01.09.2015 a reference u/s 15(1) of the
Sick Industrial Companies (Special Provisions) Act, 1985 for declaring the company
as a sick company and that on 14.09.2015, the said reference made by the
applicant company have also been registered before the BIFR as Case No. 116/
2016 which evidences that the applicant company has not been able to service
its debt and that the networth of the company has eroded as represented by the
learned counsel that since Sick Industrial Companies (Special Provisions) Act,
1985 has been repealed and BIFR has been abolished, the applicant company
being the Corporate Debtor does not have any other recourse than approaching
PRINCIPAL BENCH 51
this Tribunal under the above provisions of IBC for restructuring and hence has
sought to invoke, by virtue of this application the jurisdiction of this Tribunal and in
view of the same, the Tribunal may initiate the corporate insolvency process as
contemplated in IBC and also to confirm the Interim Resolution Professional as
proposed by the applicant.
At this stage, it is pertinent to point out that the matter was called on 13.01.2017.
There was no representation on behalf of the applicant and hence Tribunal was
forced to adjourn the matter to 16.01.2017.
On perusal of the application, as taken through by the counsel for the applicant,
certain omissions/deficiencies were noticed on 16.1.2017. The Tribunal vide its
orders dated 16.01.2017 as well as 18.01.2017 directed the applicant to comply
with the same.
The purpose for approaching the Tribunal by way of this application u/s 10 of the
IBC is stated to be that the Applicant company-Corporate Debtor intends to
restructure its activities and for which purpose even though it has approached
the secured creditors, principally the public sector banks, they have not favourably
considered for such a restructure proposal as the Corporate Debtor/applicant is
yet to receive any concrete response from the banks but on the other hand have
slapped the applicant company with the notices under SARFESI Act. The Corporate
Debtor represented by the learned counsel also submits that the slump in the
business basically arose due to working capital shortage as well as the faulty
installation of a machinery purchased from a world renowned German
conglomerate and manufacturer, namely Heidelberg, along with their Indian
counterpart and the machinery costing approximately Rs. 14 cr. although took
nearly three months to install, the said machinery failed to perform the functions
for which it was bought. Since the machinery as mentioned above was not able
to be accommodated due to lack of space in the factory owned by the Corporate
Debtor at their Narainaor at Gurgoan, the applicant/Corporate Debtor was forced
to lease out on rent the premises to accommodate the said machinery imported
from outside India for which the company has to incur a recurring expense of Rs.
23.7 lacs per month. It is further stated that because of the above said factors, the
Corporate Debtor suffered heavy losses amounting to Rs. 27.23 cr. and the
applicant company was not able to fulfill its confirmed orders, as the raw-material
such as papers and inks were spoiled as the company is predominantly engaged
in printing business and is contemplating of initiating legal action against the
manufacturer and its Indian coutner-part. The applicant company, it is stated was
a profit making and tax paying company till 2014 and as on date even though the
networth has eroded, is a going concern having on its pay roll 278 permanent
employees and other contractual labourer and if allowed to function as a going
concern can revive itself with additional finances with the support of banks.
The applicant company is presently hard pressed for working capital need which
it is not able to meet due to freezing of their account by the banks and the
accumulated expenses pending for payment for the present month i.e. January,
2017 approximate to Rs.2,61,26,921 as per details furnished with the note circulated
by the Counsel for Applicant.
Taking into consideration all the above aspects and since the company is a going
concern as defined u/s 20 of the IBC, it is submitted that it is a fit case for corporate
resolution process being initiated as contemplated under the IBC. The Interim
Resolution Professional named in the application is also personally present before
us and submitted that she is willing to act as such and is fully aware of duties
enjoined on her under IBC and relevant rules framed thereunder and that she will
act in the best interest of all the stakeholders while in office as such.
We have carefully considered the submissions of the applicant / Corporate Debtor
who itself has initiated the process for insolvency resolution. However, before
going into the merits of the application it is incumbent on this Tribunal to satisfy
itself of the bona fide of the application as well as the jurisdiction to entertain such
an application filed by the applicant / Corporate Debtor. The object and reasons
for bringing into force the IBC seems to be as follows :
“An Act to consolidate and amend the laws relating to reorganisation and
in a time bound manner for maximisation of value of assets of such persons, to
promote entrepreneurship, availability of credit and balance the interests of all
the stakeholders including alteration in the order of priority of payment of
Government dues and to establish an Insolvency and Bankruptcy Board of
India, and for matters connected therewith or incidental thereto.”
Pursuant to the above said objects, IBC 2016 (Act No. 31 of 2016) as approved by
both the Houses of Parliament, the Government of India seems to have notified
the provisions relating to Corporate Insolvency including Section 10 under which
the present application has been filed on 30.11.2016 vide Notification SO 3591 (E)
and the said notification to take effect on and from 01.12.2016. While through the
above said notification, Section 4 to Section 32 as well as Section 60 to Section 77
and other relevant provisions have been notified relating to Corporate Insolvency,
vide Notification No.SO 3687(E), the Central Government has notified that provisions
of Section 33 to Section 54 of the IBC have come into force w.e.f. 15.12.2016. The
definition clauses of IBC, save certain clauses which are not material in relation
to matter in hand have also been notified vide Notification No. SO 3355(E) dated
01.11.2016 to come into effect on the said date. However, provisions relating to
fast track corporate insolvency as well as voluntary liquidation of corporate persons
are yet to be notified as contained in Section 55 and 59 and as such we are not
PRINCIPAL BENCH 53
concerned as in the instant case it is not relevant. The Insolvency and Bankruptcy
Board of India (Board), as contemplated under the IBC have been constituted and
consequent to its constitution, the Insolvency and Bankruptcy Board of India (Board)
have framed Insolvency and Bankruptcy Board of India (Insolvency Resolution
Process for Corporate Persons) Regulation, 2016, vide notification IBBI/2016-17/
GN/REG004 dated 30.11.2016 with effect from 01.12.2016. Prior to the above
regulations relating to Insolvency Resolution for corporate persons, the Board
have notified other significant regulations in exercise of its powers, namely
Insolvency and Bankruptcy Board of India (Insolvency Professional Agencies)
Regulation 2016 notified vide IBBI/2016-17/GN/REG002 dated 21.11.2016, as well
as Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulation,
2016 vide Notification No. IBBI/2016-17/GN/REG003 dated 23.11.2016 coming
into force on 29.11.2016.
In exercise of the powers conferred by both the Companies Act, 2013 and as well
IBC 2016 (31 of 2016), the Central Government has notified the designated Benches
of the NCLT to exercise its jurisdiction, powers and authority of the Adjudicating
Authority conferred by or under Part II of the IBC relating to Corporate Insolvency
vide Notification No. 3591(E) dated 30.11.2016 to come into effect from 01.12.2016
and simultaneously have also notified vide G.S.R. 1108(E) dated 30.11.2016, the
Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 to
come into effect from 01.12.2016 and which Rules prescribes the procedure and
forms in relation to the IBC which are required to be adopted.
By virtue of the abovesaid Notifications issued by the Central Government it is
evident that this Tribunal is solely vested with authority to exercise its jurisdiction
in relation to Corporate Insolvency Resolution Process, save voluntary liquidation
proceedings as contemplated Under Section 59 of the Code which is yet to be
notified. Further, vide Notification G.S.R. 1119(E) issued by the Ministry of Corporate
Affairs dated 07.12.2016 and to take effect from 15.12.2016, proceedings in relation
to winding up pending before High Courts at the stages specified therein are
alone to be retained before the concerned High Courts. Since the instant application
does not, as such deals with the aspect of winding up, the said Notification may
not be relevant for our purposes.
The detailing of the various Notifications issued by the concerned authorities
prescribed under the respective statute as above becomes necessary and crucial
for the purpose of adjudication of the present application keeping in mind the
avowed objects of the IBC, 2016.
The provisions of Section 10 of IBC under which the instant application is filed is
extracted as hereunder:
(1) Where a corporate debtor has committed a default, a corporate applicant
thereof may file an application for initiating corporate insolvency resolution

process with the Adjudicating Authority.
(2) The application under sub-section (1) shall be filed in such form, containing
such particulars and in such manner and accompanied with such fee as
may be prescribed.
(3) The corporate applicant shall, along with the application furnish the
information relating to –
(a) its books of account and such other documents relating to such
period as may be specified; and
(b) the resolution professional proposed to be appointed as an interim
(4) The Adjudicating Authority shall, within a period of fourteen days of the
receipt of the application, by an order –
(a) admit the application, if it is complete; or
(b) reject the application, if it is incomplete:
Provided that Adjudicating Authority shall, before rejecting an application,
give a notice to the applicant to rectify the defects in his application within
seven days from the date of receipt of such notice from the Adjudicating
Authority.
(5) The corporate insolvency resolution process shall commence from the
date of admission of the application under sub-section (4) of this section.
The above provision of IBC Code discloses that the following procedures are
required to be completed by a Corporate Debtor in initiating the process of
insolvency:
(i) Existence of a Corporate Debtor.
(ii) Such a Corporate Debtor must have committed a default.
(iii) On the satisfaction of (i) and (ii) above a Corporate Applicant may file an
application for initiating Corporate Insolvency Resolution Process.
(iv) Such an application as contemplated in (iii) above shall be filed in such
forms, containing such particulars and in such manner and accompanied
with such fee as may be prescribed.
(v) Along with the application as in (iv) above, information relating to books of
accounts and other documents relating to such period as may be specified.
(vi) The Applicant to name the Resolution Professional proposed to be
appointed as an Interim Resolution Professional.
PRINCIPAL BENCH 55
Section 10 of the IBC confers a discretion on this Tribunal to either admit or reject
the application on this Tribunal and in case of rejection to give an opportunity to
the applicant before such rejection to rectify the defects within seven days from
the date of receipt of such notice from the Adjudicating Authority.
The term “Corporate Debtor” has been defined under Section 3(8) of Part - I of
the Code to mean a Corporate Person who owes a debt to any person and
‘default’ is defined Under Section 3(12) of Part -I of the Code to mean "non-
payment of debt when whole or any part or instalment of the amount of debt has
become due and payable and is not repaid by the debtor or the corporate debtor,
as the case may be”. The term ‘Corporate Applicant’ is also defined under Section
5(5) of the IBC, 2016 as follows :
(a) corporate debtor; or
(b) a member or partner of the corporate debtor who is authorised to make
an application for the corporate insolvency resolution process under the
constitutional document of the corporate debtor; or
(c) an individual who is in charge of managing the operations and resources
of the corporate debtor; or
(d) a person who has the control and supervision over the financial affairs of
the corporate debtor;
In the instant case, both the ‘Corporate Debtor’ and the ‘Corporate Applicant’ are
one and the same person and it is seen that the applicant is a Corporate Entity as
evidenced by the Constitutional Documents of the applicant filed along with the
application. Further as per the statement made by the counsel at the time of
representation it is stated that the applicant was only involved in BIFR proceedings
and that no liquidation order has been made against it and hence in the
circumstances the applicant cannot be considered as a person not entitled to
make application as specified in Section 11 of IBC. The conjoint reading of
‘Corporate Debtor’ and ‘Corporate Applicant’ as extracted above also discloses
that the Corporate Debtor can itself put in motion its own Insolvency Resolution
Process by filing an application. In relation to the existence of default the applicant
has filed the notices issued by some of the Secured creditors, being Public Sector
Banks Under Section 13(2) of the SARFESI Act against which it is represented that
the Applicant has not made payments in satisfaction of the said notices resulting
in default and have also not approached the concerned DRT for any other remedies.
Going further the term ‘Corporate Insolvency Resolution Process’ though not
defined under IBC, 2016, is seen to be defined in Insolvency and Bankruptcy
Board of India (Insolvency Resolution Process for Corporate Persons) Regulations,
2016 to mean “the insolvency resolution process to corporate persons under
Chapter II of Part II of the Code" and under which part the instant application is
seen to have been filed.
The forms and particulars to be contained in application as well as the manner of
filing and the fee required to accompany the application seems to have been
prescribed in the rules termed under Insolvency and Bankruptcy (Application of
Adjudicating Authority) Rules, 2016 and as per the said Rules the form to be
adopted is Form 6 therein by a Corporate Applicant and particulars and documents
as specified therein are required to be filed by the Applicant. Since we have
already dealt in detail in the opening paragraphs supra of this order relating to
information furnished, we are not repeating the same for sake of brevity, as the
essential particulars as contemplated has been provided by the Applicant in the
application filed earlier, on 10.01.2017, as well as the additional particulars
provided vide filing by the Applicant of the Paper Book on 20.01.2017 as directed
by this Tribunal.
In relation to information relating to books of accounts, audited financial statements
have been filed for preceding two years for the year ended 31.03.2015 and year
ended 31.03.2016 and unaudited financial statement for the period made upto
31.12.2016. The Schedule of Creditors, both secured and unsecured has been
made upto 31.12.2016 attested by a director of the applicant company.
The applicant in the application has also named the Interim Resolution
Professional as required under the IBC, the application being an application
made by a Corporate Debtor, in compliance with Section 12 of the Code and
whose name has already been mentioned in paragraph supra. It is evident from
the additional typed set filed by the Applicant that the Interim Resolution
Professional named by the Applicant is formally registered with the Insolvency
and Bankruptcy Board of India which is evidenced by the Certificate issued by the
said Board along with IP Registration No. 1BB1/IPA-001/IP-00151/2016-17/1247
under the hand of Deputy General Manager of the said Board. The Interim
Resolution Professional named in the application has duly filed Form No. 2 as
prescribed under the Insolvency and Bankruptcy (Application to Adjudication)
Rules, 2016 in which the declaration as required to be made to the effect that no
disciplinary proceedings are pending against her, which is a pre-requisite as per
Section 16 of the Code has also been made.
A perusal of the financial information filed for the period ended 31.03.2015 and
31.03.2016 as well as for the period ended 31.12.2016 discloses the following :-
Reserves and Surpluses indicating erosion of net worth to the extent of following
As on 31.03.2015 32,93,87,515/-
As on 31.03.2016 (19,80,44,830/-)
PRINCIPAL BENCH 57
As on 31.12.2016 (41,02,30,224/-)
Long term borrowings and other liabilities discloses the following for the above
years :
As on 31.03.2015 236,151,396
As on 31.03.2016 292,296,591
As on 31.12.2016 340,604,475
Current Liabilities :
31.03.2015 858,322,075
31.03.2016 1,397,869,390
31.12.2016 1,099,678,181
The above figures indicate steady erosion of networth but on the other hand an
increase in borrowings thereby contributing to further erosion in net worth due to
payment of financial cost which the Applicant Company is not able to service due
to fall in revenue earned from operations as evidenced from the financial
statements:
Revenue From Operations :
31.03.2015 1,482,603,397
31.03.2016 1,354,550,056
31.12.2016 513,661,007
The figures extracted as above only indicates further erosion of networth what
with continuing fall in the operations of the Applicant Company as it seems to
have fallen into a debt trap and thereby a candidate for setting in motion the
Insolvency Resolution Process as contemplated under IBC and as sought for by
the Corporate Debtor who itself as given above is the Applicant. The applicant
company save some sketchy particulars has not given any road map as to how
it is going to keep itself afloat as a going concern. However, keeping in perspective
the objects for which IBC has been brought into force and to balance the interest
of all stakeholders we are satisfied that the instant application warrants to be
admitted to prevent further erosion of capital and to safeguard the assets of the
Applicant Company/Corporate Debtor. For the reasons aforementioned while
admitting the Application we issue the following directions :
(i) Appoint Mrs. Ritu Rastogi, a Practicing Chartered Accountant and
Registered Insolvency Professional as the Interim Resolution Professional
as contemplated under Section 16 of the IBC and her term of appointment
shall be for a period of thirty days from the date of this order or as may be
determined by the Committee of Creditors whichever is earlier;
(ii) In terms of Section 17 of the IBC, from the date of her appointment the
powers of the Board of Directors shall stand suspended and the
management of the affairs shall vest with the Interim Resolution
Professional and the officers and managers of the Corporate Debtor shall
report to the Interim Resolution Professional who shall be enjoined to
exercise all the powers as are vested with Interim Resolution Professional
and strictly perform all the duties as are enjoined on the Interim Resolution
Professional under Section 18 and other relevant provisions of the IBC.
(iii) We further direct the Interim Resolution Professional in exercise of the
powers vested in the Tribunal by virtue of Section 18(1)(g) of the IBC to
forthwith seal the premises of the factories and office of the corporate
debtor for a day or two utmost and prepare a complete list of inventory of
assets of the corporate debtor physically available, in the presence of
both the directors of the Corporate Debtor and the representatives of the
Public Sector Banks namely, IOB, BOB and Punjab National Bank after due
notice to the respective Bankers who shall be witnesses to taking the
inventory of assets and attest the inventory list as such.
(iv) The Interim Resolution Professional shall strictly act in accordance with
IBC, all the Rules framed thereunder by the Board or the Central
Government and in accordance with the Code of Conduct governing her
profession and as an Insolvency Professional with high standard of ethics
and moral.
(v) The Interim Resolution Professional shall endeavour to constitute the
Committee of Creditors at the earliest not later than two weeks from the
date of this Order.
(vi) It is hereby directed that the Corporate Debtor its properties, personnel
and persons associated with the management shall extend all cooperation
to the Interim Resolution Professional in managing the affairs of the
Corporate Debtor as a going concern and extend all cooperation in
accessing books and records as well as assets of the Corporate Debtor.
Further in terms of Section 13 of the IBC this Tribunal declares a moratorium in
relation to the following matter as contemplated under Section 14 as follows:-
(a) The institution of suits or continuation of pending suits or proceedings
against the corporate debtor including execution of any judgement,
decree or order in any court of law, tribunal, arbitration panel or other
authority;
PRINCIPAL BENCH 59
(b) Transferring encumbering, alienating or disposing of by the corporate

(c) Any action to foreclose, recover or enforce any security interest created
by the corporate debtor in respect of its property including any action
under the Securitization and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (54 of 2002);
(d) The recovery of any property by an owner or lessor or where such property
is occupied by or in the possession of the corporate debtor.”
The Interim Resolution Professional appointed by this Tribunal is also directed to
cause a public announcement within 3 days from the date of this order as
contemplated under Regulation 6 of the Insolvency and Bankruptcy Board of
India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 of
the initiation of Corporate Insolvency Resolution process in terms of Section 13(1
)(b) of the Code read with Section 15 calling for the submission of claims against
the Corporate Debtor.
Finally the Interim Resolution Professional shall file a report of events before this
Tribunal every week in relation to the Corporate Debtor without fail.
PRESIDENT
(R. VARADHARAJAN)
MEMBER (JUDICIAL)
Dated 25.01.2017
AHMEDABAD BENCH 61
AHMEDABAD BENCH
62
AHMEDABAD BENCH 63
M/S STEEL KONNECT (INDIA) PVT.LTD.

Name of the Corporate Debtor M/s Steel Konnect (India) Pvt. Ltd.
Name of the Financial Creditor/ M/s Hero FinCorp Limited

Applicant
Company Petition No. (IB)/05/NCLT/AHM/2017

Bench NCLT, Ahmedabad Bench
Amount Involved Rs. 6,62,48,691/- along with interest

1. M/s. Steel Konnect (India) Private Limited (“Corporate debtor” or “CD”)
entered into Master Facility Agreement (“agreement”) dated 18.12.2015
with M/s Hero FinCorp Limited (“Financial Creditor or “FC”) wherein FC
advanced loan of Rs. 7 crores as per sanction letter dated 16.12.2015. The
said agreement was subject to creation of a Hypothecation Lien Mark by
CD on the machinery to be funded by FC.
2. A supplementary agreement dated 18.12.2015 was entered into which
provided re-payment of loan within 60 months.
3. As per the agreed terms, FC disbursed Rs. 5,89,85,430/- to M/s Anupam
Industries Ltd and Rs. 1,10,14,570/- to CD. Further, as per agreed terms,
instalments were required to be paid through ECS by way of Equated
Monthly Instalments.
4. The CD had defaulted in making payments since beginning and from
November, 2016, the CD completely stopped making payment of EMIs.
The instalment for November, 2016 towards payment of principal and
interest dishonoured due to insufficiency of funds. The FC stated that CD
had deliberately committed default in repayment of loan amount.
5. FC terminated the agreement and supplementary agreement and called
upon CD to pay Rs. 6,62,48,691 along with overdue EMI charges and
interest at rate of 13% with additional penal interest at 2% pm over and
above agreed interest rate.
6. Since no reply was received, FC invoked clause 12.10 of the agreements
and referred the matter to arbitration.
7. Thereafter, the present application was filed.
Grounds of admission and details of the Order

A. The Bench took note of the Master Facility Agreement dated 18.12.2015,
personal guarantee dated 18.12.2015, sanction letter dated 16.12.2015,
Supplementary Agreements dated 18.12.2015 and 29.12.2015 filed by FC.
The Bench observed that the FC has satisfied that default has been
committed by CD.
B. The learned counsel for CD submitted that amount claimed by FC is not
correct, though; the CD was not in a position to deny the default or the
Loan Agreement.
order:
i. Appointed Mr. Ritu Rastogi as Interim Resolution Professional
ii. Declared moratorium under section 13(1)(a) read with section 14 of
the Code.
iii. Directed the IRP to cause public announcement of corporate
insolvency resolution process to be made immediately under section
13 and 15 of Code.
AHMEDABAD BENCH 65
BEFORE THE AJUDICATING AUTHORITY

(NATIONAL COMPANY LAW TRIBUNAL)
AHMEDABAD BENCH
AHMEDABAD
C.P. (IB) No. 5/7/NCLT/AHM/2017
Coram:
Present: Hon'ble Mr. BIKKI RAVEENDRA BABU
MEMBER (JUDICIAL)
ATTENDANCE-CUM-ORDER SHEET OF THE HEARING OF AHMEDABAD BENCH OF
Name of the Company :
Hero Fincorp Ltd.
V/s.
Steel Konnect (India) Pvt. Ltd.
Section of the Companies Act :

Section 7 of the Insolvency and Bankruptcy Code
S.NO. NAME DESIGNATION REPRESENTATION SIGNATURE
(CAPITAL LETTERS)
1. Shashikant Parmar Advocate Financial Creditor/

Applicant
2. Pavan S Godiawala Advocate Respondent
3. Ketan Parikh Advocate Respondent
ORDER
Learned Advocate Mr. Shashikant Parmar present for Financial Creditor/ Applicant.
Learned Advocate Mr. Pavan S Godiawala with Learned Advocate Mr. Ketan
Parikh present for Corporate Debtor.
Order pronounced in open Court. Vide separate sheet.
BIKKI RAVEENDRA BABU
MEMBER (JUDICIAL)
Dated this the 19th day of April, 2017.
BEFORE ADJUDICATING AUTHORITY (NCLT)

AHMEDABAD BENCH
AHMEDABAD
C.P. No. (IB) 05/NCLT/AHM/2017
CORAM: SRI BIKKI RAVEENDRA BABU
MEMBER (JUDICIAL)
Date: 19th day of April, 2017
In the matter of :
M/s. Hero FinCorp Limited
34, Community Center, Basant Lok,
Vasant Vihar, New Delhi-110057
Applicant / Financial Creditor.
Vs.
M/s. Steel Konnect (India) Pvt. Ltd.
86, 90, 91, Sardar Patel Ring Road,
Hathijan, Ahmedabad-382445, Gujarat
Respondent / Corporate Debtor.
Appearances : Mr. Venancio D’Costa with Mr. Shashikant Parmar, learned
Advocates for the Applicant Financial Creditor.
Mr. Ketan Parikh with Mr. Pavan Godiawala, learned Advocates for the Respondent
Corporate Debtor.
FINAL ORDER
Pronounced on 19th day of April, 2017
1. M/s. Hero FinCorp Limited filed this Petition under Section 7 of The Insolvency
and Bankruptcy Code, 2016 [hereinafter referred to as “the Code”] read with Rule
4 of The Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules,
2016 [hereinafter referred to as “the Rules”] seeking reliefs under Section 7(5)(a)
and Section 13(1)(a)(b)(c) of the Code.
2. M/s. Steel Konnect (India) Private Limited, entered into Master Facility Agreement
dated 18.12.2015 with M/s. Hero FinCorp Limited (Applicant) wherein it was
specifically agreed that the Applicant would advance loan of Rs. 7,00,00,000
(Seven Crores) as per Sanction Letter dated 16.12.2015. The said Agreement was
subject to the creation of a Hypothecation Lien Mark by the Corporate Debtor on
the machinery to be funded by the Applicant. As per the said Agreement, the First
Charge was created on the machinery. The Corporate Debtor furnished Personal
AHMEDABAD BENCH 67
Guarantees dated 18.12.2015 promising to repay the entire loan amount with
interest in case the Corporate Debtor defaults in repaying the said loan amount.
The Applicant and the Corporate Debtor entered into Supplementary Agreements
dated 18.12.2015 wherein it was agreed that the loan has to be repaid by the
Corporate Debtor within a period of 60 months. As per the Supplementary
Agreement, the Drawdown Facility would be Rs. 5,89,85,430. A Second
Supplementary Agreement dated 29.12.2015 was also entered into between the
Applicant and the Corporate Debtor wherein it was agreed that the loan towards
the facility has to be repaid within 60 months. The Drawdown Facility under the
Second Supplementary Agreement would be Rs. 1,10,14,570/-. The loan is subject
to a minimum monthly interest at the rate of 13 per cent per annum and in case of
late payment the Applicant is entitled to charge penal interest at 2% from the
Corporate Debtor. As per the agreed terms, Applicant would disburse an amount
of Rs. 5,89,85,430/- directly into the account of the Supplier, namely M/s. Anupam
Industries Ltd., whereas an amount of Rs. 1,10,14,570/- would be disbursed in the
Bank account of the Corporate Debtor with Bank of Baroda. The Applicant on 30th
December, 2015 disbursed an amount of Rs. 1,10,14,570/- by crediting the same
to the bank account of the Corporate Debtor with Bank of Baroda. An amount of
Rs. 5,53,99,250/- was disbursed on 24.12.2015 in the account of M/s. Anupam
Industries Ltd. An amount of Rs. 31,85,430/- was disbursed on 24.12.2015 in the
account of the Corporate Debtor. As per the agreed terms, instalments were
required to be paid through ECS by way of Equated Monthly Instalments. The loan
was granted subject to the Corporate Debtor providing two post-dated cheques
for a total amount of Rs. 7,00,00,000. The Corporate Debtor had defaulted in
making payment of monthly instalments. From the beginning the Corporate Debtor
was irregular in making the monthly instalments. From November 2016 the
Corporate Debtor completely stopped making payment of monthly instalments.
The instalment for November 2016 towards payment of principal and interest
dishonoured due to insufficiency of funds. Corporate Debtor deliberately
committed default in repayment of the loan amount without adhering to the
terms and conditions contained in Master Facility Agreement dated 18.12.2015,
Supplementary Agreements dated 18.12.2015 and 29.12.2015.
3. Considering the conduct of the Corporate Debtor, Applicant was constrained to
terminate the Master Facility Agreement dated 18.12.2015 and Supplementary
Agreements dated 18.12.2015 and 29.12.2015 vide notice dated 13.1.2017 and
called upon the Corporate Debtor to pay Rs. 6,62,48,691.21 ps. along with overdue
EMI charges and interest at the rate of 13% with additional penal interest at 2%
p.m. over and above the agreed interest rate. Since no reply was received from
the Corporate Debtor, the Applicant invoked the Clause 12.10 of the Agreements
and referred the matter to Arbitration.
4. Thereafter, Applicant filed this Petition. Applicant served the copy of the Petition
on the Corporate Debtor as required by Rule 4(3) of The Insolvency and Bankruptcy
(Application to Adjudicating Authority) Rules, 2016.
5. Pursuant to the order of this Adjudicating Authority also, the Applicant served
a notice of hearing on the Corporate Debtor. On behalf of the Corporate Debtor,
Messrs Ketan Parikh and Pavan Godiawala, learned Advocates appeared before
this Authority.
6. Heard the learned Counsel for the Applicant and the learned Counsel for the
Corporate Debtor.
7. The Applicant is a Company registered under the Companies Act. It is stated,
that certain sum of money is due to the Applicant from M/s. Steel Konnect (India)
Pvt. Ltd., which is a Corporate Debtor. The amount due to the Applicant from the
Corporate Debtor is due by virtue of Agreements dated 18.12.2015 and
Supplementary Agreements dated 18.12.2015 and 29.12.2015. Therefore, the
Applicant is a Financial Creditor. Respondent is a Corporate Debtor. The debt due
from the Corporate Debtor to the Financial Creditor is a ‘financial debt’ within the
meaning of Clause (d) of Sub-section (8) of Section 5 of the Code.
8. Applicant filed the Petition in Form No. 1 giving all the necessary particulars.
Applicant also suggested the name of Interim Resolution Professional. Applicant
also filed the written communication given by the Interim Resolution Professional
in Form No.2.
9. Although no notice is contemplated by the Financial Creditor to the Corporate
Debtor, Financial Creditor has issued a notice dated 13th January, 2017 vide
Annexure “S” and it was served on the Corporate Debtor. But no reply was given.
10. Before passing any order, Adjudicating Authority must satisfy that a default
has occurred and the Application filed by the Financial Creditor is complete and
that there is no disciplinary proceedings pending against the proposed Resolution
Professional.
11. Financial Creditor placed on record the Master Facility Agreement dated
18.12.2015; Personal Guarantee dated 18.12.2015 of Mr. Varun Vijay Gupta and
others; Sanction Letter dated 16.12.2015; Hypothecation Deed dated 18.12.2015;
and Supplementary Agreements dated 18.12.2015 and 29.12.2015. The Financial
Creditor also filed Annexure “Z” along with Additional Affidavit which show the
proof of default committed by the Corporate Debtor. Learned Counsel appearing
for the Applicant contended that the Corporate Debtor committed wilful default in
repayment of the loan instalments and therefore the Loan Agreement and the
Supplementary Agreements were recalled. Learned Counsel appearing for the
Corporate Debtor submitted that the amount claimed by the Financial Creditor is
AHMEDABAD BENCH 69
not correct. However, the learned Counsel for the Corporate Debtor is not in a
position to deny the default or the Loan Agreements.
12. From the material placed on record, this Adjudicating Authority is satisfied that a
default has been committed by the Corporate Debtor in repayment of the loan amount.
The Application is complete. There is a declaration by the proposed Insolvency
Resolution Professional that no disciplinary proceedings are pending against him.
13. In view of the above discussion, this Adjudicating Authority is admitting the
Petition under Section 7(5)(a) of the Code. This Adjudicating Authority is also
appointing the Chartered Accountant, Mr. Ritu Rastogi, residing at D-2/71, 2nd
Floor, Janak Puri, Delhi-110058 having Regn. No. IPA-01/2016-17/IP-00151 as
“Interim Resolution Professional” under Section 13(1)(b) of the Code.
14. Section 13 of the Code says that after admission of the application under
Section 7, the Adjudicating Authority shall pass an order declaring a moratorium
for the purposes referred to in Section 14. Therefore, in view of the commencement
of the Insolvency Resolution Process with the admission of this Petition and
appointment of the Interim Resolution Professional, this Adjudicating Authority
hereby passes the order declaring moratorium under Section 13(1) (a) prohibiting
the following as laid down in Section 14 of the Code :
(i) The moratorium order in respect of (a), (b), (c) and (d) above shall not
apply to the transactions notified by the Central Government.
(ii) However, the order of moratorium shall not apply in respect of supply
of essential goods or services to Corporate Debtor.
(iii) The Applicant shall also make public announcement about initiation
of Corporate Insolvency Resolution Process, as required by Section
13(1)(b) of the Code.
15. This order of moratorium shall be in force from the date of order till the
completion of Corporate Insolvency Resolution Process subject to the Proviso
under sub-section (4) of Section 14.
16. This Petition is ordered accordingly.
17. Communicate a copy of this order to the Applicant Financial Creditor and to the
Interim Insolvency Resolution Professional.
ADJUDICATING AUTHORITY
MEMBER JUDICIAL
Pronounced by me in open Court on this the 19th Day of April, 2017
AHMEDABAD BENCH 71
M/S GUJARAT OLEO CHEM PVT.LTD.

Name of the Corporate Debtor/ M/S Gujarat Oleo Chem Pvt. Ltd.
Applicant
Company Petition No. C.P. No.(IB)04//NCLT/AHM/2017
Bench NCLT, Ahmedabad bench

Section involved Section 10 of IBC, 2016 (Code) r/w Rule 7

of IBC (Application to Adjudicating
Authority) Rules, 2016
Amount involved Rs. 4879.63 lakhs

1. M/S Gujrat Oleo Chem Private Limited (“Corporate Debtor” or “CD”) filed a
reference u/s 15(1) of the Sick Industrial Companies (Special Provision)
Act,1985 with BIFR on 28.12.2006 vide Case No. 5 of 2007 which was
dismissed on 16.05.2007. In appeal, AAIFR set aside the order vide its
order 20.09.2012 and directed BIFR to conduct a Special Investigation Audit
and to take appropriate action.
2. During pendency of above appeal, CD filed another reference before BIFR
vide case no. 61of 2011 but both the references were dismissed by the
BIFR on 19.11.2013 which was ultimately set aside by the AAIFR vide its
order 05.05.2014. During the pendency of the reference, IDBI took
possession of secured assets of CD in accordance with the provisions of
the Securitization Act, 2002.
3. On dissolution of BIFR/AIFR, the present reference has been filed. No one
appeared before the Bench on behalf of the creditors even though notice
was served.

A. Summary of Financial Creditors filed by CD showed that the amount in
default to the creditors as Rs. 4879.63 Lakhs. The material on record showed
that CD had committed defaults. .
B. Accordingly, the Bench admitted the application and passed the following
order:
i. Appointed CA Shri Rakesh Chaturvedi as an Interim Resolution

Professional.
Code. However, supply of essential goods and services shall not be
terminated during moratorium period. However this doesn’t apply
to transactions notified by Central Government.
iii. IRP was directed to cause a public announcement immediately as
contemplated under section 13 read with section 15 of the Code.
AHMEDABAD BENCH 73

AHMEDABAD BENCH
AHMEDABAD
C.P. (I.B.) No. 4/10/NCLT/AHM/2017
Coram:
MEMBER JUDICIAL
Gujarat Oleo Chem Ltd.
V/s.
IDBI Bank Ltd. & Ors.
Section of the Companies Act : Section 10 of the Insolvency and Bankruptcy Code
(CAPITAL LETTERS)
1. Arjun R. Seth Advocate & Corporate Applicant

Solicitor
2.
ORDER
Learned Advocate Mr. Aijun Seth present for Corporate Applicant.

MEMBER (JUDICIAL)
BEFORE ADJUDICATING AUTHORITY

(NCLT)
AHMEDABAD BENCH
AHMEDABAD
MEMBER (JUDICIAL)
In the matter of:
Gujarat Oleo Chem Ltd.
B-817. Samartha Aishwarya,
Opp: Highland Park,
Oshiwara, Lokhandwala Andheri (West)
Mumbai-400053
Corporate Applicant.
Appearance :
Mr. Arjun R. Sheth, Learned Advocate and Solicitor
for the Corporate Applicant.
FINAL ORDER
1. M/s. Gujarat Oleo Chem Limited filed this Petition under Section 10 of The
Insolvency and Bankruptcy Code, 2016 [hereinafter referred to as “the Code”]
read with Rule 7 of The Insolvency and Bankruptcy (Application to Adjudicating
Authority) Rules, 2016 [hereinafter referred to as “the Rules”].
2. The Applicant is the Company registered under the Companies Act. The Applicant
had filed Reference under Section 15(1) of the Sick Industrial Companies (Special
Provisions) Act, 1985 [“SICA” for short ] with BIFR on 28.12.2006 vide Case No. 5 of
2007 based on Audited Balance Sheet as on 30th June, 2006. The said Reference
was dismissed by the BIFR on 16.5.2007 on the ground that the Company had
approached the BIFR with unclean hands and manipulated accounts.
3. This Applicant filed an Appeal before the Hon’ble AAIFR against the order of
the BIFR dated 16.5.2007. The Hon’ble AAIFR vide its order dated 20th September,
2012 set aside the order dated 16.5.2007 and remanded the matter to BIFR to
conduct a Special Investigation Audit under Section 16 of the SICA and directed
that on the basis of Special Investigation Audit Report, the BIFR would take
AHMEDABAD BENCH 75
appropriate action in the matter in accordance with law.

4. During the pendency of the appeal before AAIFR, this Applicant filed another
Reference before the BIFR vide Case No. 61 of 2011. The Reference No. 61 of 2011
was clubbed with Reference No. 5 of 2007. Ultimately, BIFR on 19.11.2013
dismissed both the References with an observation that Applicant was not
interested in pursuing the aforesaid References and wants to enjoy the protection
under SICA. This Applicant preferred an Appeal before the AAIFR against the
order of the BIFR dated 19.11.2013. The Hon’ble AAIFR, vide its order dated 5.5.2014
set aside the order of the BIFR dated 19.11.2013. In the Reference pending before
BIFR, Oriental Bank of Commerce had to submit Special Investigation Audit Report.
The IDBI filed Miscellaneous Application No. 557/14 requesting the BIFR to await
the Reference. The IDBI on behalf of Secured Creditors of the Company taken over
possession of the secured assets of the Corporate Applicant in terms of the
Securitisation Act. In the light of repealing of ‘SICA’ with effect from 1.12.2016, no
further proceedings took place before the BIFR on 29.11.2016.
5. According to the Applicant, in view of the Eight Schedule of The Insolvency and
Bankruptcy Code, 2016 there was amendment to The Sick Industrial Companies
(Special Provisions) Repeal Act, 2003. As per the said amendment, in Section 4,
for sub-clause (b), new clause was substituted and as per the new clause the
proceedings before the BIFR shall stand abated. The Proviso to Section 4 says,
that the company in respect of which Reference is abated may make Reference
to National Company Law Tribunal under the Insolvency and Bankruptcy Code
within 180 days from the commencement of the Insolvency and Bankruptcy Code.
The another Proviso to the amended Clause (b) says, that no fee is payable for
making Reference under the Insolvency and Bankruptcy Code in case the
Reference of the Company before BIFR is abated.
6. That is how this Petition is filed by the Corporate Applicant under Section 10 of
the Code read with Rule 7 of the Rules before this Adjudicating Authority. This
Petition was filed before this Adjudicating Authority on 2nd February, 2017 but it
was represented on 30th March, 2017. This Petition was listed for hearing before
the Bench of this Adjudicating Authority on 5.4.2017.
7. This Adjudicating Authority, on 5.4.2017, directed the Applicant to rectify certain
mistakes and list the matter again on 12.4.2017. The Corporate Applicant sent
notices to all the Financial Creditors and Operational Creditors by Speed Post as
per the order of this Adjudicating Authority. On 12.4.2017, none appeared before
this Adjudicating Authority on behalf of the Creditors.
8. Heard the arguments of the learned Advocate appearing for the Corporate
Applicant. The summary of Financial Creditors filed by the Applicant shows the
amount in default to the Creditors as Rs. 4879.63 Lakhs. The material on record
placed by the Corporate Applicant show that it has committed default. The
Applicant comes within the meaning of “Corporate Debtor” as defined in Section
5(a) of the Code. The Corporate Applicant, along with the Petition, furnished the
information as required under clause (a) and (b) of sub-section (3) of Section 10 of
the Code. The Corporate Applicant filed the Petition under sub-section (1) in the
prescribed form. The Corporate Applicant also proposed the name of the
Resolution Professional. The Corporate Applicant also filed written communication
of proposed Interim Insolvency Resolution Professional in Form-2.
9. Hence the Petition filed by the Corporate Applicant is admitted under Section
10(4)(a) of the Code.
10. Section 13 of the Code enjoins upon the Adjudicating Authority to exercise its
discretion to pass an order to declare a moratorium for the purposes referred to
in Section 14, to cause a public announcement of the initiation of corporate
insolvency resolution and call for submission of claims as provided under Section
15 of the Code. Sub-section (2) of Section 13 says that public announcement shall
be made immediately after the appointment of Interim Resolution Professional.
11. Hence, CA Shri Rakesh Chaturvedi, having Reg. No.IBBI/IPA-001 /IP-00234/
2016-2017/1336 and residing at Paresh Rakesh & Associates, 103, Namrata
CHS, Bldg. No. 15, Shastri Nagar, Link Road, Goregaon West, Mumbai-400104, is
appointed as “Interim Resolution Professional” who filed Form-2 and Certificate
of Registration issued by the Insolvency and Bankruptcy Board of India. This
Adjudicating Authority also directs the Corporate Applicant to make a public
announcement in terms of Clause (b) of Sub-section (1) of Section 13.
12. In the case on hand, it appears that the Reference made by the Applicant
Company was pending before the BIFR as on 29.11.2016. The said proceedings
stand abated in view of Eight Schedule of Section 252 of the Code. It appears that
the Applicant has enjoyed the protection order during the pendency of proceedings
before the BIFR. It appears from the Affidavit of the Corporate Applicant that IDBI
has taken possession of the secured assets of the Corporate Applicant in terms of
the Securitisation Act.
13. In view of the commencement of the Insolvency Resolution Process with the
admission of this Petition and appointment of the Interim Resolution Professional,
this Adjudicating Authority hereby passes the order declaring moratorium under
Section 13(1)(a) prohibiting the following as laid down in Section 14 of the Code :
(i) the institution of suits or continuation of pending suits or proceedings
AHMEDABAD BENCH 77
(ii) transferring, encumbering, alienating or disposing of by the corporate

(iii) any action to foreclose, recover or enforce any security interest created by
(iv) the recovery of any property by an owner or lessor where such property is
(a) However, the supply of goods and essential services to the corporate
debtor shall not be terminated or suspended or interrupted during
moratorium period. The moratorium order in respect of (i), (ii), (iii) and (iv)
above shall not apply to the transactions notified by the Central Government.
under sub-section (4) of Section 14.
16. Communicate a copy of this order to the Corporate Applicant and to the
Interim Insolvency Resolution Professional.
MEMBER JUDICIAL
Pronounced by me in open Court on this the 13th day of April, 2017.
M/S STRATUS FOODS PRIVATE LIMITED

Name of the Corporate Debtor M/s Stratus Foods Private Limited
Name of Operational Creditor/ M/s Umiya Trading
Applicant
Company Petition No. IB/03/NCLT/AHM/2017

Amount Involved Rs. 22,50,038/-


1. The claim of M/s. Umiya Trading (“Operational Creditor” or “OC”) is that
M/s. Stratus Foods Private Limited (“Corporate Debtor” or “CD”) purchased
goods from OC during the period from 01.04.2016 to 29.01.2017 vide various
retail invoices.
2. The CD accepted the goods without any complaint and as per the terms
and conditions of invoices, payment had to be made within 30 days from
date of supply of goods. But the CD failed to make payment.
3. Demand notice dated 20.02.2017 under section 8 of the Code was issued
claiming amount of Rs. 22,50,038/-. The said notice was served on CD on
21.02.2017. Even after receipt of statutory notice the CD did not give any
reply. On the expiry of period of 10 days, the OC filed this application on
03.04.2017. Notice was served by OC upon CD of filing of the application,
but no one appeared before the Tribunal on behalf of the CD.
A. The Bench formulated the issues: (i) whether the OC comes within definition
of ‘operational creditor’ (ii) whether respondent is a ‘corporate debtor’, (iii)
whether claim is an operational debt or not, and (iv) whether requirements
of section 9(1) to 9(4) of the Code are satisfied?
B. After considering the definition of ‘operational debt’, operational creditor’,
and ‘corporate debtor’, the Bench observed that the present application
for initiation of corporate insolvency process deserves to be admitted.
C. The Bench, accordingly, made the following order
i. Declared moratorium in terms of section13(1)(a) and 14 of the Code
AHMEDABAD BENCH 79
ii. Since no insolvency professional was named by OC, the Bench,

made recommendation to the Insolvency and Bankruptcy Board of
India (Board) for appointment of IRP.
Upon communication of the proposal for appointment of an IRP, the Bench directed
that it would pass separate order for public announcement.

AHMEDABAD BENCH
AHMEDABAD
CP. (I.B.) No. 3/9/NCLT/AHM/2017
Coram:
MEMBER (JUDICIAL)
Name of the Company:
Umiya Trading
V/s.
Stratus Foods Pvt. Ltd.
(CAPITAL LETTERS)
1. NITIN H PARIKH PCS Umiya Trading
2.
ORDER
Learned Advocate Mr. Nitin H Parikh present for Operational Creditor. None
present for Corporate Debtor.
List the matter after the recommendation is received from Insolvency and
bankruptcy board of India regarding the name of Interim Resolution Professional.
BKKI RAVEENDRA BABU
MEMBER (JUDICIAL)
AHMEDABAD BENCH 81
BEFORE ADJUDICATING AUTHORITY

(NCLT)
AHMEDABAD BENCH
AHMEDABAD
CORAM:
SRI BIKKI RAVEENDRA BABU, MEMBER (JUDICIAL)
In the matter of:

M/s. Umiya Trading
102, Sunmars Complex,
Navdurga Society, Nizampura,
Vadodara-390 002
Operational Creditor/ Applicant.
Vs.
M/s. Stratus Foods Private Limited
J.C. Patel Estate, Bharath Baugh,
N.H. No.8, Ranoli Crossing, P.O. Dashrath,
Vadodara-391740, Gujarat
Corporate Debtor.
Appearance :
Mr. Nitin H. Parikh learned PCS for the Applicant.
None present for the Corporate Debtor.
FINAL ORDER
1. M/s. Umiya Trading filed this Petition under Section 9 of The Insolvency and
Bankruptcy Code, 2016 [hereinafter referred to as “the Code”] read with Rule 6 of
The Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016
[hereinafter referred to as “the Rules”].
2. The claim of the Applicant is that Corporate Debtor, namely M/s. Stratus Foods
Private Limited purchased goods from the Operational Creditor during the period
from 1.4.2016 to 29.1.2017 vide Retail Invoices as per the following table :
Particulars Credit Date of Amount Payment Due Date

Memo Credit Terms of Payment
P.O. No P.O. Data No. Memo
PO/16/1 1/4/2016 1 1/4/2016 105000 Net 30 Days 1/5/2016
PO/16/69 6/4/2016 2 6/4/2016 12760 Net 30 Days 7/5/2016
PO/16/78 9/4/2016 3 8/4/2016 42000 Net 30 Days 7/5/2016
PO/16/152 15/4/2016 4 15/4/2016 105000 Net 30 Days 16/05/2016
PO/16/177 18/4/2016 5 18/4/2016 131250 Net 30 Days 19/05/2016
PO/16/315 30/4/2016 6 30/4/2016 110000 Net 30 Days 1/6/2016
PO/16/342 3/5/2016 7 3/5/2016 5200 Net 30 Days 4/6/2016
PO/16/375 7/5/2016 9 9/5/2016 37950 Net 30 Days 10/6/2016
PO/16/396 9/5/2016 10 10/5/2016 115000 Net 30 Days 11/6/2016
PO/16/476 14/5/2016 11 14/5/2016 115000 Net 30 Days 15/06/2016
PO/16/536 22/5/2016 12 22/5/2016 23000 Net 30 Days 23/06/2016
PO/16/597 28/5/2016 14 28/5/2016 115000 Net 30 Days 29/06/2016
PO/16/670 4/6/2016 15 4/6/2016 238000 Net 30 Days 5/7/2016
PO/16/811 16/6/2016 16 16/6/2016 122500 Net 30 Days 17/07/2016
PO/I6/884 23/6/2016 17 23/6/2016 123750 Net 30 Days 24/06/2016
PO/16/959 30/6/2016 18 30/6/2016 122500 Net 30 Days 1/8/2016
PO/16/1024 6/7/2016 19 6/7/2016 122500 Net 30 Days 7/8/2016
PO/16/1094 14/7/2016 21 14/7/2016 129850 Net 30 Days 15/08/2016
PO/16/1156 20/7/2016 22 20/7/2016 121500 Net 30 Days 21/08/2016
PO/16/1240 27/7/2016 23 27/7/2016 121500 Net 30 Days 28/08/2016
PO/16/1325 3/8/2016 24 3/8/2016 17010 Net 30 Days 4/9/2016
PO/16/1326 4/8/2016 25 4/8/2016 121500 Net 30 Days 5/9/2016
PO/16/1382 10/8/2016 26 10/8/2016 121500 Net 30 Days 11/9/2016
PO/16/1467 19/8/2016 27 19/8/2016 122500 Net 30 Days 20/09/2016
PO/16/1557 29/8/2016 28 29/8/2016 122500 Net 30 Days 30/09/2016

AHMEDABAD BENCH 83
PO/16/1623 6/9/2016 29 6/9/2016 122500 Net 30 Days 7/10/2016
PO/16/1698 13/9/2016 30 13/9/2016 122500 Net 30 Days 14/10/2016
PO/16/1764 20/9/2016 31 20/9/2016 122500 Net 30 Days 21/10/2016
PO/16/1824 27/9/2016 32 27/9/2016 6825 Net 30 Days 28/10/2016
PO/16/1835 28/9/2016 33 28/9/2016 123725 Net 30 Days 29/10/2016
PO/16/1905 4/10/2016 34 4/10/2016 122500 Net 30 Days 5/11/2016
PO/16/1970 12/10/2016 35 12/10/2016 122500 Net 30 Days 13/11/2016
PO/16/2031 19/10/2016 36 19/10/2016 122500 Net 30 Days 20/11/2016
PO/16/2079 25/10/2016 37 25/10/2016 9562 Net 30 Days 26/11/2016
PO/16/2080 26/10/2016 39 26/10/2016 127500 Net 30 Days 27/11/2016
PO/16/2152 4/11/2016 40 4/11/2016 127500 Net 30 Days 5/12/2016
PO/16/2201 12/11/2016 41 12/11/2016 137500 Net 30 Days 13/12/2016
PO/16/2256 18/11/2016 42 18/11/2016 137500 Net 30 Days 19/12/2016
PO/16/2296 22/11/2016 43 22/11/2016 225000 Net 30 Days 23/12/2016
PO/16/2295 22/11/2016 44 23/11/2016 140000 Net 30 Days 24/12/2016
PO/16/2372 30/11/2016 45 30/11/2016 140000 Net 30 Days 1/1/2017
PO/16/2446 7/12/2016 47 7/12/2016 23490 Net 30 Days 8/1/2017
PO/16/2451 9/12/2016 48 9/12/2016 137500 Net 30 Days 10/1/2017
PO/16/2513 16/12/2016 49 16/12/2016 139125 Net 30 Days 17/1/2017
PO/16/2594 24/12/2016 51 24/12/2016 132500 Net 30 Days 25/1/2017
PO/16/2655 30/12/2016 54 30/12/2016 130000 Net 30 Days 1/2/2017
PO/16/2790 6/1/2017 55 6/1/2017 130000 Net 30 Days 7/2/2017
PO/16/2761 12/1/2017 56 12/1/2017 130000 Net 30 Days 13/02/2017
PO/16/2805 20/1/2017 58 20/1/2017 130000 Net 30 Days 21/02/2017
59 25/1/2017 10600 Net 30 Days 26/2/2017
60 26/1/2017 4600 Net 30 Days 27/2/2017
PO/16/2883 29/1/2017 61 29/1/2017 130000 Net 30 Days 30/2/2017

3. The Corporate Debtor accepted the goods sold and supplied by the Applicant
Operational Creditor without any complaint.
4. As per the Terms and Conditions of Invoices, payment has to be made within
30 days from the date of supply of goods. But Corporate Debtor failed to make
payments.
5. Applicant issued Demand Notice dated 20th February, 2017 in Form No. 3
along with copies of Invoices as provided in sub-clause (a) of sub-Rule (1) of Rule
5 of the Rules, claiming Rs. 22,50,038/-. The said Demand Notice was served on
the Corporate Debtor on 21st February, 2017. Even after the receipt of the Demand
Notice, Corporate Debtor neither paid the said amount nor gave any reply as
called upon in the notice within a period of 10 days of the receipt of the Demand
Notice along with copies of invoices. Hence Applicant filed this Petition on 15th
March, 2017. This Petition was listed before this Adjudicating Authority on
03.4.2017. On 3.4.2017, Operational Creditor offered to serve notice to the
Corporate Debtor.
6. This Adjudicating Authority directed the Operational Creditor to file another set
of Petition with Annexures by giving page numbers and listed the matter on 4th
April, 2017.
7. On 4th April, 2017, Operational Creditor filed proof of service of notice on the
Corporate Debtor.
8. Heard learned PCS on behalf of the Operational Creditor. None present on
behalf of the Corporate Debtor.
9. In order to pass an order under Section 9(5) of the Code, the Adjudicating
Authority shall necessarily give a finding on the following aspects;
(i) Whether the claim is an operational debt or not;
(ii) Whether Applicant comes within the definition of “Operational Creditor”;
(iii) Whether M/s. Stratus Foods Private Limited, is a ‘Corporate Debtor’;
(iv) The requirements of sub-sections (1) to (4) of Section 9 of the Code read
with Rule 5 and 6 of the Rules 2016 have been followed by the Applicant.
10. (i) Sub-section (21) of Section 5 of the Code defines “Operational Debt” as
under :
“(21) "operational debt” means a claim in respect of the provision of goods or
services including employment or a debt in respect of the repayment of dues
arising under any law for the time being in force and payable to the Central
Government, any State Government or any local authority;”
AHMEDABAD BENCH 85
In the case on hand, the facts disclosed that Applicant supplied the goods to the
Corporate Debtor. Therefore, the claim in respect of cost of goods supplied by the
Applicant to Corporate Debtor is an ‘operational debt’.
(ii) “Operational Creditor” is defined in sub-section 20 of Section 5 of the Code.
“Operational Creditor” means,
“(20) “operational creditor” means a person to whom an operational debt is
owed and includes any person to whom such debt has been legally assigned
or transferred,"
Since the amount due to the Applicant is an ‘operational debt’, the Applicant is an
‘operational creditor’.
(iii) “Corporate Debtor” is defined in sub-section (8) of Section 3 of the Code which
reads as follows;
“(8) “corporate debtor” means a corporate person who owes a debt to any
person;”
In the present case, Corporate Debtor, namely M/s. Stratus Foods Private Limited
is a Company registered under the Companies Act and it is a “corporate person”
within the meaning of sub section (7) of Section 3 of the Code. Prima facie, the
facts disclosed that a debt is due from Stratus Foods Private Limited to the Applicant.
Therefore, Stratus Foods Private Limited is a “Corporate Debtor” within the meaning
of sub-section (8) of Section 3 of the Code. The dates of Invoices commence from
1.4.2016 and up to 29.01.2017. Therefore, the operational debt is within limitation
period.
“Operational Creditor” is required to deliver a Demand Notice along with copies
of Invoices to the “Corporate Debtor”. In the case on hand, ‘Operational Creditor’
complied with the said requirement.
(iv) In view of sub-section (1) of Section 9, the Corporate Debtor shall, within ten
days from the date of receipt of notice or invoice demanding payment from the
Operational Creditor, make payment or shall issue a notice of dispute under sub-
section (2) of Section 8. In the case on hand, the Corporate Debtor neither made
payment nor issued notice of dispute as required under sub-section (2) of Section
8 of the Code.
11. In these facts, Applicant/Operational Creditor is entitled to file an application
for initiation of corporate insolvency resolution process under Section 9 of the
Code. A perusal of the Petition clearly goes to show that the Operational Creditor
paid the required fee and enclosed the documents with the Application as required
by sub-section (2) and (3) of Section 9 respectively of the Code. In the case on
hand, Operational Creditor did not propose a Resolution Professional to act as an
Interim Resolution Professional as required by sub-section (4) of Section 9 of the

Code. Here, it is pertinent to refer to sub-section (3) of Section 16 of the Code. It
says, in an application for corporate insolvency resolution process filed by an
operational creditor, if there is no proposal for an interim resolution professional
is made, the Adjudicating Authority shall make a reference to the Board, namely
Insolvency and Bankruptcy Board of India, for the recommendation of an insolvency
professional who may act as an interim resolution professional within ten days
from the date of receipt of the reference. Therefore, on the ground that Operational
Creditor did not comply with sub section (4) of Section 9 of the Code, the Petition
cannot be rejected. This Adjudicating Authority shall follow the procedure laid
down under sub-section (3) of Section 16 of the Code, and the Insolvency and
Bankruptcy Board of India shall follow sub-section (4) of Section 16 of the Code.
Therefore, this Adjudicating Authority, by this order passed under sub-section (5)
of Section 9 of the Code, is admitting this Petition. This Adjudicating Authority is
also of the view that it is necessary to make a Reference to the Insolvency and
Bankruptcy Board of India established under the Code to recommend the name
of an Insolvency Professional, against whom no disciplinary proceedings are
pending, to this Adjudicating Authority, within ten (10) days from the date of receipt
of the Reference.
12. No record of dispute is made available to this Adjudicating Authority. The
Applicant has placed on record the Ledger Account of Applicant in the account
books of Corporate Debtor.
13. Section 13 of the Code enjoins upon the Adjudicating Authority to exercise its
discretion to pass an order to declare a moratorium for the purposes referred to
in Section 14, to cause a public announcement of the initiation of corporate
insolvency resolution and call for submission of claims as provided under Section
15 of the Code. Sub-section (2) of Section 13 says that public announcement shall
be made immediately after the appointment of Interim Resolution Professional.
In the case on hand, simultaneous with the admission order, this Adjudicating
Authority is not going to appoint Interim Resolution Professional because the
Applicant did not propose the name of Interim Resolution Professional. But, this
Adjudicating Authority will appoint Interim Resolution Professional after the same
is recommended by the Insolvency and Bankruptcy Board of India under Section
16(4) of the Code.
14. (a) In view of the above discussion, the Petition is admitted.
(b) This Adjudicating Authority hereby order reference to Insolvency and Bankruptcy
Board of India to recommend the name of Insolvency Professional against whom
no disciplinary proceedings are pending to this Authority within 10 (Ten) days
from the date of receipt of reference.
AHMEDABAD BENCH 87
(c) This Adjudicating Authority hereby declares moratorium under Section 13(1)(a)
prohibiting the following as laid down in Section 14 of the Code;
(iii) any action to foreclose, recover or enforce any security interest created by
(d) However, the supply of goods and essential services to the corporate debtor
shall not be terminated or suspended or interrupted during moratorium period.
The moratorium order in respect of (i), (ii), (iii) and (iv) above shall not apply to the
transactions notified by the Central Government.
under sub-section (4) of Section 14. This Adjudicating Authority shall give separate
order for public announcement at the time of appointment of an Interim Resolution
Professional after the proposal is received from the Insolvency and Bankruptcy
Board of India.
17. Communicate a copy of this order to Operational Creditor and Corporate
Debtor. List the matter after receipt of proposal from the Insolvency and Bankruptcy
Board of India.
MEMBER (JUDICIAL)
Pronounced by me in open court on
this the 10th day of April, 2017.
POOJA TEX-PRINTS PVT.LTD.

Name of the Corporate Debtor Pooja Tex-Prints Pvt. Ltd.
Name of Operational Creditor/ Gaurinandan Fashion Pvt. Ltd.

Applicant
Company Petition No. IB/01/NCLT/AHM/2017


1. Gaurinandan Fashion Private Limited (“Operational Creditor” or “OC”)
supplied different types of sarees to Pooja Tex-Prints Private Limited
(“Corporate Debtor” or “CD”) aggregating to Rs. 13,62,000/- in the month of
May, 2015.
2. The CD accepted the goods supplied by OC without any complaint and
received invoices raised by OC for each transaction separately.
3. As per the OC, payment was not made as per the terms and conditions of
the invoices.
4. OC issued statutory notice dated 05.01.2017 under section 8 of the Code
and the same was received by CD on 09.01.2017.
5. Neither reply to the notice has been given by CD nor any payment made
pursuant thereto.
6. The OC filed present application on 15.03.2017.

A. The Bench formulated issues: (i) whether the OC comes within the definition
of ‘operational creditor’, (ii) whether respondent is a ‘corporate debtor’, (iii)
whether claim is an operational debt or not, and (iv) whether requirements
of section 9(1) to 9(4) are satisfied?
B. After considering the definition of ‘operational debt’, operational creditor’,
and the ‘corporate debtor’, the Bench observed that the present application
for initiation of corporate insolvency process deserves to be admitted.
AHMEDABAD BENCH 89
C. The Bench, accordingly, made the following order

ii. Since no insolvency professional was named by OC, the Bench,
Upon communication of proposal for appointment of IRP, the Bench directed that
it would pass separate order for public announcement.

AHMEDABAD BENCH
AHMEDABAD
C.P. (I.B) No. 1/9/NCLT/AHM/2017
Coram:
MEMBER JUDICIAL
Gurinandan Fashion Pvt. Ltd.
V/s.
Pooja Tex-Prints Pvt Ltd.
(CAPITAL LETTERS)
1. Tanya Shah Advocate Applicant
2.
ORDER
Learned Advocate Ms. Tanaya Shah present for Operational Creditor. None present
for Corporate Debtor.
MEMBER (JUDICIAL)
Dated this the 29th day of March, 2017.
AHMEDABAD BENCH 91
BEFORE ADJUDICATING AUTHORITY (NCLT)

AHMEDABAD BENCH
AHMEDABAD
MEMBER (JUDICIAL)
Date: 29th day of March, 2017
In the matter of :
Gaurinandan Fashion Private Ltd.
6410, Hall No. 13, 4th Floor,
Lift No. 16, Raghukal Textile Market,
Ring Road, Surat-395 002
Operational Creditor/ Applicant.
Vs.
Pooja Tex-Prints Private Limited
406, G.I.D.C., Pandesara,
Surat-394221
Corporate Debtor.
Appearance :
Ms. Tanaya Shah, learned Advocate for the Applicant.
Mr. Dhaval K. Shah, learned Advocate for the Corporate Debtor.
FINAL ORDER
Pronounced on 29th day of March, 2017
1. Gaurinandan Fashion Private Limited filed this Petition under Section 9 of The
Insolvency and Bankruptcy Code, 2016 [hereinafter referred to as “the Code”]
read with Rule 6 of The Insolvency and Bankruptcy (Application to Adjudicating
Authority) Rules, 2016 [hereinafter referred to as “the Rules”] and supplied different
types of sarees totalling to Indian Rupees 13,62,000.65 ps. in the month of May,
2015 vide following Invoices :
1. Bill No. 707 dated 04.05.2015 for INR 1,20,520;
2. Bill No.781 dated 08.05.2015 for INR 1,12,700;

8. Bill No.928 dated 21.05.2015 for INR 97,825;
12. Bill No. 1055 dated 29.05.2015 for INR 1,04,275; &
13. Bill No. 1064 dated 30.05.2015 for INR 81,900.
3. Pooja Tex-Prints Pvt.Ltd., [hereinafter referred to as “Corporate Debtor”] accepted
the goods sold and supplied by the Applicant without any complaint and received
the Invoices raised by Applicant for each transaction separately.
4. As per the Terms and Conditions of Invoice payment has not been made by the
Corporate Debtor.
5. Applicant was constrained to address letters dated 10.9.2015; 28.10.2015;
16.12.2015; 11.2.2016; 21.3.2016; 8.8.2016; 14.8.2016; 26.10.2016; 29.11.2016; and
9.12.2016. According to the Applicant, as per Annexure “C” they have calculated
interest at the rate of 2% on the Invoice amounts for the days of delay deliberately
neglecting to pay the same without any justifiable reason.
6. Applicant issued Demand Notice dated 5th January, 2017 in Form No. 3
along with copies of Invoices as per Rule 5 of the Rules, and as required by
Section 8 of the Code. The said Demand Notice was despatched on 7th
January, 2017 and delivered to the Corporate Debtor on 9th January, 2017 at
its Registered Office address. Even after the receipt of the Demand Notice,
Corporate Debtor neither paid the said amount nor gave any reply as called
upon in the notice within a period of 10 days of the receipt of the Demand
Notice along with copies of invoices. Hence Applicant filed this Petition on
15th March, 2017. The objections raised by the Office were complied with on
21.3.2017. This Petition was listed before this Adjudicating Authority on
28.3.2017. Before filing the Petition, Applicant served a notice on this petition
to the Corporate Debtor by Registered Post with Acknowledgment Due on
14th March, 2017.
7. Learned Counsel, Ms. Tanaya Shah present on behalf of the Applicant. Learned
AHMEDABAD BENCH 93
Counsel Mr. Dhaval K. Shah present on behalf of Corporate Debtor, Pooja Tex-
Prints Pvt. Ltd.
8. In order to pass an order under Section 9(5) of the Code, the Adjudicating
Authority shall necessarily give a finding on the following aspects :
(i) Whether the claim is an operational debt or not;
(ii) Whether Applicant comes within the definition of “Operational Creditors”
(iv) The requirements of sub-sections (1) to (4) of Section 9 of the Code read
with Rule 5 and 6 of the Rules 2016 have been followed by the Applicant.
9. (i) Sub-section (21) of Section 5 of the Code defines “Operational Debt” as
under;
“(21) “operational debt” means a claim in respect of the provision of goods or
In the case on hand, the facts disclosed that Applicant supplied sarees to the
Corporate Debtor. Therefore, the claim in respect of cost of sarees supplied by the
Applicant to Corporate Debtor is an 'operational debt’.
(ii) “Operational Creditor” is defined in sub-section 20 of Section 5 of the Code.
“Operational Creditor” means,
“(20) “operational creditor” means a person to whom an operational debt is
or transferred.”
Since the amount due to the Applicant is an 'operational debt’, the Applicant is an
‘operational creditor’.
(iii) “Corporate Debtor” is defined in sub-section (8) of Section 3 of the Code which
reads as follows :
In the present case, Corporate Debtor, namely Pooja Tex-Prints Private Limited is
a Company registered under the Companies Act and it is a “corporate person”
within the meaning of sub-section (7) of Section 3 of the Companies Act. Prima
facie, the facts disclosed that a debt is due from Pooja Tex-Prints Private Limited
to the Applicant. Therefore, Pooja Tex-Prints Private Limited is a “Corporate Debtor”
within the meaning of sub-section (8) of Section 3 of the Code. The dates of
Invoices commence from 4.5.2015 and up to 30.5.2015. Therefore, the operational
debt is within limitation period.
“Operational Creditor” is required to deliver a Demand Notice along with copies
of Invoices to the “Corporate Debtor”. In the case on hand, ‘Operational Creditor’

complied with the said requirement.
(iv) In view of sub-section (1) of Section 9, the Corporate Debtor shall, within ten
days from the date of receipt of notice or invoice demanding payment from the
Operational Creditor, make payment or shall issue a notice of dispute under sub-
section (2) of Section 8. In the case on hand, the Corporate Debtor neither made
payment nor issued notice of dispute as required under sub-section (2) of Section
8 of the Code.
10. In these facts, Applicant/Operational Creditor is entitled to file an application
for initiation of corporate insolvency resolution process under Section 9 of the
Code. A perusal of the Petition clearly goes to show that the Operational Creditor
paid the required fee and enclosed the documents with the Application as
required by sub-sections (2) and (3) of Section 9 respectively of the Code. In the
case on hand, Operational Creditor did not propose a Resolution Professional
to act as an Interim Resolution Professional as required by sub-section is no
proposal for an interim resolution professional is made, the Adjudicating
Authority shall make a reference to the Board, namely Insolvency and Bankruptcy
Board of India, for the recommendation of an insolvency professional who may
act as an interim resolution professional within ten days from the date of the
reference. Therefore, on the ground that Operational Creditor did not comply
with sub-section (4) of Section 9 of the Code, the Petition cannot be rejected.
This Adjudicating Authority shall follow the procedure laid down under sub-
section (3) of Section 16 of the Code, and the Insolvency and Bankruptcy Board
of India shall follow sub-section (4) of Section 16 of the Code. Therefore, this
Adjudicating Authority, by this order passed under sub-section (5) of Section 9
of the Code, is admitting this Petition. This Adjudicating Authority is also of the
view that it is necessary to make a Reference to the Insolvency and Bankruptcy
Board of India established under the Code to recommend the name of an
Insolvency Professional, against whom no disciplinary proceedings are pending,
to this Adjudicating Authority, within ten (10) days from the date of receipt of the
Reference.
11. The learned Counsel appearing for the Corporate Debtor stated that the
Company is in financial crunch and it is unable to make payment to the Operational
Creditor. It is not even the case of the Corporate Debtor that payment has been
made or that notice of dispute has been issued to the Operational Creditor. No
record of dispute is made available to this Adjudicating Authority. The Operational
Creditor placed on record the Bank’s statements of its accounts.
12. Section 13 of the Code enjoins upon the Adjudicating Authority to exercise
AHMEDABAD BENCH 95
discretion to pass an order to declare a moratorium for the purposes referred

to in Section 14, to cause a Interim Resolution Professional. In the case on
hand, simultaneous with the admission order, this Adjudicating Authority is
not going to appoint Interim Resolution Professional because the Applicant
did not propose the name of Interim Resolution Professional. But, this
Adjudicating Authority will appoint Interim Resolution Professional after the
same is recommended by the Insolvency and Bankruptcy Board of India under
Section 16(4) of the Code.
13. (a) In view of the above discussion, the Petition is admitted.
(b) This Adjudicating Authority hereby order reference to Insolvency and Bankruptcy
Board of India to recommend the name of Insolvency Professional against whom
no disciplinary proceedings are pending to this Authority within 10 (Ten) days
from the date of receipt of reference.
(c) This Adjudicating Authority hereby declares moratorium under Section 13(1)(a)
prohibiting the following as laid down in Section 14 of the Code :
(iii) any action to foreclose, recover or enforce any security and Enforcement
(d) However, the supply of goods and essential services to the corporate debtor
shall not be terminated or suspended or interrupted during moratorium period.
The moratorium order in respect of (i), (ii), (iii) and (iv) above shall not apply to the
transactions notified by the Central Government.
under sub-section (4) of Section 14. This Adjudicating Authority shall give separate
order for public announcement at the time of appointment of an Interim Resolution
Professional after the proposal is received from the Insolvency and Bankruptcy
Board of India.
16. Communicate copy of this order to Operational Creditor and Corporate Debtor.
ADJUDICATION AUTHORITY
MEMBER JUDICIAL
Pronounced by me in open court on this the 29th day of March, 2017.
ALLAHABAD BENCH 97
ALLAHABAD BENCH
98
ALLAHABAD BENCH 99
RAMAN ISPAT PVT. LTD.

Name of the Corporate Debtor/ M/s Raman Ispat Pvt. Ltd.
Applicant
Company Petition No. C.P.(IB) No.23/ALD/2017
Bench NCLT, Allahabad bench, Allahabad

Amount involved Rs. 948 lacs

1. M/s Raman Ispat Private Limited (“Corporate Debtor” or “CD”) filed the
present application for initiating insolvency proceedings against itself on
the ground that a debt of Rs. 7.50 lacs had been raised by it from Union
Bank of India (UBI) but the CD could not pay it and thus, there is default of
amount of Rs. 948 lacs (inclusive of interest). [Check the amounts marked
in red]
2. It was stated that in order to avail loan facilities, CD had executed necessary
security documents in favour of UBI. However, the loan account of CD
became irregular since 31.08.2015 because of non-payment by CD.
3. A demand notice dated 14.09.2015 was issued by UBI asking the CD to
make the payment.
4. A communication dated 28.09.2015 was also issued by UBI intimating
initiation of proceedings against CD under SARFAESI Act wherein statutory
notice under section 13(2) of the Act was issued to CD to enforce its
securities interest.
5. In the meanwhile, CD also filed a reference before BIFR on 26.08.2015.
Later on, due to dissolution of BIFR/AIFR, the proceedings before BIFR abated
and CD filed the present reference. .

A. The Bench considered the documents filed by CD. It noted that the Balance
Sheets filed by CD disclosed that liabilities of CD are more than its assets.
B. In view of the above, the Bench admitted the application and passed the
following order:
i. Appointed Mr. Praveen Bansal as an Interim Resolution Professional.

Code. However, supply of essential goods and services shall not be
terminated during moratorium period.
IRP was directed to cause a public announcement immediately as contemplated
under section 13 read with section 15 of the Code.
ALLAHABAD BENCH 101

ALLAHABAD BENCH, ALLAHABAD
(In Company Petition (IB) No. 23/AId/2017 )
Dated Tuesday, the 11th Day of April, 2017
Quorum: Mr. H. P. Chaturvedi, Member-Judicial
IN THE MATTER UNDER SECTION 10 OF THE INSOLVENCY AND BANKRUPTCY CODE,
2016 READ WITH RULE 7 OF THE INSOLVENCY AND BANKRUPTCY (APPLICATION
TO ADJUDICATING AUTHORITY) RULES, 2016
AND
M/s Raman ISPAT PVT. LTD.
....Corporate Applicant/Debtor
Claim: (a) To admit the Company Petition No. 24/Ald/2017; and pass an order for
initiating Corporate Insolvency Resolution Process u/s 10 of The Insolvency and
Bankruptcy Code, 2016
(b) To cause a public announcement of the initiation of Corporate Insolvency
Resolution Process.
(c) To declare moratorium in the terms of Section 14 of the Code
(d) Pass any such further order(s)/ which the Tribunal deems fit and proper in the
facts and circumstances of the case.
Applicant’s Counsel : CA Ms. Ritu Rastogi
ORDER
(Per Mr. H.P. Chaturvedi, Member-Judicial)
The present Application is filed on behalf of the Corporate Applicant/Corporate

Debtor under Section 10 of Insolvency and Bankruptcy Code, 2016 read with Rule
7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules,
2016.
The Corporate Applicant / Debtor has stated that a debt of 7.50 lacs has been
raised by it (i.e. Raman Ispat) from the Union Bank of India but such could not be
paid . Thus there is default of amount of 948 lacs (inclusive of interest). It is also
informed that a demand notice was issued by the Union Bank of India to the
Corporate Applicant vide its notice dated 14.09.2015 and by calling upon the
notice to make payment of Rs.500 lacs; Rs.250 lacs towards L.C. and further Rs.
10 lacs towards audit limit, other loan facilities availed by the Corporate Debtor.
The Bank in its notice has stated that the borrower /Corporate Debtor has executed
necessary security document in favour of the Bank by creating mortgage of assets
charges were registered with Registrar of Companies. However, above mentioned
loan accounts became irregular since 31st August, 2015 because the Corporate
Debtor did not deposit any amount towards its loan liability.
The Bank there fore has alleged that such conduct of the borrower tantamount to
breach of trust of its loan liabilities.
The corporate Debtor/ applicant enclosed a communication dated 28.09.2015
received from the Authorised officer of Union Bank Of India intimating the initiation
of the proceeding under SARFASEI Act, 2002 wherein a statutory notice under
Section 13(2) of the Act was issued to the Corporate Debtor enforce its securities
interest, such notice states that if Corporate Debtor fails to make payment of its
dues within stipulated period then bank would excise all its right under the act by
making sale of the secured assets and will realise the debt amount from the sale
proceeds.
Pursuant thereto the bank proceeded further by taking statutory action to take
possession of the secured assets and by fixing appointed date 08.12.2015 and
14.12.2016 for such purpose authorised officer of the Bank has issued possession
notice under the SARAFESI Act for taking possession of the Scheduled Property as
security given to the Bank.
In view of the above stated facts and circumstances, the Corporate Applicant has
prayed for the triggering the process of Insolvency Resolution Process and to
appoint Interim Resolution Professional. It is also matter of record that Corporate
Applicant/ Debtor had also filed reference on 26.08.2015 before Board for Industrial
& Financial Reconstruction under the relevant provisions of Sick Industrial
Companies (Special Provisions) Act, 1985. Later on being subsequent development
took place due to statutory change after enactment of Insolvency & Bankruptcy
Code, 2016 the proceeding before BIFR stood abated, hence, the Corporate
Applicant has submitted present Application.
We examine the contents of application and perused the document on record. It
is matter of record that during the Filing of present application, registry of this
Bench pointed out some defects to be cured in the present Company Petition.
Therefore, having heard the Learned Chartered Accountant for the corporate
applicant this tribunal communicated to Corporate Applicant on 30 March, 2017
in response thereto Corporate applicant has removed such defect on 5th April,
2017 and thereafter the matter was taken up on 10 April for hearing and the order
was reserved for today.
The corporate debtor has submitted a written communication from the proposed
ALLAHABAD BENCH 103
interim resolution professional stating that he agrees to accept the appointment

and also declared that there are no disciplinary proceedings pending against
him.
The Corporate Applicant in support of the application has also filed Balance
Sheets which discloses that liabilities of the company are more than assets.
In view of the above stated factual and legal position of the case we find that the
corporate debtor has complied with provision of Section 10 of the Code, for
declaration of moratorium under section 14 of the Code, which is reproduced as
below:
Section 14 Moratorium
(1) Subject to provisions of sub-sections (2) and (3), on the insolvency
against the corporate debtor including execution of any judgment,
decree or order in any court of law, tribunal, arbitration panel or
other authority;
(c) any action to foreclose, recover or enforce any security interest
created by the corporate debtor in respect of its property including
any action under the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002;
(d) the recovery of any property by an owner or lessor where such
property is occupied by or in the possession of the corporate debtor.
(2) The supply of essential goods or services to the corporate debtor as may
be specified shall not be terminated or suspended or interrupted during
moratorium period.
(3) The provisions of sub-section (1) shall not apply to such transactions as
may be notified by the Central Government in consultation with any
financial sector regulator.
(4) The order of moratorium shall have effect from the date of such order till
the completion of the corporate insolvency resolution process:
process period, if the Adjudicating Authority approves the resolution plan
under sub-section (1) of section 31 or passes an order for liquidation of
corporate debtor under section 33, the moratorium shall cease to have
effect from the date of such approval or liquidation order, as the case may
be.
In the light of above discussion, the Petition deserved to be allowed.
Hence, we admit the petition for declaring Moratorium with
Consequential Directions given as under:
1. That the order of moratorium u/s 14 shall have effect from 17.03.2017 till
the completion of corporate insolvency resolution process or until this
Bench approves the resolution plan under sub-section (1) of Section 31 or
passes an order for liquidation of corporate debtor under section 33 as,
the case may be.
2. That the Bench hereby prohibits the institution of suits or continuation of
pending suit or proceedings against the corporate debtor including
execution of any judgement, decree or order in any court of law, tribunal,
arbitration panel or other authority; transferring, encumbering, alienating
or disposing of by the corporate debtor any of its assets or any legal right
or beneficial interest therein; any action to foreclose, recover or enforce
any security interest created by the Corporate Debtor in respect of its
property including any action under the SARFESI Act, 2002; the recovery of
any property by an owner or lessor where such property is occupied by or
in the possession of the corporate debtor.
3. That the supply of essential goods or services to corporate debtor, if
continuing, shall not be terminated or suspended or interrupted during
the Moratorium period.
4. That the provisions of Section 14 of sub- section (1) shall not apply to such
transactions as may be notified by the Centred Government in consultation
with any financial sector regulator.
5. That this Bench hereby appoints Mr. Praveen Bansal, Email.Id
pkbansa1100@gmail.com, Registration No. IBBI/IPA-001/IP-00164/
2016-17/1179, Address : J- 347, Sarita Vihar, New Delhi -110076 as
Interim Resolution Professional to carry the functions as mentioned
under Insolvency and Bankruptcy Code.
6. That the public announcement of corporate insolvency resolution process
be made immediately as specified under Section 13 of the code and calling
for submissions of claim under Section 15 of the Code.
Notwithstanding above it is further made clear that this order or, admission of
present application is delayed and could not be passed within period prescribed
ALLAHABAD BENCH 105
in the Insolvency & Bankruptcy Code, 2016. That apart the issue relating to
Jurisdiction of this Tribunal to pronounce an order on admission after elapse of
the period prescribed in the Code, is already subjudice before Hon’ble National
Company Law Appellate Tribunal in another matter, therefore this order of admitting
the present petition is subject to the legal position as settled by Hon’ble NCLAT. At
this stage this Tribunal declares that the petition is maintainable but the admission
is subject to final outcome of pending appeal before the Hon’ble NCLAT.
An authentic copy of this order be issued to parties including Interim Resolution
Professional after the completion of necessary formalities.
With the above stated observation the present Application is admitted and
accordingly stand disposed of.
H.P. CHATURVEDI
MEMBER (JUDICIAL)
Dated 11 April, 2017
JEKPL PRIVATE LIMITED

Name of the Corporate Debtor/ JEKPL Private Limited
Applicant
Company Petition No. 24/Ald/2017
Bench NCLT, Allahabad Bench, Allahabad

Amount involved Rs. 104 crores
Status of Application Allowed

1. A Production Sharing Contract was executed on 16.06.1995 by and
between the Government of India, Oil India Limited with 40% participating
interest, Geopetrol International Inc. with 25% participating interest, Enpro
India Limited with 25% participating interest and Geo Enpro Petroleum
Limited with 10% participating interest in Contract Area i.e. Kharsang Field
for exploration and production of petroleum and related products.
2. Enpro India Limited assigned its entire 25% participating interest to its affiliate
company “Enpro Commercials Private Limited”. Since 2006, Enpro
Commercials Private Limited came to be named as Jubilant Energy (Kharsang)
Pvt. Ltd. and thereafter, its name changed to JEKPL Private Ltd. (“Corporate
Debtor” or “CD”) vide fresh certificate of incorporation dated 02.03.2017.
3. CD had obtained financial assistance of Rs. 200 Crores from State Bank of
India and Rs. 525 Crores from Central Bank of India and had also created
a charge over its assets by way of Loan Agreement dated 09.06.2009 and
13.10.2010 executed with State Bank of India and Central Bank of India
respectively. Apart from the above, there was another loan facility of USD
50 million provided by EXIM bank to Jubilant Energy BV (JEBV) by way of
Dollar Loan Agreement.
4. Later on, Central Bank of India and SBI classified the CD as NPA and
demanded their dues. SBI claimed an amount of Rs. 104 Crores being
amount outstanding.
5. CD stated that it lost 7 years (of 20 initial years of Contract Period) on
account of delay in receipt of Statutory and Regulatory approvals. Further,
the production from Contract Area was on a natural decline after achieving
peak production in August, 2012. Thus, the CD stated that he was in a
ALLAHABAD BENCH 107
serious financial distress to handle the operational difficulties and was

not able to pay debts.

A. The Bench, after considering the documents, inter alia, copies of audited
financial states for FYs ended 31.03.2015, 31.03.2016 and provisional
financial statement as on 28.02.2017, and taking note of Section 10 of the
Code was of the opinion that the CD had complied with the requirements
of section 10 and therefore admitted the application.
B. The Bench passed following orders
i. Declared Moratorium under Section 14 of the Code
ii. Appointed Mr. Dinkar T. Venkatasubramanian, as Interim Resolution
Professional
iii. Caused Public Announcement of Corporate Insolvency Resolution
Process under Section 13 of the Code.

(In Company Petition No. 24/Ald/2017)
Dated Friday, the 17th Day of March, 2017
Quorum: Mr. H. P. Chaturvedi, Member-Judicial
IN THE MATTER UNDER SECTION 10 OF THE INSOLVENCY AND BANKRUPTY CODE,
2016 READ WITH RULE 7 OF THE INSOLVENCY AND BANKRUPTY (APPLICATION TO
ADJUDICATING AUTHORITY) RULES, 2016
AND
JEKPL PRIVATE LIMITED
PLOT No. 15, KNOWLEDGE PARK II
GREATOR NOIDA- 201306
GAUTAM BUDDH NAGAR
UTTAR PRADESH
.............. Corporate Applicant/Debtor
initiating Corporate Insolvency Resolution Process u/s 10 of The Insolvency And
Bankrupty Code, 2016’.
Resolution Process.
(c) To declare moratorium in the terms of Section 14 of the Code-
(d) Pass any such further order(s)/ which the Tribunal deems fit and proper in the
Applicants Counsel : Shri Navin Sinha, Senior Advocate along with Ms. Anindita
Roy Chowdhury and Shri Rahul Agarwal
ORDER
(Per Mr. H. P. Chaturvedi, Member-Judicial)
1. The present Application is filed on behalf of the Corporate Applicant/ Corporate

2016. The definition of Corporate Applicant includes Corporate Debtor as per
Section 5(5) of the Code. Therefore the Company Petitioner seeks relief to initiate
Corporate Insolvency Resolution Process in respect of JEKPL Private Limited.
ALLAHABAD BENCH 109
2. It is stated that the Government of India, Oil India Limited with participating
interest 40%, Geopetrol International Inc. with participating interest 25%, Enpro
India Limited with participating interest 25% and Geo Enpro Petroleum Limited
with participating interest 10% in the Contract Area executed a Production Sharing
Contract on 16.06.1995 to explore and produce petroleum and related products
from the Contract Area i.e. Kharsang Field.
3. Subsequently, the Enpro’s name was changed from Enpro India Limited to
Jubilant Enpro Limited w.e.f. 15.10.2001 .Thereafter, Enpro assigned its entire 25%
participating interest to its affiliate company "Enpro Commercials Private Limited",
w.e.f 16.10.2006 vide amendment in PSC. Name of "Enpro Commercial Private
Limited", subsequently was changed to "Jubilant Energy (Kharsang) Private Limited"
and thereafter, the name of this Company was again changed to "JEKPL Private
Limited" vide a fresh certificate of Incorporation dt. 02.03.2017 i.e. Corporate
Debtor.
4. The corporate debtor obtained financial assistance from various financial
institutions, the details as disclosed in the application are described as below:
Sr. No. Name of Bank Rupees In Crores
01. State Bank of India 200.00/-
02. Central Bank of India 200.00/-
03. Central Bank of India 325.00/-

5. The Debtor Company also created charge over the assets of the Company in
favor of the above mentioned financial institutions and said charges were duly
registered with the Registrar of Companies, Kanpur .The Company has enclosed
a copy of the Facility Agreement dated 09.06.2009 containing the terms and
conditions imposed by the State Bank of India and the Central Bank of India while
sanctioning/extending the credit facilities amounting to Rs. 400 crores. Further,
the Company has also enclosed the Loan Agreement dated 13.10.2010 containing
the terms and conditions imposed by the Central Bank of India while sanctioning/
extending the credit facilities amounting to Rs. 325 crores.
6. The Central Bank of India later on addressed a letter dt. 24.01.2017 to the
Corporate debtor stating that the account of the Corporate debtor has been
classified as Non-Performing Asset on 01st May, 2016 and accordingly advised it
to regularize their accounts. Further, the State Bank of India addressed a letter dt.
27.01.2017 calling upon the Corporate Debtor to pay an amount of Rs.
104,46,00,351.59/- being the amount outstanding in respect of facilities sanctioned
by the State Bank of India.
7. It is also pleaded that the Corporate Debtor raised funds amounting to approx.
Rs. 400 Crores by the way of various instruments from its sponsor to its group of
companies to repay their borrowing to Corporate Debtor. The above fund were
also utilized by the Corporate Debtor to pay various cash calls raised by Geo
Enpro, who is an operator in terms of Production Sharing Contract .
8. It is further stated that the Corporate Debtor Company has provided various
security documents to secure the loan facility of USD 50 million provided by EXIM
Bank to Jubilant Energy BV (JEBV) formerly known as Jubilant Energy NV, vide
Dollar Loan Agreement dated 01.08.2011 and loan facility of USD 45 million
provided by the Exim Bank to Jubliant Energy (Holding) BV (JEHBV) vide Dollar
Loan Agreement dated 09.01.2014.
9. It is submitted that at the time of execution of Production Sharing Contract,
production from Contract Area stood around 280 barrel of oil per day by drilling
new wells and implementing production enhancement techniques in the Contract
Area. However, after achieving the peak production in August 2012, the Contract
Area has been on a natural decline to current level of ~ 1000 BOPD. However, the
Corporate Debtor lost almost to 7 years (of 20 initial year Contract period) on
account of delay in receipt of Statutory and Regulatory approvals such as mining
lease and forest clearance which resulted in less barrels being produced for no
fault of Corporate Debtor. Also, the deferred barrels as well as new barrels will
now be taxed by Government at much higher rates of royalty and cess and
higher Government share of profit Petroleum under new extension policy
announced by Government.
10. Therefore, Corporate Applicant / Corporate Debtor has stated that it is now in
serious financial distress to handle the operational difficulties as mentioned in
preceding paragraphs of the Petition and which is beyond its control and
Corporate Debtor is not able to pay its debts.
Consequently, the account of Corporate Applicant has been classified as Non-
Performing Assets by the Bank.
11. The Corporate Debtor has also submitted that it does not have necessary
Financial Reserve to repay the debts owed by it. Although it made attempts for
Restructuring of its Petroleum Operation in consultation with its Financial lenders
but it yielded not much result regarding production feasibility of the project and
further decline in oil and gas pricing hence the Corporate Debtor will continue to
suffer severe financial stress.
12. The Corporate Debtor has annexed the Copies of audited financial statements
for Financial Year ended 31.03.2015, 31.03.2016 and provisional financial
statement as on 28.02.2017, list of assets and liabilities as on 28.02.2017 divided
ALLAHABAD BENCH 111
in to such categories as are appropriate for easy identification with estimated

values assigned to each category, names and address of the financial creditors
and operational creditors with amount outstanding and particulars of securities
were also given by the Corporate Debtor. Further, particulars of debt owed by or to
the corporate debtor to or by the persons connected with it, details of guaranties,
name and address of the members of the corporate debtor with details of their
shareholding were also disclosed.
13. Thus, in light of above, stated facts and circumstances the Corporate Applicant/
Debtor now has resolved to file present application for initiation of Corporate
Insolvency Resolution Process as prescribed in the Insolvency Code, 2016 since
amount of default is in excess of Rs. 1,00,000/- (Rupees One Lac only).
14. The corporate debtor submitted the written communication from the proposed
interim resolution professional that he agrees to accept the appointment and
also stated that there are no disciplinary proceedings pending against him.
15. The Applicant has also filed Balance Sheets which discloses liabilities are
more than assets.
16. We have gone through the contents of the Petition and by perusing the
documents enclosed therewith in Volume 1 to Volume 6 of the Petition.
We have also heard the submission of Senior Advocate Shri Navin Sinha Learned
Counsel for Applicant in respect of grant of relief to initiate Corporate Insolvency
Resolution Process to the Corporate Applicant/Debtor. We also examined the
relevant section of Insolvency and Bankruptcy Code, 2016. A plain reading of
Section 10 reads as under :
Section 10 : Initiation of corporate insolvency resolution process by corporate
applicant :
may be prescribed.
Authority.
17. In view of the above stated factual and legal position of the case we find that
the corporate debtor has complied with provision of Section 10 of the Code and
application declaring moratorium under section 14 of the Code, which is
reproduced as below:
Section 14. Moratorium
moratorium period.
(3) The provisions of sub-section (1) shall not apply to such transactions as may be
notified by the Central Government in consultation with any financial sector regulator.
ALLAHABAD BENCH 113
18. Thus, we admit the petition for declaring Moratorium with Consequential
Directions given as under :
I. That the order of moratorium u/s 14 shall have effect from 17.03.2017 till
the case may be.
II. That the Bench hereby prohibits the institution of suits or continuation of
arbitration panel or other authority ; transferring, encumbering, alienating
or beneficial interest therein ; any action to foreclose, recover or enforce
III. That the supply of essential goods or services to corporate debtor, if
IV. That the provisions of Section 14 of sub -section (1) shall not apply to such
transactions as may be notified by the Central Government in consultation
V. That this Bench hereby appoints Mr. Dinkar T. Venkatasubramanian,
Email.Id dinkar.venkatasubbramanian, Registration No. IBBI/IPA-001/IP-
P00003/2016-17/10011, Address : Ernst & Young LLP, 6th Floor, World
Mark -1, IGI Airport Hospitality District, Aerocity, New Delhi -110037 as
Interim Resolution Professional to carry the functions as mentioned under
Insolvency and Bankruptcy Code.
VI. That the public announcement of corporate insolvency resolution process

VII. An authentic copy of this order be issued to parties including Interim
Resolution Professional after the completion of necessary formalities.
In view of the above, the Application is admitted and accordingly stand disposed
of.
H.P. Chaturvedi
Member (Judicial)
Dated 17th March, 2017
ALLAHABAD BENCH 115
JODPL PRIVATE LIMITED

Name of the Corporate Debtor/ JODPL Private Limited
Applicant
Company Petition No. 25/Ald/2017
Bench NCLT, Allahabad Bench, Allahabad


1. JODPL Private Limited was incorporated on 12.03.2004 in the name of
Jubilant Offshore Drilling Pvt. Ltd. and subsequently changed to JODPL Pvt.
Ltd. (“Corporate Debtor” or “CD”) vide certificate of name change dated
02.03.2017
2. On 04.02.2003, a Production Sharing Contract was executed by and
between Govt. Of India, Gujarat State Petroleum Corporation Ltd. (GSPC)
with 80% participating interest, Jubilant Empro Limited (JEL) with 10%
participating interest, Geo Global Resources (India) Inc (GGR) with 10%
participating interest in the Contract Area to explore and produce
petroleum and related products.
3. On 04.01.2005, JEL executed a Deed of Assignment and Assumption in
favour of the CD and transferred its 10% participating interest together with
rights, interest and obligations pertaining thereto to CD.
4. CD obtained financial facilities from various banks/Financial Institutions
i.e. State Bank of India, Allahabad Bank, Bank of Baroda, Bank of India etc.
5. The loans obtained by CD were declared as NPA by various banks on
different dates.
6. As per the CD, it had defaulted in making payment of around Rs. 1332.5
crores of principal borrowing. According to CD, the default is caused due
to cost and time overruns with regard to Petroleum operations of Contract
Area and due to various difficulties related to operations, gas prices. The
CD is in serious financial distress to meet its payment obligations.

A. The Bench, after considering the documents and taking note of section 10
of the Code was of the opinion that the CD had complied with the
requirements of section 10 and admitted the application.
B. The Bench passed the following orders:-
i. Declared Moratorium under section 14 of the Code
ii. Appointed Mr. Dinkar T. Venkatasubramanian, as Interim Resolution
Professional
iii. Caused public announcement of Corporate Insolvency Resolution
Process under section 13 of the Code.
ALLAHABAD BENCH 117

(In Company Petition No. 25/Ald/2017 )
Dated Friday, the 17th Day of March, 2017
Quorum: Mr. H.P. Chaturvedi, Member (Judicial)
IN THE MATTER UNDER SECTION 10 OF THE INSOLVENCY AND BANKRUPTY CODE,
2016 READ WITH RULE 7 OF THE INSOLVENCY AND BANKRUPTY (APPLICATION TO
ADJUDICATING AUTHORITY) RULES, 2016
AND
JODPL PRIVATE LIMITED
PLOT No. 15, KNOWLEDGE PARK II
GREATOR NOIDA- 201306
GAUTAM BUDDH NAGAR
UTTAR PRADESH
........... Corporate Applicant/Debtor
initiating Corporate Insolvency Resolution Process u/s 10 of ‘The Insolvency and
Bankruptcy Code, 2016*
Resolution Process.
(c) To declare moratorium in the terms of Section 14 of the Code.
(d) Pass any such further order(s) / which the Tribunal deems fit and proper in the
Applicant’s Counsel : Shri Navin Sinha, Senior Advocate along with Advocate
Shri Rahul Agarwal, Advocate Ms. Anindita Roy Chowdhury
ORDER
(Per Mr. H.P. Chaturvedi Member-Judicial)
1. The present Petition is filed on behalf of the Corporate Applicant/Corporate

2016. The definition of Corporate Applicant includes Corporate Debtor as per
Section 5(5) of the Code. Therefore, the Company Petitioner seeks relief to initiate
Corporate Insolvency Resolution Process in respect of JODPL Private Limited.
2. The Government of India (GOI), Gujarat State Petroleum Corporation Limited

(GSPC) with participating interest 80%, Jubilant Enpro Limited (“JEL”) with
participating interest 10 % and Geo Global Resources (India) Inc (‘GGR’) with
participating interest 10% in the Contract Area executed a Production Sharing
Contract on 04.02.2003 to explore and produce petroleum and related products
from the Contract Area i.e. KG-OSN-2001/3.
3. The Corporate Debtor was incorporated on 12.03.2004 in the name of Jubilant
Offshore Drilling Private Limited subsequently changed to JODPL Private Limited
vide a certificate of name change dated 02.03.2017 issued by Registrar of
Companies, Kanpur, Uttar Pradesh. On 04.01.2005. A Deed of Assignment and
Assumption was executed between Jubilant Enpro Pvt. Ltd. (formerly JEL) and the
Corporate Debtor. By the way of Assignment Deed Jubilant Enpro Pvt. Ltd.
transferred and assigned its 10% Participating Interest in the Contract Area under
Production Sharing Contract, together with all rights, interests and obligations
pertaining thereto to the Corporate Debtor.
4. The said Corporate Debtor obtained financial facilities, inter alia, from various
financial banks/ financial institutions i.e. State Bank of India, Allahabad bank,
Bank of Baroda, Bank of India, Corporation Bank, Export Import Bank of India,
Indian Bank, Punjab National Bank, State Bank of Patiala, United Bank of India.
5. The Corporate Debtor has submitted that it has defaulted in making payment
of around 1332.5 Crores of the principal borrowing remain outstanding towards
the banks, which in excess of Rs. 1,00,000/- (Rs. 1 lac) eligibility for initiation for
the Corporate Insolvency Resolution Process as provided in the Insolvency and
Bankruptcy Code, 2016.
6. As per the Corporate Debtor such default is caused due to Cost and time
overruns with regard to Petroleum operations of the Contract Area and due to
various difficulties related to operations, gas prices the Corporate Debtor is
presently in serious financial distress thereby causing default on its payment
obligations to the Financial Lenders.
7. Thereafter, the banks/financial institutions started declaring the corporate debtor
as a Non Performing Asset Account (NPA) on various dates. The Corporate Debtor's,
account was declared an NPA by the State Bank of India on 31.03.2016, by Punjab
National Bank on 31.03.2016, by Export and Import Bank of India on 28.04.2016,
by the Corporation Bank on 31.05.2016 by the Bank of India on 30.06.2016 and by
the Allahabad Bank on September 2016. Notices of recall/ demand have been
received from JODPL from State Bank of India on 19.08.2016, Export and Import
Bank of India on 23.11.2016, Corporation Bank on 08.11.2016, United Bank of India
on 28.09.2016 and the Punjab National Bank on 30.09.2016 respectively. In addition
ALLAHABAD BENCH 119
to above Legal notices have been issued by State Bank of India on 24.09.2016,
Bank of India on 08.11.2016, Punjab National Bank on 11.11.2016, State Bank of
Patiala on 07.11.2016, United Bank of India on 07.11.2016, State Bank of Bikaner
and Jaipur on 17.11.2016. Punjab National Bank has issued a demand notice to
the corporate debtor on 14.02.2017. Thus, the banks in their Joint Lender’s forum
(JLF) meeting also resolved to recall all loans from the Corporate Debtor.
8. It is further submitted by the corporate Applicant/Debtor in their Petition that in
spite of doing its utmost towards fulfilling its obligations qua the Production Sharing
Contract, including the infusion of funds into project by the way of the Corporate
Debtor’s sponsors, the operational difficulties plaguing the Contract Area. The
disputed cash calls with operator, the declaration of Non- Performing Assets with
regard to the Financial facilities availed by Corporate Debtor has made extremely
difficult for Corporate Debtor to continue its operations and Corporate Debtor
does not have the necessary financial reserves to re-pay its debts. In support of
its contention the Applicant has filed Balance Sheets which discloses liabilities
are more than assets.
9. Further, the Corporate Applicant/Debtor submitted the written communication
received from the proposed Interim Resolution Professional whereby he has
agreed to accept such appointment as Interim Resolution Professional. It is stated
that there are no disciplinary proceedings pending against him.
10. We have gone through the contents of the Petition and perused the documents
enclosed therewith.
We have also heard the submission of Senior Advocate Shri Navin Sinha Learned
Counsel for Applicant in respect of grant of relief to initiate Corporate Insolvency
Resolution Process to the Corporate Applicant/Debtor. We also examined the
relevant sections of Insolvency and Bankruptcy Code, 2016. A plain reading of
Section 10 reads as under:
Section 10 : Initiation of corporate insolvency resolution process by corporate
applicant :
such particulars and in such manner and accompanied with such fee as may
be prescribed.
(a) its books of account and such other documents relating to such period as
may be specified; and
Provided that Adjudicating Authority shall, before rejecting an application, give
a notice to the applicant to rectify the defects in his application within seven
days from the date of receipt of such notice from the Adjudicating Authority.
Further the Provision of Section 14 reads as under :
Section 14 : Moratorium
moratorium period.
ALLAHABAD BENCH 121
completion of the corporate insolvency resolution process :
11. In view of the above stated factual and legal position of the case we find
that the corporate debtor has complied with requirement of Section 10 of the
Code. Therefore, the present Application deserved to be allowed hence is
allowed.
We admit the petition for declaring Moratorium with Consequential Directions
which are given as under :
I. That the order of moratorium u/s 14 shall have effect from 17.03.2017 till
Bench approves the resolution plan under subsection (1) of Section 31 or
the case may be.
II. That the Bench hereby prohibits the institution of suits or continuation of
arbitration panel or other authority ; transferring, encumbering, alienating
or beneficial interest therein ; any action to foreclose, recover or enforce
III. That the supply of essential goods or services to corporate debtor, if
IV. That the provisions of Section 14 of sub-section (1) shall not apply to such
V. That this Bench hereby appoints Mr. Dinkar T. Venkatasubramanian,
Email.Id dinkar.venkatasubbramanian, Registration No. IBBT/IPA-001/IP-
P00003/2016-17/10011, Address : Ernst & Young LLP, 6th Floor, World Mark
-1, IGI Airport Hospitality District, Aerocity, New Delhi -110037 as Interim
Resolution Professional to carry the functions as mentioned under

Insolvency and Bankruptcy Code.
VI. That the public announcement of corporate insolvency resolution process
VII. An authentic copy of this order be issued to parties including Interim
Resolution Professional after the completion of necessary formalities.
In view of the above, the Application is admitted and accordingly stand disposed
of.
H.P. Chaturvedi
Member (Judicial)
Dated 17th March, 2017
BENGALURU BENCH 123
BENGALURU BENCH
124
BENGALURU BENCH 125
24X7 LEARNING PRIVATE LIMITED

Name of the Corporate Debtor 24x7 Learning Private Limited
Company Petition No. CP(IB)/13/BB/17

Bench NCLT, Bengaluru Bench

Brief facts of the Case

1. 24X7 Learning Private Limited (“Corporate Debtor” or “CD”) filed the present
application under section 10 of the Code on the ground that it had failed to
repay its debt and had been in default.
2. The CD was incorporated on 20.08.2014.
3. In the application, CD provided details of financial and operational creditors
a perusal of which showed that CD is in default for more than 7 years. The
total sum due to Financial Creditors is Rs. 2,16,02,565/- and operational
creditors is Rs. 7,99,18,485/-. CD further disclosed details of security
against which the loan is fully or partially secured along with details.
4. CD also provided copies of audited financial statements for the year 2014-15
and 2015-16, provisional financial statements as on 22.03.2017, list of assets
and liabilities as on 22.03.2017, details of financial and operational creditors.
Grounds of Admission and details of the Order
A. The Bench, during the hearing, issued notice to creditor National Skill
Development Corporation (NSDC) and 2 other large creditors Liquid
Elearning Services Pvt. Ltd., Noida and Deloitte Haskins & Sells, Deloitte,
Anchorage II, Bangalore. However, none appeared for them.
B. The Bench, considering the documents on record, admitted the application
and passed following directions:
i. Appointed Mr. Ramesh Kumar Bhat as Interim Resolution
Professional
ii. Declared moratorium as per the provisions of Section 14 of the Code,
however, the supply of essential goods or services to CD shall not
be terminated or suspended.
iii. Directed the IRP to cause Public announcement as specified under
Section 13 of the Code.

BENGALURU BENCH
CP(IB)/13/BB/17
DATED : FRIDAY 28TH DAY OF APRIL 2017
PRESENT : SRI RATAKONDA MURALI, MEMBER (JUDICIAL)
SRI ASHOK KUMAR MISHRA, MEMBER (TECHNICAL)
IN THE MATTER OF INSOLVENCY AND BANKRUPTCY CODE, 2016 SECTION 10 OF
INSOLVENCY AND BANKRUPTCY CODE, 2016
IN THE MATTER OF 24X7 LEARNING PRIVATE LIMITED
CP(IB)/13/BB/17
24X7 Learning Private Limited
Cowork, 247#201/202, Ist Aa Cross,
2nd Main, Kasturinagar, Bangalore-560043
CORPORATE APPLICANT
PARTIES PRESENT :
Sumana Rao,
S. Rao & Associates
Company Secretaries
No.56, 4th Cross, 2nd Sector,
Nobo Nagar, Banoerghatta Road,
Bangalore-560076
Heard on: 12.04.2017, 25.04.2017
ORDER
This Company Petition is filed by 24X7 Learning Private Limited (Corporate

Applicant) under Section 10 of Insolvency and Bankruptcy Code, 2016 read with
Rule 7 of Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules,
2016 for initiation of Corporate Insolvency Resolution Process.
The Corporate Debtor M/s. 24X7 Learning Private Limited stated in the petition
that it was incorporated on 20th August, 2014.The Registered office of the Corporate
Debtor is situated at Cowork, 24 7#201/202, 1st Aa Cross, 2nd Main Road.
Kasturinagar, Bangalore-560043.The latest authorised share capital is
Rs.2,00,00,000 divided into 17,50,000 equity shares of Rs. 10 each and 25,000
Optionally Convertible Cumulative Preference Shares of Rs.100 each. The issued,
subscribed and paid-up share capital is Rs. 1,72,25,330 divided into 17,22,533
BENGALURU BENCH 127
equity shares of Rs. 10 each. The Audited balance sheet of 31st March, 2016 is
marked as Annexure-D.No.9 to the Application.
The Board of Directors of the Corporate Debtor in their meeting held on 23rd
March, 2017 authorised Mr. K.S Karthik, Director of the Company, to file necessary
application for initiation of Corporate Insolvency Resolution process under
Insolvency and Bankruptcy Code, 2016. The name of the Interim Resolution
Professional has also been proposed which is that of Mr. Ramesh Kumar Bhat. B,
No.624, 1st Floor, 15th Main, BSK 2nd Stage, Bengaluru -560070, email-
id:rk@rkbhat.com. His certificate of eligibility and acceptance to function as an
Interim Resolution Professional has also been placed on record which is marked
as Annexure-D.No.6 to the Application.
The Corporate debtor provided details of financial and operational creditors shown
as Schedule-1 of the petition. A perusal of the details reveal that the corporate
debtor is in default for more than 7 years. The total sum due to Financial Creditors
is Rs.2,16,02,565 and Operational Creditors is Rs.7,99,18,485. The Corporate
Applicant further disclosed the details of security against which the loan of the
corporate debtor is fully or partially secured along with details of the date of its
creation, its estimated value etc.
The corporate debtor has also provided the copies of audited financial statements
for the years 2014-15 and 2015-2016, provisional financial statements as on
22nd March, 2017, List of assets and liabilities as on 22nd March, 2017, details of
financial and operational creditors. The Corporate Applicant disclosed the names
and addresses of members with details of their shareholdings and the affidavit in
support of the petition.
We have heard the Practising Company Secretary. This petition is filed under
section 10 of Insolvency and Bankruptcy Code, 2016. The Applicant is corporate
debtor. The contention of PCS for Petitioner Company is that, the company
committed default and that application is to initiate a corporate insolvency
resolution process. We consider to issue notices to the creditor National Skill
Development Corporation (NSDC) and 2 other large creditors Liquid Elearning
Services Private Limited. Noida and Deloitte Haskins & Sells, Deloitte, Anchorage
II, 100/2, Richmond Road, Bangalore-25. Practising Company Secretary was
directed to issue notices along with petition copies to them.
The PCS has filed information obtained from India Post about Service of Notice on
the above creditors to whom the Notices were directed to be served by this
Bench. None appeared for creditors to whom Notices were ordered and there is
no representation from them. Hence, this Bench admits this petition under section
10 of Insolvency Bankruptcy Code, 2016, declaring moratorium with following
directions:
(i) That this Bench hereby prohibits the institution of suits or continuation of
pending suits or proceedings against the corporate debtor including
execution of any judgment, decree or order in any court of law, tribunal,
any security interest created by the corporate debtor in respect of its
property including any action under the Securitisation and Reconstruction
of Financial Assets and Enforcement of Security Interest Act, 2002; the
recovery of any property by an owner or lessor where such property is
(ii) That the supply of essential goods or services to the corporate debtor, if
moratorium period.
(iii) That the provisions of sub-section (1) shall not apply to such transactions
as may be notified by the Central Government in consultation with any
(iv) That the order of moratorium shall have effect from 28th April, 2017 till the
completion of the corporate insolvency resolution process or until this
Bench approves the resolution plan under sub-section (1) of section 31 or
passes an order for liquidation of corporate debtor under section 33,
whichever is earlier.
(v) That the public announcement of the corporate insolvency resolution
process shall be made immediately as specified under section 13 of the
code.
(vi) That this bench hereby appoints, Mr. Ramesh Kumar Bhat. B, No.624, 1st
Floor, 15th Main, BSK 2nd Stage, Bengaluru-560070, Registration No. IBBI/
IPA-003/IP-00207/20l 6-2017/1927, email - id:rk@rkbhat.com as Interim
Insolvency and Bankruptcy Code, 2016 immediately.
Accordingly, this Petition is admitted.
(RATAKONDA MURALI) (ASHOK KUMAR MISHRA)
MEMBER, JUDIClAL MEMBER, TECHNICAL
DATED THIS THE 28th DAY OF APRIL, 2017
BENGALURU BENCH 129
FALCON TYRES LIMITED

Name of the Corporate Debtor Falcon Tyres Limited
Name of Operational Creditor/ Belthangady Taluk Rubber Grower’s

Applicant Marketing & Processing Co-operative
Society Limited
Company Petition No. CP(IB)/01/BB/17

Amount involved Rs. 1,18,34,618.66/-

1. The Operational Creditor (OC) was formed by rubber growers mainly to
facilitate purchase or procuring of natural rubber from growers and sell it
directly to the industries engaged in business of tyres and other rubber
based product. The Corporate Debtor (CD) is engaged in business of
manufacture of rubber tyres and tubes, rethreading etc.
2. OC had supplied rubber to CD pursuant to purchase orders made by CD
from time to time for which invoices were raised by OC. Both purchase
orders and invoices were filed by OC.
3. As per OC, the value of services provided by it is Rs. 1,18,34,618.66/-.
4. OC gave statutory notice under section 8 of the Code on 24.01.2014 which
was duly received by CD. OC has given affidavit stating that no reply to the
said notice has been given by CD.
5. OC also filed statement of bank account from M/s HDFC Bank for the
relevant period indicating that no payment had been made by CD pursuant
to notice under section 8 of the Code.

A. The Bench, considering the documents filed by OC was satisfied that CD
had failed to discharge its liability as mentioned in the application.
Accordingly, the Bench admitted the application and passed following
directions:
i. Appointed Mr. Anand Ramachandra Bhat as Interim Resolution

Professional
ii. Declared moratorium as per the provisions of Section 14 of the Code,
however, the supply of essential goods or services to CD shall not
be terminated or suspended.
iii. Directed the IRP to cause Public announcement as specified under
BENGALURU BENCH 131

BENGALURU BENCH
CP(IB) No.01/BB/17
DATED: FRIDAY, THE 28th DAY OF APRIL 2017
PRESENT: SRI RATAKONDA MURALI, MEMBER (JUDICIAL)
SRI ASHOK KUMAR MISHRA, MEMBER (TECHNICAL)
IN THE MATTER OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 SECTION 9
OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016
AND
IN THE MATTER OF BELTHANGADY TALUK RUBBER GROWER’S MARKETING &
PROCESSING CO-OPERATIVE SOCIETY LIMITED
CP(IB)No.01/BB/2017
Belthangady Taluk Rubber Grower’s Marketing &
Processing Co-operative Society Limited
Ujjire Village of Belthangady Taluk,
Dakshina Kannada District,
Ujjire-574240
Falcon Tyres Limited
KRS Road, Metagalli, Mysore-570016
CORPORATE DEBTOR
Parties Present: For Applicant: CCI-Legal Corporate Cognition India
No.116 , Railway Parallel Road, Kumara Park West, Bangalore-560020
Heard on: 10.03.2017, 22.03.2017, 23.03.2017, 24.03.2017, 29.03.2017,
10.04.2017, 26.04.2017, 27.04.2017.
ORDER
The Petitioner which is operational creditor namely M/s. Belthangady Taluk Rubber
Grower’s Marketing & Processing Co-operative Society Limited has filed this
Petition stating that the Corporate Debtor Company M/s. Falcon Tyres Limited has
defaulted in repaying a sum of Rs. 1,18,34,618.66 and hence this Petition under
Section 9 of the Insolvency and Bankruptcy Code, 2016 read with Rule 6 of the
Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016
seeking for admission of this petition, declaring moratorium on the Corporate
Debtor Company, direction for public announcement of initiation of corporate
insolvency process and appointment of Interim Resolution Professional as
prescribed under the Code and Rules thereon.
The Petitioner/Operational Creditor M/s. Belthangady Taluk Rubber Grower’s

Marketing & Processing Co-operative Society Limited was formed by the rubber
growers mainly to facilitate purchase or procuring of natural rubber from the
growers and sell it directly to the industries engaged in the business of tyres and
other rubber based products. The corporate debtor M/s. Falcon Tyres Limited is
engaged in the business of manufacture of rubber tyres and tubes; rethreading
etc.
The Petitioner/Operational Creditor M/s. Belthangady Taluk Rubber Grower’s
Marketing & Processing Co-operative Society Limited had supplied rubber to the
corporate debtor pursuant to purchase orders made by the corporate debtor from
time to time. The operational creditor has enclosed the copies of Purchase Orders
issued by the corporate debtor at Annexure-II and the Invoices raised by the
operational creditor on the corporate debtor at Annexure-II of the application. The
value of service provided by the operational creditor is valued at Rs.1,18,34,618.66.
The Petitioner operational creditor gave statutory notice attached with invoice
raised on the corporate debtor demanding payment under Section 8 of the Code
read with Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating
Authority) Rules, 2016 to the debtor company on 24th January, 2017 to repay the
outstanding of Rs.1,18,34,618.66/- and in the event it does not pay within ten days
of receipt of notice, the Petitioner would initiate a corporate insolvency resolution
process. The said Notice was acknowledged by the corporate debtor as evidenced
from the postal acknowledgment attached with the application.
The operational creditor has filed the statement of bank account from M/s HDFC
Bank for the period from 1st September, 2015 to 31st March, 2016 in respect of the
outstanding due, i.e., Rs.1,18,34,618.66/- payable by the corporate debtor.
The operational creditor has filed a memo before this Bench on 10th March, 2017
enclosing with an affidavit dated 8th March, 2017 executed by the authorised
signatory of the operational creditor stating that M/s. Falcon Tyres Limited, the
corporate debtor has not disputed the debt amount payable by them and neither
they have paid the amount nor disputed the amount payable and hence M/s
Falcon Tyres Limited is liable to pay the above said amount to the applicant.
The Operational Creditor has named Mr. Anand Ramachandra Bhat, Registration
No. IBBI/IPA-001/IP-00226/201 6-2017/1414, residing at No. 81, 8th main, Kumara
Park West, Serpentine Road, Bangalore-560020 Email:ab.inspro@outlook.com
as Interim Resolution Professional and the said Interim Resolution Professional
in his letter has expressed his willingness for the appointment and also certified
The corporate debtor has neither given reply to the notice dated 24th January
sent by the petitioner under section 8 of the Code nor has the corporate debtor
appeared before this bench till date.
This Bench is satisfied that the corporate debtor failed to discharge the liability
BENGALURU BENCH 133
mentioned in this Company Petition filed by the operational creditor under section
9 of lnsolvency and Bankruptcy Code, 2016 resulting occurrence of default for an
amount of Rs. 1,18,34,618.66. Hence, this Bench admits this Petition under section
9 of Insolvency and Bankruptcy Code, 2016 declaring moratorium for the purposes
referred to in section 14 of the code with following directions:-
property including any action under Securitization and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002; the recovery
of any property by an owner or lessor where such property is occupied by
or in the possession of the corporate debtor.
moratorium period.
(iii) That the provisions of sub-section (1) of Section 14 shall not apply to such
transact ions as may be notified by the Central Government in consultation
passes an order for liquidation of corporate debtor under Section 33,
code.
(vi) That this Bench hereby appoints Mr. Anand Ramachandra Bhat,
Registration No. IBBI/IPA-001/IP-00226/2016-201 7/1414 , residing at
No.81, 8th main, 8th Main, Kumara Park West, Serpentine Road, Bangalore-
560020, Email: ab.inspro@outlook.com as Interim Resolution Professional
to carry the functions as mentioned under the Insolvency & Bankruptcy
Code.
(RATAKONDA MURALI) ASHOK KUMAR MISHRA
MEMBER (JUDICIAL) MEMBER (TECHNICAL)
DATED THIS THE 28th DAY OF APRIL, 2017
JACKONBLOCK FACILITY SERVICES PVT.LTD.

Name of the Corporate Debtor Jackonblock Facility Services Pvt. Ltd.
Name of Operational Creditor/ M/s Subodha Entertainments Co.

Applicant
Company Petition No. CPNo. (IB)-6(BB)/17

Amount involved Rs. 4,50,778


1. The petitioner (“Operational Creditor” or “OC”) provided services to the
corporate debtor pursuant to purchase orders made by the corporate
debtor (“CD”) for a total value of Rs. 4,50,778. It had also filed copies of the
purchase orders and copies of the invoices along with the petition.
2. The OC had sent two reminder letters to the corporate debtor; one on
June 20, 2016 claiming a sum of Rs. 3,49,221 and another on September
10, 2016 claiming a sum of Rs. 4,50,778 but the CD had not replied to
those letters.
3. The OC again gave notice under Section 8 of the Code on March 01, 2017
to repay the outstanding sum of Rs. 4,50,778.
4. The OC had also enclosed their bankers’ certificate stating that it had not
received any payment from the corporate debtor between April01, 2016 to
March 03, 2017.
5. The OC had proposed the name of Mr. Thirupal Gorige as Interim
Resolution Professional who has given the necessary declarations.

A. The bench took note of the provisions of Sections 9 of the Code and
admitted the petition.
B. The Bench issued the following directions:
i. Declaration of moratorium as per the provisions of Section 14 of the
Code having effect from April 17, 2017 till the completion of the
BENGALURU BENCH 135
corporate insolvency resolution process or until the approval of

resolution plan or passing of a liquidation order.
ii. Public announcement shall be made as specified under Section 13
of the Code.
iii. Appointed Mr. Thirupal Gorige as Interim Resolution Professional
who shall perform all the duties cast upon him under the Code.

BENGALURU BENCH
CP(IB) No.6/BB/17
DATED: MONDAY, THE 17TH DAY OF APRIL 2017
PRESENT: SRI RATAKONDA MURALI, MEMBER (JUDICIAL)
SRI ASHOK KUMAR MISHRA, MEMBER TECHNICAL
IN THE MATTER OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 SECTION 9
OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016
AND
IN THE MATTER OF SUBODHA ENTERTAINMENTS CO.,
CP(IB) No.6/BB/17
Subodha Entertainments Co.
SLV Residency (SH), Gubbala Main Road,
Subramanyapura Post, Uttarahalli,
Bangalore-560061
Jackonblock Facility Services Private Limited
Site No.22, Katha No.25, 3rd Floor,
Above Dena Bank Sharada Nagar,
Vasanthapura Main Road Uttarahalli Hobli
Bangalore-560061
CORPORATE DEBTOR
Parties Present :
For Applicant : Mr. K. Dushyantha Kumar, Practicing Company Secretary, No.404/
2, 7th Main, 9th Cross, Jayanagar II Block, Bangalore-560011
For Corporate Debtor : Mr. Sharath Vatsa, Managing Director, Site No.22, Katha
No.25, 3rd Floor, Above Dena Bank Sharada Nagar,Vasanthapura Main Road,
Uttarahalli Hobli, Bangalore-560061.
Heard on: 30.03.2017, 05.04.2017, 13.04.2017.
ORDER
The Petitioner which is operational creditor namely M/s Subodha Entertainments

Co., has filed this Petition stating that the Corporate Debtor Company M/s
Jackonblock Facility Services Private Limited has defaulted in repaying a sum of
BENGALURU BENCH 137
Rs.4,50,778 and hence this Petition under Section 9 of the Insolvency and
Bankruptcy Code, 2016 read with Rule 6 of the Insolvency and Bankruptcy
(Application to Adjudicating Authority) Rules, 2016 seeking for admission of this
petition, declaring moratorium on the Corporate Debtor Company, direction for
public announcement of initiation of corporate insolvency process and
appointment of interim resolution professional as prescribed under the Code
and Rules thereon.
The Petitioner/Operational Creditor provided services to the corporate debtor
pursuant to purchase orders made by the corporate debtor. The operational creditor
has enclosed the copies of Purchase Orders issued by the corporate debtor at
Annexure-3 and the Invoices raised by the operational creditor on the corporate
debtor at Annexure-5 page 19-33 of the application. The value of service provided
by the operational creditor is valued at Rs.4,50,778. The operational creditor has
sent two reminder letters to the corporate debtor one on June 20, 2016 disclosing
all invoices and claiming a sum of Rs.3,49,221/- and another on September 10,
2016 disclosing all invoices and claiming a sum of Rs.4,50,778/-, but the corporate
debtor has not replied to the said reminder letters sent by the operational creditor.
Thereafter the Petitioner again gave another statutory notice under section 8 of the
Code to the debtor company on 1st March, 2017 to repay the outstanding of
Rs.4,50,778/- and in the event he does not pay within ten days of receipt of notice,
the Petitioner would initiate a corporate insolvency resolution process.
The operational creditor has enclosed a certificate dated 10th March, 2017 from
their banker M/s Andhra Bank, Southend Circle Branch, Bengaluru, stating that
the operational creditor has not received any payment from the corporate debtor
between 1st April, 2016 to 3rd March, 2017 in respect of the due outstanding i.e.,
Rs.4,50,778 payable by the corporate debtor. The operational creditor has also
filed an affidavit in support of this application. Further, he also filed the statement
of account from M/s State Bank of Mysore for the period from 1st April, 2016 to
30th September, 2016 and from 1st October, 2016 to 3rd March, 2017 and the PCS
confirmed that they have not received payment of due amount.
The Operational Creditor has named Mr. Thirupal Gorige, Registration No. IBBI/IPA-
002/IP-N00016/2016-2017/10030, residing at No.87, 2nd Floor, 21st Cross, 7th
Main, N.S. Palya, BTM 2nd stage, Bangalore-560076, Email : gthirupal@gmail.com
as Interim Resolution Professional and the said Interim Resolution Professional
in his letter has expressed his willingness for the appointment and also certified
Mr. Sharath Vatsa, Managing Director of M/s Jackonblock Facility Services Private
Limited has appeared on behalf of the corporate debtor before this Bench and
has admitted the liability due to the Petitioner and he has also no objection for
appointing IRP and this Bench admits this Petition under Section 9 of the code
declaring moratorium for the purposes referred to in Section 14 of the Code with
the following directions:-
property including any action under Securitization and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002; the recovery
of any property by an owner or lessor where such property is occupied by
or in the possession of the corporate debtor.
moratorium period.
(iii) That the provisions of sub-section (1) of Section 14 shall not apply to such
passes an order for liquidation of corporate debtor under Section 33,
code.
(vi) That this Bench hereby appoints Mr. Thirupai Gorige, Registration No.
IBBI/IPA- 002/IP-N00016/2016-2017/10030, residing at # 87, 2nd Floor,
21st Cross, 7th Main, N.S. Palya, BTM 2nd stage, Bangalore-560076,
Email:gthirupal@gmail.com as Interim Resolution Professional to carry
the functions as mentioned under the Insolvency & Bankruptcy Code.
(RATAKONDA MURALI) (ASHOK KUMAR MISHRA)
MEMBER (JUDICIAL) MEMBER (TECHNICAL)
DATED THIS THE 17TH DAY OF APRIL, 2017
CHANDIGARH BENCH 139
CHANDIGARH BENCH
140
M/S JAMES HOTELS LTD.

Name of the Corporate Debtor M/s James Hotels Ltd.
Name of the Financial Creditor/ Punjab National Bank

Applicant
Company Petition No. CP(IB) No. 15/Chd/CHD/2017
Bench NCLT, Chandigarh Bench, Chandigarh

Amount Involved Rs. 52,57,19,407/-


1. Punjab National Bank (“Financial Creditor” or “FC”) filed the present
application against Corporate Debtor for having willfully defaulted in
making payment of the financial debt.
2. CD was initially incorporated in 1980 as Mehfil Restaurants & Hotels
Limited and changed to James Hotels Limited in 1992.
3. FC sanctioned a term loan of Rs. 28 crores vide sanction letter dated
09.01.2010 for which agreement dated 18.03.2010 in respect of
hypothecation of assets was executed. The loan was rescheduled and
second term loan was sanctioned on 29.11.2012. The irregular portion of
the initial loan was transferred to Funded Interest Term Loan (FITL) account
vide sanction letter dated 29.11.2012. As per this letter, fresh loan consisted
of term loan of Rs. 27.29 crores, additional term loan of Rs. 3.40 crores
and FITL of Rs. 3.38 crores were sanctioned.
4. In order to secure the loan, CD mortgaged the Hotel constructed on the
land in which CD has lease hold rights.
5. Further, SBI and Union Bank of India had also sanctioned term loans to CD.
SBI granted term loan of Rs. 45 crores and UBI gave term loan of Rs. 9.5
crores. SBI assigned the loan to ARCIL.
6. The total amount of default as mentioned in the application is Rs.
52,57,19,407/- along with interest upto 31.03.2017.
Ground of Admission and Details of the Order

A. The Bench noted that the question that falls for consideration is whether
the CD had defaulted in making the payment. It noted that in the absence
of formation of Information Utilities, the existence of default has to be
ascertained from other record of evidence of default.
B. The Bench observed that the CD, in its written objections, had not disputed
the existence of default, however, it objected to the manner of calculation
of outstanding amount. Section 3(12) of the Code defines ‘default’ to mean
non-payment of debt when whole or any part of instalment of amount of
debt is due. Thus, calculation of amount of default is not required to be
determined by Tribunal before admitting the application.
C. The statements of account certified under the Banker’s Book’s Evidence
Act and filed by FC fortify its contention regarding non payment of instalment
by CD after declaration of CD’s account as NPA in 2014.
D. Contention of CD that FC wanted to grab land with intent to sell it to land
mafia, or that many defaulters get opportunity for restructuring while CD
got none, or that the CD was willing for a one time settlement were rejected
as being irrelevant for admission of application
E. Objection that consent of 60% of the creditors, as contemplated in section
13(9) of SARFAESI Act is required before filing application under the Code
was rejected on the ground that section 7(1) of the Code does not provide
for seeking such consent. Further, section 251 of the Code and schedule VI
of the Code amends section 13(9) SARFAESI Act making the consent under
section 13(9) being subject to the provisions of Code.
F. Contention that interest of other creditors was not protected was countered
by stating that it was for IRP to take care.
G. The Bench accordingly admitted the application and passed following
directions:
i. Declared moratorium as contemplated under section 13(a) r/w
section 14 of the Code. However, supply of essential goods or
services to CD is to continue
ii. Adjourned the matter for passing formal order as to appointment of
Interim Resolution Professional.
NATIONAL COMPANY LAW TRIBUNAL, CHANDIGARH BENCH,

CHANDIGARH
CP (IB) No.15/Chd/CHD/2017
Date of Order: 27.04.2017
Coram: HON’BLE MR. JUSTICE R.P. NAGRATH,
MEMBER (JUDICIAL)
HON’BLE MS. DEEPA KRISHAN, MEMBER (TECHNICAL)
In the matter of:
PUNJAB NATIONAL BANK
a body corporate, constituted under Banking Companies (Acquisition &
Transfer of Undertakings) Act. 1970, having its H.O. at 7, Bikhaji Cama
Place New Delhi-110607
And
Branch Office at ARMEL Sector 17-B, Chandigarh through its Attorney and Principal
Officer. Shri Shambunath Gupta, Assistant General Manager Branch Office. ARMB,
Sector 17-B. Chandigarh
Petitioner/Financial Creditor
And in the matter of:
M/s James Hotels Ltd.
a company registered under Companies Act, 1956, having its registered
office at Block No 10, Sector 17-A, Chandigarh.
Corporate Debtor
Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with
rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority)
Rules, 2016 to initiate corporate insolvency resolution process in the matter of M/s
James Hotels Ltd.
Present: Mr. R.S. Bhatia, Advocate with Mr. Tarun Bhutani, Manager (Law), Punjab
National Bank Mr. Anand Chhibbar, Senior Advocate with Mr. Nitish K. Vasudeva,
Advocate for Corporate Debtor.
ORDER
This application is filed by Punjab National Bank, a body corporate, constituted

under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970,
the Financial Creditor under Section 7 of Insolvency and Bankruptcy Code, 2016
(for short to be referred hereinafter as ‘the Code’) read with rule 4 of Insolvency
and Bankruptcy (Application to Adjudicating Authority) Rules 2016 (for brevity ‘the
Rules’) against the Corporate Debtor for having defaulted in making payment of
the financial debt. The application has been filed through Shri Shambunath Gupta,
Assistant General Manager, Branch Office ARMB. Sector 17, Chandigarh, who is
authorised to file this application vide power of attorney dated 15.02 1995, copy of
which is at Annexure 1. The competent authority has also permitted the filing of
the application vide letter dated 30.03.2017 Annexure 2.
2. The application has been filed in Form No.1 of the Rules as required by Rule 4(1)
of the Rules The instant application has been filed exactly in terms of format in
Form No.1, which is in five parts providing the necessary information. Under sub-
rule (3) of rule 4 of the Rules, the petitioner is required to despatch copy of
Application filed to Adjudicating Authority through the registered post or speed
post to the registered office of the Corporate Debtor, The petitioner attached the
postal receipt dated 05 04.2017 of despatch of the application.
3. The matter was listed for the first time before us on 07.04.2017 and on the said
date, appearance was made by Mr. Anand Chhibbar learned Senior Advocate
with Mr. Gaurav Mankotia, Advocate for the Corporate Debtor’. On 07.04.2017 the
petitioner/Financial Creditor was directed to file an affidavit of despatch of the
notice to the registered office of ‘Corporate Debtor’ and also furnish fresh synopsis
of dates and events, as the date of CP number was left blank. This compliance
was to be made by 13.04.2017. The said compliances were made by the petitioner-
financial creditor. Copy of these documents were supplied to the learned counsel
opposite.
4. The matter was, however, adjourned from 07.04 12017 to 19.04.2017 due to
spell of holidays from 08.04.2017 to 16.04,2017, 22.04.2017 and 23.04,2017 were
the weekly holidays These observations are being made in order to calculate the
period of 14 days within which, the application filed by the Financial Creditor’ is to
be decided. Taking the actual working days into account, the application is being
disposed of within a period of 10 days from the date when it was listed before the
Bench for the first time.
5. It is admitted fact that the ‘Corporate Debtor’ was incorporated on 25.08.1980
in the name of Mehfil Restaurants & Hotels Limited. The name of the company
was changed to James Hotels Limited in 1992 with fresh certificate of incorporation
obtained on 20.03.1992, The certificate of incorporation of the Corporate Debtor
with changed name is at Annexure 3, with which the Memorandum and Articles
of Association have been annexed. The CIN number of the Corporate Debtor is
L55101CH1930PLC004249. The Corporate Debtor has the authorised share capital
of Rs.14,00,00,000/- and its paid up capital is Rs.8,00,05,000.
6. In Part III of Form No.1, the ‘Financial Creditor’ has proposed the Interim
Resolution Professional as Mr. Vivek Goyal, House No.5756, Duplex Complex,
MHC Manimajra and there is also the written communication in Form 2 annexed
as Annexure 4. When the matter was listed on 19.04.2017 statement of the
proposed IRP. Mr. Vivek Goyal was recorded, he stated that he has since been
appointed as Insolvency Resolution Professional on 12.04.2017 i e after filing of
this petition by the Hon’ble Principal Bench of National Company Law Tribunal
New Delhi, in Insolvency Petition No.26 (ND) of 2017 titled as Prideco Commercial
Projects Pvt. Ltd. Vs M/s Era Infra Engineering Ltd. He further stated that he is
eligible to be appointed as Resolution Professional in respect of Corporate Debtor
in terms of Regulation 3 of Insolvency and Bankruptcy Board of India (Insolvency
Resolution Process for Corporate Persons) Regulations, 2016 (for short the
Regulations) and that he is not a related party to the parties to this petition, He is
neither employee nor promoter or partner etc. of the respondent company or
connected with the petitioner Bank. He undertook to abide by the Code of Conduct
set out by the Board under the Regulations.
7. We have heard learned counsel for the applicant-petitioner and the learned
senior counsel for the ‘Corporate Debtor’ and perused the record with their able
assistance.
8. The crucial issue before the Adjudicating Authority would be to ascertain the
existence of default from the records of an information utility or on the basis of
other evidence furnished by the financial creditor as per sub-section (3) of Section
7 of the Code The other contentions raised by the learned counsel for the parties
would be discussed in the later part of this order.
9. As per sub-section (3) of Section 7 of the ‘Code’, the ‘financial creditor’ has to
furnish along with the application-
(a) record of the default recorded with the information utility or such other
record or evidence of default as may be specified;
(b) the name of the resolution professional proposed to act as an interim
resolution professional and
(c) any other information as may be specified by the Board.
The information utility has not so far been formed. Therefore, the existence of
default has to be ascertained from the other record of evidence of default, which
is attached with the instant petition.
10. The term ‘specified’ is defined in Section 3(32) of the Code as meaning
specified by regulations made by the Board under this Code and the term ‘specify
shall be construed accordingly. Under regulation 8(2) of the Regulations, the
existence of debt due to the financial creditor may be proved on the basis of
(a) the records available with the information utility, if any;
(b) other relevant documents, including-
(i) a financial contract supported by financial statements as evidence
of the debt;
(ii) a record evidencing that the amounts committed by the financial
creditor to the corporate debtor under the facility has been drawn by
(iii) financial statements showing that the debt has not been repaid, or
(iv) an order of a court or tribunal that has adjudicated upon the non-
payment of a debt, if any.
11. In part IV of the application m Form 1 against the relevant columns, the applicant-
financial creditor has mentioned the date of sanction of the term loan of Rs. 23.00
crores as per sanction letter dated 09.01.2010 and further amount of Rs. 3.40
crores sanctioned on 29 11.2012 The total amount in default is shown as
Rs.52,57,19,407 along with interest upto 31 03.2017 for which the calculation
sheets in respect of all the three different loans are at Annexure 5 to 7.
12. As per the information given in part V of Form No 1, the original term laon of
Rs.28.00 crores, was sanctioned to the ‘Corporate Debtor’ vide sanction order
dated 28.01 2010. Annexure P-12 is the sanction order in favour of Corporate
Debtor. The terms and conditions of the term loan are annexed with this Annexure
P-14 is the agreement dated 18.03.2010 in respect of hypothecation of assets to
secure the loan executed by corporate debtor. Annexure P-15 dated 18.03.2010 is
agreement of Hypothecation of movable assets forming part of Fixed/Block assets
and agreement of hypothecation of current assets of the even date is at Annexure
P-16.
13. It is further stated that the loan was rescheduled and second term loan was
sanctioned on 29.11.2012 It is revealed that now the irregular portion of the initial
loan was transferred to FITL Account. The sanction order dated 29.11.2012 is
Annexure P-13. As per this letter, the fresh loan consisted of term loan of Rs.27.29
crores, additional term loan of Rs.3.40 crores and funded interest term loan (FITL)
of Rs.3.38 crores were sanctioned. Alongwith this sanction letter, the terms and
conditions are annexed.
14. Learned counsel for the petitioner referred to the repayment schedule in
respect of term loan of Rs.3.40 crores as fixed in the sanction letter to be 48
monthly instalments of Rs. 1 lac each commencing w.e.f. April, 2015: 36 monthly
instalment of Rs.6 lacs each w.e.f. April, 2019 and 8 monthly instalment of Rs.10
lac each with effect from April, 2022 The other condition was that the interest
during the implementation period and thereafter to be serviced/recovered as
and when levied was also to be paid, Similarly, the instalments were also fixed in
respect of the repayment of the FITL and the rescheduled term loan of Rs.27.29
crores with the clause of interest to be deposited as and when levied. The
supplementary agreement dated 30.11.2012 on the basis of the aforesaid sanction
in respect of Rs.27.29 crores is Annexure P-17; for fresh term loan of Rs.3.40
crores Annexure P-18. These agreements executed by the corporate-debtor also
contain the repayment schedule as per the sanction letter. The fresh hypothecation
agreement in respect of all the three loans are at Annexure P-19 and P-20 both
dated 30.11.2012.
15. The petitioner Bank has also disclosed that in order to secure the loan, the
corporate debtor mortgaged the Hotel constructed on the land situated on
commercial plot measuring 9602 square yards in Block No 1 Sector 17-A
Chandigarh, in which the Corporate Debtor has lease hold right. In the list of
events, it is also pointed out that State Bank of India and United Bank of India also
sanctioned the term loans to the Corporate Debtor, SBI has granted the term loan
of Rs.45 crores and United Bank of India gave term loan of Rs.9.5 crores. The SBI
has assigned the loan to ARCIL. The Financial Institutions have pari passu charge
on the aforesaid property along with the ARCIL and United Bank of India, The
Certificates of Registration of charges with the ROC are Annexure-8 and issued
by ROC on 20.04.2010 and Annexure-9 in respect of the charge created on
30.11.2012 Annexure-9 was issued on 22.01.2013.
16. The question basically that falls for consideration is whether the Corporate
Debtor has defaulted in making the payment. For that also, there was no dispute
in the written objections filed by the Corporate Debtor, but the argument vehemently
raised by learned Senior counsel was that the Corporate Debtor has seriously
challenged the manner of calculation of the outstanding amount and therefore,
the amount of default cannot be possibly determined, particularly when various
litigations are pending about the amount of default as claimed by the petitioner
Bank It would be pertinent to refer to the definition of term ‘default’ given in
Section 3(12) of the Code. The ‘default means non-payment of debt, when whole
or any part or instalment of the amount of debt has become due and payable
amount is not repaid by the debtor or the corporate debtor, as the case may be. So
the term used is very wide and thus calculations of the exact amount of default is
not required to be determined by the Tribunal before admitting the application.
This aspect has been properly taken care of by the Statutory Regulations. Regulation
10 of the Regulations says that the interim resolution professional or the resolution
professional, as the case may be, may call for such other evidence or clarification
as he deems fit from a creditor for substantiating the whole or part of its claim
Under Regulation 11, the creditor has to bear the cost of proving the debt due to
such creditor.
17. It would also be relevant to refer to regulation 14 of the Regulations, which
reads as under
“14. (1) Where the amount claimed by a creditor is not precise due to any
contingency or other reason the interim resolution professional or the resolution
professional as the case may be, shall make the best estimate of the amount
of the claim based on the information available with them.
(2) The interim resolution professional or the resolution professional, as the
case may be, shall revise the amounts of claims admitted, including the
estimates of claims made under sub-regulation (1), as soon as may be
practicable, when he comes across additional information warranting such
revision “
So, the above provisions would take care of contentions raised with vehemence
by the learned senior counsel for respondent.
18. The primary documents for determining the default would be the copies of the
statements of account certified under the Banker’s Book’s Evidence Act Learned
counsel for the petitioner would refer to the statement of account Annexure 22
relating to the term loan of Rs.23 crores: Annexure 23 in respect of fresh term loan
of Rs.3.4 crores and Annexure 24 in respect of FITL loan of Rs.3.38 crores. These
statements would fortify the contention of learned counsel for the applicant that
no instalment was deposited after the account was declared NPA in the year
2014.
19. The applicant-financial creditor has also made the calculation chart of
outstanding amount upto 31.03.2017 Annexure 5 to 7 and as per default statements
the total amount comes to be Rs.52,57,19,407, though this calculation may not be
accepted, as the exact amount of default to be ultimately determined, in case the
(RP is appointed. But the fact remains that there is default committed by the
Corporate Debtor in making the payments to the financial creditor.
20. In the statutory Form 1 at Sr. No.6 of Part-V the applicant-‘corporate debtor’ is
to inform, if there is any record of default available with any credit information
company. The applicant has relied upon Annexure 21, the report of Credit
Information Bureau (India) Limited to be also evidencing the default committed by
the corporate debtor.
21. The corporate debtor has stated in the objection petition that the Applicant/
Financial Creditor intends to thwart the working of the company which even after
turbulent times managed to sustain itself and has also approached the Bank for
restructuring the loan and to make one-time settlement. The Bank, however
wants to grab the possession of the property and sell to the land mafia for peanuts.
It was further alleged that Corporate Debtor was always ready to do one-time
settlement and request was also made to the Bank for OTS, but same was not
accepted by the Bank. It was stated that many debtors have been privileged with
the offer of restructuring of their loans throughout the country, The above are not
the relevant question on the basis of which the application can be rejected It is
rather not the version of the corporate debtor in the objection petition that any
instalment was paid by it after the account was declared the year 2014. The
above facts amount to admission of the default by the corporate debtor The
apprehension projected by the ‘corporate debtor can be taken care of by the IRP
who has to take charge of the company as a going concern. He may even make
efforts to settle the debts with the applicant.
22. The learned senior counsel for the Corporate Debtor however, laid emphasis
on the language of sub-section 5 of Section 5 of the Code and vehemently
contended that the Adjudicating Authority is to first satisfy itself that the application
is complete and to then determine that the Corporate Debtor has committed
default. Learned counsel submits that the application cannot be considered as
complete as the information in respect of various litigations has not been provided.
The other contention is that even no notice of this petition to the other financial
creditors to whom the corporate debtor owes about 60% of total loan, namely:
the SBI now ARCIL as well as United Bank of India. The learned senior counsel
further submitted that there are about 38,80.05,000 shareholders of the company
and shareholding of the public is to the extent of about 47.62%. It is vehemently
contended that in case the application is admitted, the interest of large number of
people who are not aware of these proceedings would be jeopardised, The
learned counsel would further contend that the interest of other shareholders
cannot be possibly protected without any publication of notice of the instant
petition.
23. Learned senior counsel further submitted that the petitioner Bank has in fact
concealed material facts by simply attaching copy of notice under Section 13(2) of
SARFAESI Act 2002, dated 09.08.2014. though the subsequent notice under Section
13(4) dated 11.01,2016 was also issued, annexed with the objection petition at
page 225 of the objections, in which the financial creditor i.e. PNB claimed to be
the Consortium Lenders Leader, with the other financial creditors as United Bank
of India and ARCIL. It was further contended that a petition before the Debt Recovery
Tribunal can be filed only after obtaining consent of 60% of the creditors by virtue
of Section 13(9) of the SARFAESI Act, 2002 and such a principle should have been
followed.
24. Having given our thoughtful consideration to the above contentions, we are
of the view that on plain reading of sub-section (1) of Section 7 of the Code, the
consent of other ‘financial creditors to the extent of any percentage was never
intended nor such an interpretation can be implied Section 7 (1) of the Code says
that the financial creditor either by itself or jointly with the other financial creditors
may file an application for initiating corporate insolvency resolution process
against the corporate debtor before the Adjudicating Authority when a default
has occurred As per explanation to this sub-section, a default includes a default
in respect of financial debt not only to the petitioner financial creditor, but to any
other financial creditor of the corporate debtor. The above provision is inclusive
and has wide implication and the eligibility of moving application by one of the
financial creditors cannot be curtailed. The requirement of sub-section (2) of
Section 7 is filing of an application by the financial creditor in such form and
manner as may be prescribed Form has statutory backing and no additional
information other than what is intended in different parts of form, can be imported.
Part 1 of the Form requires the particulars of the financial creditor making the
application and there is no indication to provide the information relating to the
other financial creditors Requirement of service of notice to the shareholders by
publication or impleading the other financial creditors as parties, is neither required
under the provisions of the Code nor under the Rules framed thereunder.
25. The learned counsel for applicant-Bank seems to be quite correct in contending
that the consent of 60% of the creditors as required by Section 9 of SARFAESI Act,
2002 cannot be applied to the proceedings under the Code, It is apparent from
the amendment made in Section 13(9) of SARFAESI Act, 2002 by virtue of Section
251 of the Code and its schedule VI. Now the requirement of the consent under
Section 13(9) of SARFAESI Act, has been made subject to the provisions of Insolvency
and Bankruptcy Code, 2016 and the ‘Code’ enables the creditor either by itself or
jointly to trigger the insolvency resolution process.
26. With regard to the contention raised by the learned senior counsel for the
corporate debtor, as to how to protect the interest of other financial creditors i.e.
ARCIL and United Bank of India. We find that it is for the IRP to take care of these
questions on account of multifarious duties assigned to him under the Code
itself. The IRP is to constitute a committee of the creditors, which has to comprise
of all the financial creditors of the corporate debtor, as provided in Section 21 of
the Code The issue of pari- passu charge in respect of the same property by the
three financial creditors is for the IRP to take care because he would not be
representing the applicant, but all the creditors, financial creditors and others,
while taking over the charge of corporate debtor as a going concern. There are
various other safeguards with onerous duties cast upon the IRP as laid down in
Section 21 of the Code with regard to the claim of creditors of the corporate debtor,
27. Otherwise the contention of learned counsel for the petitioner/financial creditor
that the corporate debtor has no right to be heard or that it cannot file the objections
being not provided m the Code or rules framed thereunder cannot be sustained
because the principles of natural justice to the extent permissible within the time
line prescribed under the Act should be complied. This principle can be implied
from the provisions of Rule 4 of the Rules. Sub-section (3) of Section 4 says that the
applicant shall despatch forthwith a copy of the application filed with the
Adjudicating Authority by registered post or speed post to the registered office of
the Corporate Debtor The objective of the aforesaid rule is to alert the corporate
debtor so as to enable it to deposit the amount of default or to raise objections
though of course within the possible time frame as may be fixed by the
Adjudicating Authority so as to comply with the statutory time line of disposal of
the application. In view of rule 4(3) of the Rules as discussed above, which
requires notice to bo sent to the corporate debtor only, it emerges that the
legislature never intended the public notice to the shareholders or for that matter
any other person.
28. Coming to the other contention, in the synopsis dated 11.4 2017, the applicant/
Financial Creditor has given the list of 19 cases relating to this corporate debtor,
but 10 cases out of those have been disposed of as mentioned in the said table.
The following cases, however, are still pending:
CASES PENDING IN PUNJAB AND HARYANA HIGH COURT
CASE NO. TITLE NEXT DATE STATUS
CWP/24392/2016 PNB Vs. UT Magistrate 01 05 2017 Pending
and others
CP/48/2016 UBI Vs. James Hotel 17 07.2017 Pending
CASES PENDING IN BOMBAY HIGH COURT
WP-2341-2016 H.S. Arora Vs. BOD, PNB 20.03.2017 Pending
CASES PENDING IN DEBT RECOVERY APPELLATE TRIBUNAL
Mis.Appeal 379 PNB Vs. James Hotels 05.05 2017 Pending
2016 & Ors.
CASES PENDING BEFORE DRT, CHANDIGARH
SARR/2028/2016 James Hotel Vs SBI 26.04 2017 Pending
Now SA/225/2016 Ors.
SARR/l 976/2016 A.S. Bhullar Vs SBS & Ors. 27.10.2016 Pending
OA/1270/2016 PNB Vs. James Hotel 17.05.2017 Pending
OA/215/2016 ARCIL. Vs James Hotel 31.05.2017 Pending

OA/IIID/2016 UBI Vs. James Hotel 31.05 2017 Pending
It is also informed in the synopsis that besides the above information, the other
litigation between the company and other co-shareholders is also pending. These
cases include Civil Writ petitions filed in the High Court at the instance of the
corporate debtor and its directors/promoters, apart from the litigation filed at the
instance of ARCIL and also the petitioner/financial creditor The learned senior
counsel for corporate debtor vehemently contended that copies of those cases
have not been filed to know the nature of controversy involved in different forums.
It was further submitted that the Adjudicating Authority would not be able to know
the nature of the dispute in these cases in the absence whereof the petition
cannot be considered as complete nor the Adjudicating Authority would be able
to satisfy itself about the default for the purpose of admitting the application.
29. As discussed already, we have found that there is default committed by the
corporate debtor and the rest of the issues can be conveniently dealt with under
various provisions of the Code. The only bar for a person, who is not eligible to
make application is contained in Section 11 of the Code, which reads as under:
‘The following persons shall not be entitled to make an application to initiate
corporate insolvency resolution process under this Chapter namely
(a) a corporate debtor having completed corporate insolvency resolution
process, or
(b) a corporate debtor having completed corporate insolvency resolution
process twelve months preceding the date of making of the application;
or
(c) a corporate debtor or a financial creditor who has violated any of the
terms of resolution plan which was approved twelve months before the
date of making of an application under this Chapter or
(d) a corporate debtor in respect of whom a liquidation order has been passed.
The applicant does not fall under any of the above clauses to debar it from filing
the instant petition. It is none of the case of the parties that any liquidation order
has been passed against the corporate debtor.
30. Pendency of various litigations in different forums as revealed by the applicant
or any other case(s) would have no bearing in the instant petition unless there is
any adjudication in respect of the claim made by the applicant or the default of
the corporate debtor. Taking a contrary view would make the provisions of the
Code as redundant. As per the particulars given in Form 1, the petitioner has
given reference to the OA No 1270 of 2015 before DRT-II, Chandigarh where the
matter is still pending adjudication Even the other financial creditors having not
come before the Adjudicating Authority so far.
31. Learned counsel for Applicant referred to M/s Transcore Vs. Union of India
and Anr., AIR 2007 Supreme Court 712(1) in support of his contention. One of the
question before the Hon’ble Supreme Court was whether the Bank or Financial
Institutions, having elected to seek remedy in terms of DRT Act, 1993 can still take
recourse to the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act (NPA Act for short) It was held by the Hon’ble
Supreme Court that NPA Act was an additional remedy under the DRT Act. Together
they constitute one remedy and therefore, the doctrine of election does not apply
Even according to SNELL’s Equity (31st Edition page 119) the doctrine of remedies is
available only when there are two or more co-existent remedies available to the
litigants at the time of election which are repugnant and inconsistent. It was
further held that there is no repugnancy or inconsistency between the two
remedies and therefore the doctrine of election has no application. In the instant
case rather the provisions of the Code’ have overriding effect and takes care of
the suits or proceedings against the Corporate Debtor already pending.
32. There is a clear difference in the intention of the legislature, in cases of
application filed by ‘Operational Creditors and ‘Financial Creditors An application
for Corporate Insolvency Resolution Process by Operational Creditor can be filed
under section 9 of the ‘Code’ One of the conditions for admitting the application is
that no notice of the dispute has been received by the Operational Creditor or
there is no record of dispute in the information utility. There is no such condition
while taking up the application under section 7 of the Act about the existence of
the dispute in relation to the default committed by the Corporate Debtor.
33. In any case, the legislature has taken complete care with regard to the
pending cases Sub-section (1) of Section 14 of the Code says that subject to the
provisions of sub-sections (2) and (3), on the insolvency commencement date,
the Adjudicating Authority shall by order declare moratorium for prohibiting all of
the following, namely:

So, even the continuation of pending suits or proceedings against the corporate
debtor including execution of any judgment, decree or order in any Court of law.
Tribunal, Arbitration Panel or other authority, would stand stayed. There is no
indication in any provision of the Code or the Rules framed thereunder that mere
pendency of the suit or any litigation by or against the corporate debtor has any
bearing upon the proceeding of the application under the Code, This intention of
the legislature is manifest from the import of Section 238 of the Code, which
reads as under :
‘The provisions of this Code shall have effect notwithstanding anything
inconsistent therewith contained in any other law for the time being in force or
any instrument having effect by virtue of any such law.”
34. The Code is the later legislation and has the overriding effect over the other
laws relating to the issues in question. If the corporate debtor or the directors etc.
have filed any suit or proceedings, it may be contended that those proceedings
are not against the corporate debtor for applicability of Section 14 of the Code, but
such a proposition may not arise at this stage.
35. The petitioner Bank had already issued a notice dated 20 08.2015 (Annexure
R-1) attached with the objections, for initiating the proceedings for declaring the
corporate debtor as wilful defaulter. For that matter the applicant Bank has already
filed OA before the DRT. Learned senior counsel for the corporate debtor contended
that the present petition to declare the respondent/corporate debtor as insolvent
would be setting up an inconsistent case. We have already discussed above that
the provisions of the Code have overriding effect over other laws and being the
latest law on the subject, the proceedings before the DRT will not debar the right
of the financial creditor to file application under Section 7 of the Code.
36. The next contention was that by taking over of custody of the premises of the
corporate debtor, it with seriously prejudice the respondent/corporate debtor in
pursuing the criminal case already pending on a private complaint against the
Bank official and others as they could tamper with the evidence We find that the
insolvency professional has an onerous duty not to act an agent of the applicant,
but he has to abide by the Code of Conduct and follow the norms framed by the
Board. He has to maintain the high ethical standards While taking in custody the
premises and the articles lying therein, we can direct the IRP to prepare an
inventory of all the articles, which are lying there and to keep them in safe custody,
wherever necessary and while preparing the inventory of articles, one of the
authorised representative of the corporate debtor, can be permitted to associate
himself in the said process, but such a person would be duty bound to attest the
inventory as a witness.
37. It was also submitted for the corporate debtor that the proposed IRP is already
appointed in another case, by the Hon’ble Principal Bench after the filing of this
petition, but this aspect can be taken care of, as we are of the view that the nature
of involvement in the business of the corporate debtor. IRP may not be able to
manage the affairs of the corporate debtor. Learned counsel for the petitioner in
fact had even suggested that the Bank would be proposing the name of other IRP
by filing the fresh communication in form No.2 so that this objection is removed,
The fresh written communication in Form II has been filed in the registry by the
applicant proposing the name of Navneet Gupta having registration No. IBB I/I
PA-01/IP-00453/-2016-17/2006 as interim Resolution Professional in place of
Mr. Vivek Goyal. The Form is complete in all respect.
38. It was also contented on behalf of the Corporate Debtor that there is no prayer
made by the Applicant in the instant case Perusal of Form No.1 in which the
Financial Creditor has to apply does not contain any such clause, though there is
such a requirement under the Recovery of debts and Bankruptcy Act, 1993. The
application before the DRT is to be filed in Form No.II of The Debt Recovery Tribunal
(Procedure) Rules, 1993 at Sr No.VI for the relief prayed for or any other relief, but
there is no such requirement in Form No.1 of the Rules, obviously because the
consequences of admission are provided under provisions of the Code itself and
the Rules framed thereunder.
39. The petition, therefore, is admitted declaring the moratorium with the following
directions’
i) That the Bench hereby prohibits the institution of suits or continuation of
pending suits or proceedings against the ‘Corporate Debtor’ including
or disposing of by the Corporate Debtor any of its assets or any legal right
or beneficial interest therein, any action to foreclose, recover or enforce
any security interest created by the ‘Corporate Debtor’ in respect of its
property including any action under the Securitization and Reconstruction
occupied by or in the possession of the Corporate Debtor.
ii) That the supply of essential goods or services to the Corporate Debtor, if
moratorium period
iii) That the provisions of sub-section (1) shall not apply to such transactions
iv) That the order of moratorium shall have effect from the date of this order
till completion of the corporate insolvency resolution process or until this
passes an order for liquidation of Corporate Debtor under Section 33 as
the case may be
40. As per the sub-section (1) of Section 16, the Adjudicating Authority is to appoint
Insolvency Resolution Professional within 14 days of the insolvency
commencement date As per sub-section (6) of section 7, the Corporate Insolvency
Resolution Process shall commence from the date of the admission of the
application under sub-section (5).
The matter is adjourned for further directions and passing formal order for
appointment of Insolvency Resolution Professional on 08.5 2017 The order be
communicated to the applicant/Financial Creditor and the Corporate Debtor
forthwith.
(Deepa Krishan) (Justice R.P Nagrath)
Member (Technical) Member (Judicial)
Pronounced
April 27, 2017
SRS MODERN SALES LTD.

Name of the Corporate Debtor/ SRS Modern Sales Ltd.
Applicant
Company Petition No. CP(IB) No. 10/Chd/Hry/2017
Bench NCLT, Chandigarh Bench

Section involved Section 10 of IBC, 2016 (Code) r/w Rule

7(1) of the Insolvency and Bankruptcy
Code, 2016
Amount involved Rs. 141,15,64,094.40

1. The petitioner (“Corporate Debtor” or “CD”) was incorporated on January
18, 2007 with the Registrar of Companies, National Capital Region of New
Delhi having authorised share capital of Rs. 2 crores and paid up capital of
Rs. 1,69,45,240 crores.
2. The CD submitted that the total amount owed to financial creditors was
Rs. 81,14,58,469.04 while a sum of Rs. 61,83,15,442.36 was owed to
operational creditors.
3. The CD also submitted that out of 24 operational creditors two creditors
were in respect of services i.e. lease rent for which the amount in default
was Rs. 5000 and Rs. 10000. Other operational creditors included Central
Government, State Government, employees and ex-directors of the
company.
4. The CD represented that due to the defaults committed in the payment of
the dues of the financial institutions, the banks had issued notices under
section 13(2) of SARFAESI Act, 2002 being the notice by Union Bank of India
issued on 06.09.2016, notice by Punjab National Bank issued on 29.12.2016
and notice by Vijaya Bank issued on 21.01.2017 calling upon it to pay their
respective sums of money.
5. The CD also represented that all three financial institutions created an
equitable mortgage by deposit of title deeds of lands situated at different
areas in Faridabad. Apart from the mortgage personal guarantees were
also given by seven persons.
6. The CD represented that the estimated market value of the properties

were around Rs. 90.27 crores.
7. The CD had proposed the name of Mr. Sameer Rastogi as Interim
Resolution Professional who gave necessary declarations under the code.

A. The bench took note of the provisions of Sections 3(8), 3(12) and 10 of the
Code and admitted the petition due to mounting losses, fall in the revenues
and huge amount of default committed in respect of operational and
financial creditors.
i. Appointed Mr. Sameer Rastogi as Interim Resolution Professional
for a term of 30 days from the date of this order or as may be
determined by the Committee of Creditors and who should perform
all the duties cast upon him under the Code.
ii. Suspension of powers of Board and vesting of the management of
affairs with the Interim Resolution Professional as per Section 17 of
the Code.
iii. Preparation of a complete list of inventory of assets of CD by the
Insolvency Resolution Professional.
iv. Constitution of Committee of Creditors at the earliest but not later
than 15 days from the date of this order.
v. Extension of cooperation by the personnel and management of the
CD to the Interim Resolution Professional in management of its
affairs as a going concern.
vi. Declaration of moratorium as per the provisions of Section 14 of the
Code having effect from April 17, 2017 till the completion of the
corporate insolvency resolution process or until the approval of
resolution plan or passing of a liquidation order.
vii. Public announcement shall be made within 3 days as specified
under Section 13(1)(b) read with Section 15 of the Code and Regulation
6 of the Insolvency and Bankruptcy Board Of India (Insolvency
Resolution Process for Corporate Persons) Regulations, 2016.
Submission of report of events before the Tribunal every week in
relation to the CD.
IN THE NATIONAL COMPANY LAW TRIBUNAL

CHANDIGARH BENCH, CHANDIGARH
CP (IB) NO. 10/Chd/Hry/2017
Coram: HON’BLE MR. JUSTICE R.P. NAGRATH, MEMBER
(JUDICIAL)
In the matter of :
SRS Modem Sales Limited,
SRS Tower, Unit No. 700 B,
7th Floor, Near Metro Station,
Mewla Maharajpur, GT Road,
Faridabad, Haryana,
...Corporate Applicant/Debtor
Application for initiating Corporate Insolvency Resolution Process u/s 10 of the
Insolvency and Bankruptcy Code, 2016 read with Rule 7 of the Insolvency and
Bankruptcy (Application to Adjudicating Authority) Rules, 2016.
Present : Mr. Rakesh Kumar, Advocate with Mr. Gaurav Mankotia, Advocate for
Applicant/Debtor.
ORDER
Justice R.P. Nagrath, Member (Judicial) (ORAL):
This is an application filed by SRS Modem Sates Limited a 'Corporate Debtor’ itself
in Form 6 as prescribed by sub-rule (1) of Rule 7 of the insolvency and Bankruptcy
(Application to Adjudicating Authority) Rules, 2016 (for brevity, ‘the Rules’) for
initiating corporate insolvency resolution process under Sections 10 of the
Insolvency and Bankruptcy Code, 2016 (for brevity , ‘the Code’) at the instance of
the ‘Corporate Applicant’. The ‘Corporate Debtor’ also falls within the term
'Corporate Applicant’ as defined in sub-section (5) of Section 5 of ‘the Code’.
2. It is represented by Mr. Rakesh Kumar, learned counsel for ‘Corporate Debtor'
that the ‘Applicant Company’ was incorporated on 18.01.2007 with the Registrar
of Companies, National Capital Region of New Delhi. This is part of Annexure VII
containing the Memorandum & Articles of Association of the 'Corporate Debtor’.
Learned counsel further represents that as per the document forming part of
Annexure VII at Page 991 of Paper Book, the ‘Corporate Debtor’ altered the
Memorandum of Association with respect to the place of registered office by
changing it from State of Delhi to Haryana i.e. in district Faridabad. The ‘Applicant
Company’ has been allotted CIN No. U51109HR2007PLC040823.
3. The authorised share capital of the ‘Applicant Company’ is Rs. 2 crores and its
paid up capital is Rs.1,69,45,240/-. There are presently four Directors of the
'Applicant Company' with distinct DIN numbers and eight shareholders as per
list Annexure ‘ VI (F)’ with major shareholding belonging to
(i) SRS Finance Ltd. 19.20%
(ii) Latest I.T. Solutions Ltd. 19.00%
(iii) SRS Knowledge & Technologies Pvt. Ltd. 18.99%
It is also represented that the 'Applicant Company' passed resolution dated
18.02.2017 authorising Mr. Naresh Kumar Goyal, Whole Time Director and Mr.
Sushil Kumar, Director of the company severally to file the petition before the
National Company Law Tribunal, Chandigarh Bench for initiating insolvency
proceedings against the company; authorising Credence Law, Advocates and
Solicitors to act as counsel of the company and nominating Mr. Sameer Rastogi
as Insolvency Professional describing his registration number granted by the
Insolvency and Bankruptcy Board of India, on account of the company having
defaulted to make payment to the secured creditors who have issued notices
under Section 13(2) of the Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002 (SARFAESI Act). Copy of the resolution
is at Annexure ‘A’. Mr. Naresh Kumar Goyal and Mr. Sushil Kumar have been
authorised to receive the process on behalf of the company. The instant application
has been filed by Mr. Naresh Kumar Goyal stated to be the Whole Time Director
of the company and the contents of the application are also supported by his
affidavit.
4. It is further represented that the 'Applicant Company’ has the following financial
creditors :
Sl. Name of the Address Total debt raised Amount in default
No. Bank
SECURED CREDITORS
1. Punjab National International Banking Debt raised as per As per provisional

Bank Branch, 8th Floor, sanction letter balance sheet
DCM Building, dated 10.03.2010: dated 14.03.2017
Barakhamba Road, Rs. 25 crores. Rs.27,22,84,558.85
New Delhi As per notice under
Section 13(2) of
SARFAESI Act, 2002-
Rs. 26,89,14,258.85
2. Union Bank of 14/15-F, Connaught Debt raised as per As per provisional
India Place, New Delhi notice under balance sheet

Section 13(2) of dated 14.03.2017 -
SARFAESI Act 2002 Rs. 37,94,92,593.19
and Form
No.CHG-1 As per notice under
(Annexure 'E') for Section 13 (2) of
registration of SARFAESI Act 2002-
charge Rs.37.50 Rs.40.41,83,754.19
crores
3. Vijaya Bank 6-14, Ground Floor, Debt raised as per As per provisional
Chirag Enclave, sanction letter dt. balance sheet
Nehru Place, New 14,08.2014. Cash, dated 14.03.2017 -
Credit Rs.14,14,71,500
(Hypothecation):
Rs.12.50 crores. As per notice under
Total Rs.12.50 Section 13(2) of
crores. SARFAESI Act, 2002
- Rs. 13,83,60,456
TOTAL DEBT Rs. 75,00,00,000
RAISED
(FINANCIAL
CREDITORS-
SECURED)
Amount as per Rs.79,32,48,652.04
books (Financial
Creditors)
Amount as per Rs.81,14,58,469.04
notice under
Section 13(2) of
SARFAESI Act,
2002
OPERATIONAL CREDITORS
1. Babita Jain 9-151, Gujrawalan Total debt (dues) Rs.5,000/-
Town, Part-1, raised: Rs.60,000/-
Delhi- 110009 Amount as per
books : Rs.5,000/-
2. Anurag Gupta L-13/3, DLF Phase-II, Total debt (dues) Rs. 10,000
Gurgaon, Haryana raised:
Rs. 1,20,000/-
Amount as per
books : Rs. 10,000/-
3. Shree 1157/1139, 2nd Floor, Total debt (dues) Rs. 4,18,46,700
Ashtvinayak Balajr Plaza, Kucha raised:
Gems & Stones Maharani Chandni Rs. 4,19,34,186
Private Limited Chowk, Delhi Amount as per
books:
Rs.4,16,46,700/-
4. Akriti Global Shop No, B0592, Total debt (dues) Rs.20,54,82,427
Traders Limited Nehru Ground, NET, raised:
Faridabad, Haryana Rs. 21,20,51,637

Amount as per
books :
Rs.20,54,82,427
5. Divakar Sales FF-9, Vishnu Place, Total debt (dues) Rs.3,44,82,063
Agencies Private Commercial Complex raised:
Limited 20B, Ajronda, Rs.3,48,74,855
Faridabad, Haryana Amount as per
books:
Rs.3,44,82,063
6. Forcible Tradecom B-106, Nehru Ground Total debt (dues) Rs.19,33,56,296
Private Limited NIT, Faridabad, raised:
Haryana Rs.19,42,84,593
Amount as per
books:
Rs.19,33,56,296
7. Horizon Global Plot No. 8, Sector-5, Total debt (dues) Rs. 38,98,049
Limited Mathura Road, raised:
Fandabad, Haryana Rs. 38,06,049
Amount as per
books :
Rs. 38,98,049
8. Preeti Tredelink DSS-45 & 46, Marble Total debt (dues) Rs. 1,50,900
Private Limited Market, Sector-21-C, raised: Rs.2,08,000
Faridabad, Haryana Amount as per
books: Rs.1,50,000
9. Shivansh Sales WCF-63, 1st Floor, Tolal debt (dues) Rs.3,79,60,928
Agencies Private Opposite Power Gen raised:
Limited Invertor, Mukesh Rs.3,38,95,718
Colony, Ballabgarh Amount as per
Faridabad, books :
Haryana- 121004 Rs. 3,79,60,926
10 Vaishnavi Tmt Booth No.29, Huda Total debt (dues) Rs.7,54,99,189
Bar & Private Market, Sector-02, raised:
Limited Ballabgarh Faridabad, Rs.7,63,48,295
Haryana-121004 Amount as per
books:
Rs.7,54,99,189
11 Gold Plus Glass Village- Thithaia, Tote] debt (dues) Rs.86,608
Industry Limited Roorke Laksar Road, raised:
Tehsil Roorkee, Rs.5,98,727.54
Haridwar, Amount as per
Uttarakhand-249401 books: Rs.86,603
12 Lakshmt Float A-2/10, DDA Marble Totel debt (dues) Rs.84,461
Glass Limited Market, Kirti Nagar, raised: Rs.6,95,214
New Delhi Amount as per
books: Rs.84,461
13 Service Tax - K-115, Site V, Kasna Total debt (dues) Rs.78,638
N.S. Electrical Industrial Area, raised; Rs.78,638
A Control System Greater NOIDA, Uttar Amount as per
Pradesh books : Rs.78,638
14 Service Tax - O.P. 304, Aggarwai Plaza, Total debt (dues) Rs.1,69,612
Furnisher Private Plot No. 11, raised: Rs.1,69,612
Limited Sector-10, Dwarka, Amount as per
New Delhi -110075 books: Rs.1,89,612
15 STL Holding SRS Tower, 3rd Floor, Amount as per Rs.2,11,48,360.54

Company Limited Near Mewla books:
Maharajpur Metro Rs. 2,11,48,360.54
Station, G.T. Road
Faridabad
16 New Vee Meters BFH 56, Shalimar Amount as per Rs.10,00,000
Bagh, Delhi-110088 books:
Rs.10,00,000
17 SRS Real SRS Tower, 3rd Floor, Amount as per Rs.21,700
Infrastructure Near Metro Station, books: Rs.21,700
Limited Mewla Maharajpur,
G.T. Road Faridabad,
Haryana-121003
18 Praveen Tayal TDS on Salary Amount as per Rs.27,000
books: Rs.27,000
19 Mohit PF Contribution Amount as per Rs.905
books: Rs.905
20 Praveen Tayal PF Contribtion Amount as per Rs.6,720
books: Rs.6,720
21 Mohit & Praveen Employer Contribution Amount as per Rs.5,078
Tayal to PF books: Rs.5,078
22 Mr. Mohil SRS Tower, Floor, Near Amount as par Rs.7,556
Metro Station, Mewla books: Rs.7,556
Maharajpur, G.T.
Road Faridabad,
Haryana-121003
23 Mr. Praveen Tayal House no 202, Amount as per Rs.72,964

Sector-9, Faridabad, books: Rs.72,964
Haryana-121006
24 State Value Added Tax Rs.29,15,216.82

Government
Total debt raised Total debt (dues)
from operational raised:
creditors Rs.60,42,17,524.54
Amount as per
books:
Rs.61,63,15,442.36
TOTAL DEBT RAISED TOTAL DEBT (DUES) Rs. 141,15,64,094.40
(FINANCIAL AND RAISED:
OPERATIONAL RS. AMOUNT AS
CREDITORS) PER BOOKS:
5. The learned counsel for the 'Applicant Company' would thus contend that
there are in all 24 operational creditors out of whom two creditors are in respect
of services i.e. lease rent but for these two operational creditors, the amount in
default is Rs. 5000 for Babita Jain and Rs. 10,000 for Anurag Gupta. There are
dues of the Central Government, State Government, employees and ex-Directors
of the company apart from other operational creditors from Sl. No. 3 to 17 and
addresses of these operational creditors are given in the list Annexure ‘B’. The
learned counsel further represents that as per Annexure ‘II’ the total amount in
default in respect of service is Rs. 15000/-. For sundry creditors, it is Rs.
61,52,80,002.94. There is also amount of more than Rs. 29 lacs in respect of
Government dues i.e. Value Added Tax (VAT). It is, thus, represented that total
amount of default in respect of financial and operational creditors would be
Rs.141.16 crores. The applicant has also attached the invoices/documents
evidencing the existence of the operational debt.
6. The "Applicant Company’ has also proposed the name of Interim Resolution
Professional (IRP) as Mr. Sameer Rastogi, F-116, Lajpat Nagar, Delhi-110024, email:
srastoqi@indiajuris.com. Registration No. IBBl/IPA-002/IP-00107/2016-17/1147.
Mr. Sameer Rastogi has also filed written communication in Form 2 of ‘the Rules’
to act as Interim Resolution Professional if an order admitting the application is
passed. He has also declared that he is eligible to be appointed as Resolution
Professional in respect of the ‘Corporate Debtor’ in accordance with the provisions
of Insolvency and Bankruptcy Board of India (Interim Resolution Process for
Corporate Persons) Regulations, 2018 (for brevity, ‘the Regulations’). Mr. Rastogi
has also declared that no disciplinary proceedings are pending with the Board of
ICAI. It is also declared that Mr. Rastogi is not presently serving as IRP/RP/Legislator
in any proceedings. Mr. Rastogi in his declaration has furnished toe complete
information with regard to to the paragraph (vi) of Form 2 to the effect that (a) he is
eligible to be appointed as an insolvency Resolution Professional of the applicant
in terms of Regulation 3 of the Insolvency and Bankruptcy Board of India (Insolvency
Resolution Process for Corporate Persons), Regulations 2016; (b) he is not a related
party of the Applicant Company; and (c) he is not an employee or promotor or a
partner etc. of the Applicant Company. He further undertakes to abide by the
Code of Conduct set out by Insolvency and Bankruptcy Board of India (Insolvency
Resolution Process for Corporate Persons), Regulations 2016. The office has also
verified the Registration number of Insolvency Professional from the website of
Insolvency and Bankruptcy Board of India.
7. The learned counsel further represents that due to default in making payments
of dues of financial institutions, the banks have Issued notices under Section 13(2)
of Securitisation and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 (SARFAESI Act, 2002). Punjab National Bank has issued such
notice dated 29.12.2016 which is part of Annexure ‘I’ calling upon the Applicant to
pay the amount of Rs. 26,89,14,258.84 within 60 days failing which the bank has
reserved the right to proceed further in terms of Section 13(4) of SARFAESI Act,
2002. In the meanwhile, the ‘Corporate Applicant’ has been directed not to transfer
the secured assets of the company without the written consent of the bank.
Similar notice dated 06.09.2016 at page 77 of the Paper Book was received from
Union Bank of India calling upon the Applicant to pay more than Rs. 40 crores by
treating the account of the Applicant as Non Performing Assets (NPA). Union Bank
of India also issued separate notice dated 06.09.2016 to the guarantors of the
"Applicant Company' under the aforesaid provisions. Learned counsel for the
Applicant also refers to the notice dated 21.01.2017 at page 92 of the Paper Book
sent by Vijaya Bank to the Applicant and others calling upon the 'Corporate
Debtor’ to pay the amount of more than Rs. 13.83 crores immediately.
8. Learned counsel for the "Applicant Company’ has further represented that an
the three financial institutions named above (consortium of banks) created
equitable mortgage in respect of the following properties by deposit of title deed
details of which are given In the tabulated form hereunder:-
Sr. Property address Area Sale deed Muta- Owner Name Valuation
No. tion No.
1. Land situated at 22 10861 & 7746 M/s. Dimension Rs. 42 crores

Village Prithla, Kanals 22/2/2007 Infrastructures (Rupees forty
Main Road, 5 Pvt Ltd. (now two crores only)
Delhi Agra Marlas merged in SRS
Road, Retreat
Distt. Services Ltd.)
Faridabad.
2. Land situated at 23 26498 & 9698 M/s. SRS Rs. 34.36

Village Bfiselwa, Kanals 19/3/2013 Retreat Services crores (Rupees
Faridabad. 3 Marlas Ltmited. thirty four crores
and 8 & thirty six lacs
kanals only)
18
marlas
3. Land situated at 11 10501 9337 M/s. Rabnoor Rs. 13.91 crores

Village Basetwa, Kanals (substitute Infra Build (P) (Rupees
Faridabad. 10 deed) Ltd. (new thirteen crores
Marlas merged into and ninety one
SRS Relreal lacs only)
Services
Limited)
Apart from the above, personal guarantees were also given by seven persons
details of which are tabulated hereunder:-
Sr. Name Address Given in Related

No. capacity of party or not.
1. Dr. Anil Jindal son of H. No.538, Sector As Promoter Related
Sh. G.S. Jindal 14, Faridabad. party
2. Dr. Sunii Jindal son of H. No.538, Sector As Promoter Related

Sh. G.S. Jindal 14, Faridabad. party
3. Sh. Praveen Taya son H. No. 202. Sector As Director Related party
of Sh. Nanak Ghand 09, Faridabad.
Tayal
4. Sh.Bhagwan Dass H, No. 2109, Sector As Director Related party

Gupta sen of 09, Faridabad.
Sh. Khushal Chand
5. Sh Stishil Singla son of H. No. D-477, Near As Director Related party

Sh. Trilok Chand Singla Kalott toandir, 30 Ft.
Road, Tuhtram
Colony, Paiwal.
6. SRS Retreat Services Ltd. 3rd Floor, SRS Tower, Group Corporate
Near Metro Station, Company Guarantee
Mewla Maharajpor,
G.T. Road, Faridabad.
7. Akriti Gbbal Traders Ltd. Akrit] Global Traders Corporate

Ltd. Guarantee.
9. It is represented that the estimated market value of the property i.e. commercial
land situated in Village Prithla measuring 22 kanals 5 Marlas is over Rs. 42
crores; that of the land measuring 28 kanals 8 marlas and balance ansa of 8
kanals 18 marlas owned by SRS Retreat Services Ltd. is Rs.34.38 crores and that of
11 kanal 10 marlas of land owned by the same Company is Rs. 13.91 crores as per
the creditors. Annexure 'E’ is the certificate of Registration for Creation/Modification
of Charge with the Registrar of Companies, Delhi.
10. The instant application has been filed in Form 6 in terms of Section 10 of ‘the
Code’ by the 'Corporate Debtor’. Section 10 of the Code’ is extracted hereunder:-
(1) Where a corporate debtor has committed a default, a corporate applicant/
hereof may file an application for initiating corporate insolvency resolution
such particulars ami in such manner and accompanied with such fee as
may be prescribed,
(b) the resolution professional proposed to he appointed as an interim

receipt of the applicationt by an order –
(b) reject the application, if it is incomplete.
Provided that Adjudicating Authority shall, before rejecting an application
Authority.
The above provision of 'the Code' discloses that the following procedures
are required to be completed by a 'Corporate Debtor’ for initiating the
process of insolvency:
(i) Existence of a ‘Corporate Debtor’
(ii) Such a 'Corporate Debtor’ must have committed a default,
(iii) On the satisfaction of (i) and (ii) above, a “Corporate Applicant" may
file an application for initiating Corporate Insolvency Resolution
Process.
(iv) Such an application as contemplated in (iii) above shall be filed in
such forms, containing such particulars and in such manner and
accompanied with such fee as may be prescribed.
(v) Along with the application as in (iv) above, information relating to
books of accounts and other documents relating to such period as
may be specified.
appointed as Interim Resolution Professional.
Section 10 of 'the Code' confers a discretion on this Tribunal to either admit or
reject the application and in case of rejection, to give an opportunity to the applicant
before such rejection, to rectify the defects within seven days from the date of
receipt of such notice from the Adjudicating Authority. The term 'Corporate Debtor'
has been defined under Section 3(8) of Part-I of ‘the Code’ to mean a Corporate
Person, who owes a debt to any person and ‘default' is defined under Section 3
(12) of Part-I of the Code’ to mean “non-payment of debt when whole or any part
or instalment of the amount of debt has become payable and is not repaid by the
debtor or the ‘Corporate Debtor', as the case may be”.
11. As provided in Rule 7(1) of the Rules, the “Corporate Applicant" has to make an
application under Section 10 of ‘the Code’ in Form 6 accompanied with documents
and records required therein and as specified in IBBI (Insolvency Resolution
Process for Corporate Persons) Regulations, 2016. Since I have already dealt in
detail in the opening paragraphs supra of this order relating to information
furnished, the same is not being repeated for the sake of brevity, as the essential
particulars as contemplated, have been provided by the Applicant.
12. In relation to the information relating to books of accounts, audited financial
statements have been filed for preceding two years ending 31.03.2015 and
31.03.2016 and unaudited provisional balance sheet for the period from 01.04.2016
to 14.03.2017 relating to the Financial Year 2016-17 are at Annexure V (colly).
These are duly audited financial statements and statement for the period 1.4.2016
to 14.03.2017 is certified by the Chartered Accountant. All the statements are
signed by authorised signatory of the ‘Corporate Applicant'.
13. It Is represented by the learned counsel for the 'Applicant’ that as per these
financial statements, following is the status of the ‘Applicant Company' under
different heads :
Accumulated profit/loss of the ‘corporate debtor’
As on 14.03.2017 _ Rs. 24,29,66,027.47/-
As on 31.03.2016 - Rs. 33,20,54,323.73/-
As on 31.03.2015 - Rs. 33,25,41,534.49/-
Net profit/Loss for the year
As on 14.03.2017 - Rs. (8,90,88,295.50/-)
As on 31.03.2016 - Rs. (4,87,210.76/-)
As on 31.03.2015 - Rs. 1,39,48,749.77/-
Expenses (including purchases of stock-in-trade)
As on 14.03.2017 - Rs. 1,45,11,29,479.48/-
As on 31.03.2016 - Rs. 5,46,69,48,212,66/-
As on 31.03.2015 - Rs. 5,22,29,40,041.86/-
Long Term Borrowings and other liabilities discloses the following for the above
years:
As on 14.03.2017 - Rs. 36,86,475.00/-

As on 31.03.2016 - Rs. 51,77,938,67/-
As on 31.03.2015 - Rs. 20,70,608.00/-
Current Liabilities
As on 14.03.2017 - Rs. 1,47.00,19,019.37/-
As on 31.03.2016 - Rs. 1,05,15,38,855.84/-
As on 31.03.2016 - Rs. 78,20,92,000.77/-
Revenue from Operations:
As on 14.032017 - Rs. 1,36,19,40,664.99/-
As on 31.03,2016 - Rs. 5,46,67,68,466.63/-
As on 31.03.2015 - Rs. 5,24,31,42,063.06/-
14. The figures extracted above would indicate the losses and fait in revenue
considerably. The ‘Applicant Company’ is facing the notice under SARFAESI Act,
2002, apart from huge amount of default committed in respect of operational
creditors.
15. In view of the aforesaid discussion, the instant petition deserves to be admitted.
It is, however, observed that the Applicant Company save some sketchy
particulars has not given any road map as to how it is going to keep itself afloat as
a going concern. However, keeping in perspective the objects for which ‘the
Code’ has been brought into force and to balance the interest of all stakeholders,
I am satisfied that the instant application warrants to be admitted to prevent
further erosion of capital and to safeguard toe assets of the Applicant Company/
Corporate Debtor, For the reasons aforementioned while admitting the application,
the following directions are issued :
(i) Appoint Mr. Sameer Rastogi, F-116, Lajpat Nagar, Lajpat Nagar, Delhi-
110024 Mobile No. 9818685399, email: srastogi@indiajuris.com
Registration No. IBBI/IPA-002/IP-GO/07/2016-17/1147, a Registered
Insolvency Professional (IRP) as the Interim Resolution Professional as
contemplated under Section 16 of the Code' and his term of appointment
be determined by the Committee of Creditors whichever is earlier;
(ii) In terms of Section 17 of ‘the Code', from the date of his appointment, the
Professional and the officers and the managers of the 'Corporate Debtor'
shall report to the interim Resolution Professional, who shall be enjoined
to exercise all the powers as are vested with Interim Resolution

Professional and strictly perform all the duties as are enjoined on the
interim Resolution Professional under Section 18 and other relevant
provisions of 'the Code’, including taking control and custody of the assets
over which the ‘Corporate Debtor’ has ownership rights recorded in the
balance sheet of the 'Corporate Debtor’ etc. as provided in Section 18(1)(f)
of thwe Code'. The Interim Resolution Professional Is directed to prepare
a complete list of inventory of assets of the Corporate Debtor’.
(iii) The Interim Resolution Professional shall strictly act in accordance with
the Code’, ail the rules framed thereunder by the Board or the Central
Government and in accordance with the Code of Conduct governing his
and moral.
(iv) The Interim Resolution Professional shall endeavour to constitute the
Committee of Creditors at the earliest but not later than 15 days from the
date of this Order.
(v) It is hereby directed that the ‘Corporate Debtor’, its properties, personnel
to the interim Resolution Professional in managing the affairs of the
'Corporate Debtor’ as a going concern and extend all cooperation in
accessing books and records as well as assets of the 'Corporate Debtor’.
16. I further declare a moratorium in relation to the following matters as
contemplated under Section 14 of ‘the Code’ as under –
against the ‘Corporate Debtor’ including execution of any judgement,
decree or order in any Court of Law, Tribunal, Arbitration panel or other
Authority;
(b) Transferring, encumbering, alienating or disposing of by the ‘Corporate
Debtor’ any of its assets or any legal right or beneficial interest therein;
by the 'Corporate Debtor’ in respect of its property including any action
under the Securitisation and Reconstruction of Financial Assets and
(d) The recovery of any property by any owner or lessor or where such property
is occupied by or in the possession of the 'Corporate Debtor’.
17. The Interim Resolution Professional appointed by this Tribunal is also directed
to cause a public announcement within 3 days from the date of this order as

the initiation of Corporate Insolvency Resolution Process in terms of Section 13 (1)
(b) of 'the Code’ read with Section 15 calling for the submission of claims against
the 'Corporate Debtor’.
18. It is further directed that the interim Resolution Professional shall positively file
a report of events before this Tribunal every week in relation to the 'Corporate
Debtor’. Copy of this order be supplied to the Authorised Representative of applicant
immediately who shall deliver a copy instantly to the Interim Resolution
Professional.
(Justice R.P. Nagrath)
Member (Judicial)
April 17, 2017
M/S SKYBLUE PAPERS PVT. LTD

Name of the Corporate Debtor/ M/s Skyblue Papers Pvt. Ltd.
Applicant
Company Petition No. C.P.(IB) No.09/Chd/CHD/2017


1. M/s. Skyblue Papers Private Limited (“Corporate Debtor” or “CD”)filed the
present application for initiation of insolvency process against itself. It
stated in the application that the amount of total default with regard to
secured, unsecured creditors and operational creditors is Rs. 18.29 crores.
2. It is stated that due to default in making the payment of dues to PNB, PNB
had issued notice dated 17.06.2016 under section 13(2) SARFAESI calling
upon CD to pay Rs. 16.71 crores. By way of primary security, PNB has
charge over the entire current assets of CD and collateral security was
created by way of equitable charge of residential house of one Parkash
Sakiani.
3. Other mortgages have also been described in the application including
banks.
4. The CD also filed its books of accounts, audited financial statements for
preceding two years ending 31.03.2015 and 31.03.2016 and unaudited
provisional balance sheet for period 01.04.2016 to 24.03.2017.

A. The Bench took note of the all the documents filed along with the application
and held that it clearly indicated that the CD had been running in losses
and there was fall in revenue. The CD had fallen in debt trap and is thus
competent to set in motion the insolvency process.
B. However, the Bench noted that save some sketchy particulars, the CD
had not given any road map as to how it is going to keep itself afloat as a
going concern. However, keeping in perspective the objects for which the
Code was brought in force, the application was admitted
C. The Bench issued following directions:

i. Appointed Mr. Jalesh Kumar Grover as an Interim Resolution
Professional who shall act strictly according to the Code.
ii. Suspended the powers of the Board of Directors which shall be
exercised by the Insolvency Professional Agency.
iii. The Interim Resolution Professional shall constitute the committee
of creditors within 3 weeks from the order.
iv. Interim Resolution Professional was directed to cause a public
announcement immediately as contemplated under section 13 of
the Code within three days from the date of the order.
v. Directed Interim Resolution Professional to report to the Tribunal
every week in relation to “corporate debtor”
vi. Corporate debtor, its properties, personnel and persons in the
management shall co-operate with Interim Resolution Professional.
Declared Moratorium as contemplated under section 14 of the Code

CP (IB) NO. 09/Chd/CHD/2017
Coram:
HON’BLE MR. JUSTICE R.P. NAGRATH, MEMBER (JUDICIAL)
HON’BLE DEEPA KRISHAN, MEMBER (TECHNICAL)
In the matter of :
Sky Blue Papers Pvt. Ltd.
Plot No.85, Industrial Area, Phase I
Chandigarh
.... Corporate Applicant/Debtor
Application for initiating Corporate Insolvency Resolution Process u/s 10 of the
Bankruptcy Code, 2016 and u/s 13 and 14 of the Code for grant of moratorium.
Present :
For applicant : Mr. G.S. Sarin, Practising Company Secretary and Mr. Jalesh Kumar
Grover, Insolvency Professional for Applicant/Debtor.
ORDER
Justice R.P.NAGRATH, Member (Judicial):

This is an application filed by M/s Sky Blue Papers Private Limited a 'Corporate
Debtor 'itself in Form 6 as prescribed by sub-rule (1) of Rule 7 of the Insolvency
and Bankruptcy (Application to Adjudicating Authority), Rules, 2016 (for brevity,
'the Rules') for initiating corporate insolvency resolution process. This form is
filed with the application under Sections 10, 13 and 14 of the Insolvency and
Bankruptcy Code, 2016 (for brevity, 'the Code') at the instance of the "Corporate
Applicant, The 'Corporate Debtor' also falls within the term "Corporate Applicant"
as defined in sub-section (5) of Section 5 of 'the Code'.
2. It is represented by Mr G.S. Sarin, Practising Company Secretary, Authorised
Representative that the Applicant Company was incorporated on 06.03.2014
with the Registrar of Companies, Punjab and Chandigarh. The certificate of
incorporation along with the Memorandum & Articles of Association of the
Applicant Company is part of Annexure VI-B. The Applicant Company has been
allotted Corporate Identity Number (CIN- U21029CH2014PTC035005). The
authorised share capital of the Company is Rs. 2,50,00,000 consisting of 25,00,000

equity shares of Rs. 10/- each. Its subscribed and paid-up share capital is Rs.
2,35,00,000/- divided into 23,50,000 equity shares of the said value each. There
are presently two Directors of the Applicant Company viz. Ashwani Soni and Sahil
Arora, both Promoter Directors having separate DIN numbers. The above Directors
are the only shareholders of the company as per the list Annexure VI-F and Sahil
Arora is having 80.85% of the shareholding.
3. Annexure VII-A is the extract of Board of Directors Resolution dated 20.03.2017,
authorising Ashwani Soni, Director of the company to file application under Section
10 of 'the Code' and Rules framed thereunder to initiate insolvency resolution
process of the Company before the Tribunal. Ashwani Soni has also been
authorised to accept service of process under 'the Code' on behalf of the 'Corporate
Debtor'.
4. It is represented that the Applicant Company has the following financial
creditors:-
Sl. Name of the Address Total debt Amount in
No. Bank / Unsecured default
Creditors
SECURED CREDITORS
1. Punjab National Large Corporate Debt raised as Rs. 16.71

Bank Branch, Sector per sanction letter crs.
17-B. dt.03.04.2014.
Chandigarh CC Limits: Rs. 4.00 crs.
160017 TL Rs. 4 40 crs.
ILC/FLC Rs. 08.00 crs.
Total Rs. 16.40 crs.
Amount o/s as per
books: Rs. 16.71 crs.
2. Kotak Mahindra SCO 153-154, Top Debt raised as per Nil

Prime Ltd. Floor. Sector-9, sanction letter
Madhya Marg, dt.01.09.2015.
Chandigarh Car Loan: Rs.00.14 crs.
160017 Total Rs. 00.14 crs.
Amount o/s as per
books : Rs. 00.08 crs.
3. Tata Capital SCO 147-148, Debt raised as per Nil

Financial Services Sector 9C, sanction letter dt.
Ltd. Madhya Marg, 19.08.2015.

Chandigarh Car Loan: Rs. 00.06 crs.
160017 Total Rs. 00.06 crs.
Amount o/s as per
books : Rs. 00.02 crs.
TOTAL DEBT RAISED Rs. 16.60 crs. Rs. 16.71

(FINANCIAL crs.
CREDITORS-
SECURED)
Amount as per Rs. 16.81 crs.

books (Financial
Creditors)
UNSECURED CREDITORS
1 Ashwani Soni H. No.318, Sector Total: Rs. 00.27 crs. Nil

15-A.
Chandigarh-
160015.
2. Sahil Arora 2/4, Gali Gandha Total: Rs.03.30 crs. Nil

Wali. Chowk,
Namak Mandi,
Amritsar (Pb.)
Total: Rs. 03.57 crs. Nil
1. Govt. Departments Details given in Total debt (dues) Rs.01.58 crs.

list attached as raised: Rs.1.58 crs.
Annexure II A Amount as per books :
Rs. 1.58 crs.
2 Raw material Details given in Total debt (dues) raised: Nil

suppliers list attached as Rs. 0.18 Crs.
Annexure II D Amount as per books
Rs. 0.18 crs.
3. Workers/ Details given in Total debt (dues) raised : Nil

Employees list attached as Rs. 0.01 crs.
Annexure II E Amount as per books.
Rs. 0.01 crs.
4. Service providers Details given in Total debt (dues) Nil

list as attached raised: Rs.0.12 crs.
Annexure II F Amount as per books
Rs. 0.12 crs.
Total debt raised Total debt (dues) Rs. 1.58 crs.

from operational raised Rs 1.89 crs.
creditors Amount as per books:
Rs.1.89 crs.
TOTAL DEBT TOTAL DEBT (DUES) Rs. 18.29

RAISED RAISED: Rs. l8.48 crs. crs.
(FINANCIAL AND AMOUNT AS PER
OPERATIONAL BOOKS :Rs. 19.96 crs.
CREDITORS)
It is stated that the total amount of default in respect of Financial and Operational
Creditors is Rs. 18.29 crores.
5. The applicant has also proposed the name of Interim Resolution Professional (IRP) as
Mr, Jalesh Kumar Grover resident of House No.202, GH-40, Sector 20, Panchkula-
134113 (Haryana), Mobile No.09501081808, email: jk.grover27@gmail.com having
Registration No.lBBI/IPA-001/IP-00136/2016-17/1259. Mr, Jalesh Kumar Grover has
also filed written communication in Form 2 of the Rules' to act as Insolvency
Resolution Professional, if an order admitting the application, is passed. He has
also declared that he is eligible to be appointed as Resolution Professional in
respect of 'Corporate Debtor' in accordance with the provisions of the Insolvency
and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons)
Regulations, 2016. Mr. Jalesh Kumar Grover has also declared that no disciplinary
proceedings are pending against him with the Board or Indian Institute of Insolvency
Professionals of ICAI. It is also declared that Mr. Jalesh Kumar Grover is not presently
serving as Interim Resolution Professional/Resolution Professional/Liquidator in
any proceedings. Mr. Jalesh Kumar Grover in his declaration has furnished
complete information with regard to the paragraph (vi) of Form 2 to the effect that (a)
he is eligible to be appointed as an insolvency Resolution Professional of the
applicant in terms of Regulation 3 of the Insolvency and Bankruptcy Board of India
(Insolvency Resolution Process for Corporate Persons), Regulations 2016; (b) he is
not a related party of the Applicant Company; and (c) he is not an employee or
promotor or a partner etc. of the Applicant Company. He further undertakes to
abide by the Code of Conduct set out by Insolvency and Bankruptcy Board of India
(insolvency Resolution Process for Corporate Persons), Regulations 2016. The office
has also verified the Registration number of Insolvency Professional from the website
of Insolvency and Bankruptcy Board of India.
6. The applicant further represents that due to default in making the payment of
dues to the Punjab National Bank, it has issued notice dated 17.06.2016 under
Section 13 (2) of SARFAESI Act, 2002 Annexure l-B calling upon the 'Corporate
Debtor' to pay an amount of Rs. 16,71,31,522.70. The reference was made in this
notice to the primary collateral security which the debtor has furnished for the
said loan. It was directed that the 'Corporate Debtor' shall not transfer by way of
sale, lease or otherwise (except in the ordinary course of business) any of the
secured assets without the prior consent in writing from the bank, it is further
represented that the bank issued another notice dated 14.02.2017 under Section
13 (4 ) of the SARFAESI Act, 2002 which is a part of the Annexure 1-B (colly) vide
which the bank has called upon the 'Corporate Debtor' and its Directors to deliver
possession of the secured assets of the 'Corporate Debtor', before 15.03.2017
failing which the authorised officer of the bank was supposed to take possession
of the secured assets on or after the said date during the time specified therein.
7. It is also represented that by way of primary security the bank has charge over
the entire current assets of the company comprising of the raw material, stock in
process, finished goods etc. and the entire fixed assets/block of assets of the
company. By way of collateral security equitable charge on immovable property
comprising of residential House on Plot measuring 2 biswas situated in Sub
Tehsil Zirakpur, Tehsil Derabassi, District Mohali in the ownership of Parkash
Saklani S/o Lai Singh was created by deposit of sale deed dated 29.11,2004 and
its estimated value is Rs. 0.66 crores as per the valuation report dated 20.10.2014
obtained by the bank. The valuation report is at Annexure I-D.
8. Equitable mortgage of property consisting of residential plot measuring 7
marla situated in Village Karora, Sub Tehsil Majri, Tehsil Kharar, Distt. Mohali in
the name of Kanchan Saklani was also created by deposit of sale deed dated
23.02.2007 and the estimated value of this asset is Rs. 0.50 crores as per the
valuation report dated 20.10.2014 Annexure l-E. The estimated value of the fixed
assets of the company are stated to be Rs. 11.37 crores. Copy of the sanction letter
dated 03.04.2014 issued by Punjab National Bank is at Annexure l-A.
9. Apart from the above, personal guarantee was also furnished by Sunil Guglani
in respect of loan. The net worth of personal guarantee is Rs. 20.53 crores and
immovable property valued at Rs. 11.50 crores as on 10.12.2013. Personal
guarantee has also been furnished by Sahil Arora and the bank mentioned the
net worth of Rs. 4.10 crores vide sanction letter dated 31.03.2014. Ashwani Soni
also furnished bank guarantee of the net worth of Rs. 0.47 crores as per sanction
letter dated 03.04.2014.
10. Other mortgages have also been described in the petition including banks.
The default in respect of the loan sanctioned by Kotak Mahindra Bank and Tata
Capital Financial Services Ltd. is stated to be nil, so no details thereof are being
given.
11. The 'Corporate Debtor' has also attached the Certificate of charge issued by
Registrar of Companies as Annexure 1-F. As per this document the charge was
created on 03.04.2014 in favour of Punjab National Bank.
12. The instant application has been filed in Form 6 in terms of Section 10 of 'the
Code' by the 'Corporate Debtor'. Section 10 of 'the Code' is extracted hereunder:-
may be presented.
information relating to—
receipt of the application, by an order-
Provided that Adjudicating Authority shall, before rejecting an application
Authority.
The above provision of 'the Code' discloses that the following procedures are
required to be completed by a 'Corporate Debtor' for initiating the process of
insolvency:
(i) Existence of a 'Corporate Debtor'
(ii) Such a 'Corporate Debtor' must have committed a default.
(iii) On the satisfaction of (i) and (ii) above, a "Corporate Applicant" may file an
account and other documents relating to such period as may be specified.
appointed as Interim Resolution Professional
Section 10 of 'the Code' confers a discretion on this Tribunal to either admit or
reject the application and in case of rejection, to give an opportunity to the applicant
before such rejection, to rectify the defects within seven days from the date of
receipt of such notice from the Adjudicating Authority. The term 'Corporate Debtor'
has been defined under Section 3 (8) of Part-1 of 'the Code' to mean a Corporate
Person, who owes a debt to any person and 'default' is defined under Section 3
(12) of Part-I of 'the Code' to mean "non-payment of debt when whole or any part
or instalment of the amount of debt has become payable and is not repaid by the
debtor or the 'Corporate Debtor', as the case may be".
13. As provided in Rule 7 (1) of the Rules, the "Corporate Applicant" has to make an
application under Section 10 of the Code' in Form 6 accompanied with documents
Process for Corporate Persons) Regulations, 2016. Since we have already dealt in
furnished, we are not repeating the same for sake of brevity, as the essential
14. In relation to the information relating to books of account, audited financial
statements have been filed for preceding two years ending 31.03.2015 and
31.03.2016 and unaudited provisional balance sheet for the period from 01.04.2016
to 24.03.2017 relating to the Financial Year 2016-17 are also attached. These are
Annexures V-A, V-B and V-C. respectively. All the statements are attested by
authorised signatory of the "Corporate Applicant".
15. When the matter was first listed on 30.03.2017 it was noticed that the affidavit
in support of Form 6 was not in the prescribed format which was required to be
filed afresh. The applicant has complied with the aforesaid direction and filed
fresh affidavit of Ashwani Soni, Director of the 'Corporate Debtor'.
16. It is represented by Mr G.S. Sarin, Practising Company Secretary that as per
financial statement, following is the status of the Applicant Company under different
heads:-
Revenue Amount in Rs.
As on 28.02.2017 72712879
As on 31.03.2016 155802220
As on 31.03.2015 90587389
Accumulated Profit & Loss of the Corporate Debtor Amount in Rs.
As on 28.02.2017 -24557611
As on 31.03.2016 -9627851
As on 31.03.2015 -3993640
Long Term Borrowings and other liabilities Amount in Rs.
As on 28.02.2017 122496804
As on 31.03.2016 115476888
AS on 31.03.2015 11643371
Currant Liabilities Amount in Rs.
As on 28.02.2017 87631081
As on 31.03.2016 117814099
As on 31.03.2015 63408465
17. The figures extracted above indicate the losses and fall in revenue. It seems
that the applicant has fallen into debt trap and is competent to set in motion the
insolvency resolution process as contemplated under the Code'. On the basis of
the aforesaid statements the total debt raised by the 'Corporate Applicant' with
regard to the financial and operational creditors is Rs. 18.48 crores and it is further
represented that the total amount of default is Rs.18.29 crores.
18. In view of the aforesaid discussion, the instant petition deserves to be admitted,
it is, however, observed that the Applicant Company save some sketchy
particulars has not given any road map as to how it is going to keep itself afloat as
a going concern. However, keeping in perspective the objects for which 'the
Code' has been brought into force and to balance the interest of all stakeholders,
we are satisfied that the instant application warrants to be admitted to prevent
further erosion of capital and to safeguard the assets of the Applicant Company/
Corporate Debtor. For the reasons aforementioned while admitting the application,
we issue the following directions:-
(i) Appoint Mr. Jalesh Kumar Grover resident of House No.202, GH No,40,
Sector 20, Panchkula-134113 (Haryana), Mobile No.09501081808, email;
jk.grover27@gmail.com Registration No. IBBI/IPA-001/IP-00136/2016-17/
1259, a Registered insolvency Professional (IRP) as the Interim Resolution
Professional as contemplated under Section 16 of 'the Code' and his term
of appointment shall be for a period of thirty days from the date of this
order or as may be determined by the Committee of Creditors whichever
is earlier;
(ii) In terms of Section 17 of 'the Code', from the date of his appointment, the
Professional and the officers and the managers of the 'Corporate Debtor'
shall report to the interim Resolution Professional, who shall be enjoined
to exercise all the powers as are vested with Interim Resolution
Professional and strictly perform all the duties as are enjoined on the
Interim Resolution Professional under Section 18 and other relevant
provisions of 'the Code', including taking control and custody of the assets
over which the 'Corporate Debtor' has ownership rights recorded in the
balance sheet of the 'Corporate Debtor' etc. as provided in Section 18 (1) (f)
of 'the Code', The Interim Resolution Professional is directed to prepare a
complete list of inventory of assets of the 'Corporate Debtor'.
'the Code', all the rules framed thereunder by the Board or the Central
and moral.
Committee of Creditors at the earliest but not later than three weeks from
the date of this Order.
(v) It is hereby directed that the 'Corporate Debtor', its properties, personnel
'Corporate Debtor' as a going concern and extend all cooperation in
accessing books and records as well as assets of the 'Corporate Debtor'.
19. We further declare a moratorium in relation to the following matters as
contemplated under Section 14 of 'the Code' as under:-
against the 'Corporate Debtor' including execution of any judgment, decree
or order in any Court of Law, Tribunal, Arbitration panel or other Authority;

(b) Transferring, encumbering, alienating or disposing of by the 'Corporate
Debtor' any of its assets or any legal right or beneficial interest therein;
by the 'Corporate Debtor' in respect of its property including any action
is occupied by or in the possession of the 'Corporate Debtor'.
(b) of 'the Code' read with Section 15 calling for the submission of claims against
the 'Corporate Debtor'.
21. It is further directed that the Interim Resolution Professional shall positively file
a report of events before this Tribunal every week in relation to the 'Corporate
Debtor'. Copy of this order be supplied to the Authorised Representative of applicant
immediately who shall deliver a copy instantly to the Interim Resolution
Professional.
(DEEPA KRISHAN) (JUSTICE R.P. NAGRATH)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
April 07, 2017
SUPER MULTICOLOR PRINTERS PVT. LTD

Name of the Corporate Debtor/ M/s Super Multicolor Printers Pvt. Ltd.
Applicant
Company Petition No. C.P.(IB) No.08/Chd/CHD/2017


1. M/s Super Multicolor Printers Private Limited (“Corporate Debtor” or “CD”)
was incorporated on 06.03.2014 with Registrar of Companies, Punjab,
Himachal Pradesh and Chandigarh.
2. In the application, it mentioned that the total debt raised from financial
creditors is Rs. 206.64 crores, whereas the amount in default is
Rs.200.37.Default in respect of government dues are Rs. 0.55 crores,
Rs.9.25 crores towards the operational creditors, Rs.0.22 crores in respect
of workers’ dues and Rs. 0.32 crores in respect of service providers.
3. On account of default in payment of dues, the creditors had also issued a
notice to CD under section 13(2) and section 13(4) of the SARFESI Act, 2002
for the payment of defaulted amount. Since the CD was not in position to
repay its debts, it filed a reference before BIFR which was registered as
case no. 171/2015 which got abated by coming into force of SICA (Special
Provisions) Repeal Act, 2003 and consequent dissolution of BIFR.
4. CD contended that he was willing to negotiate with the financial creditors
for settlement of dues, in case the IRP is appointed in terms of the Code.
5. The CD proposed the name of Mr. Prakash Dev Sharmafor appointment
as interim resolution professional who gave necessary declarations under
the Code

A. The Bench took note of the all the documents filed along with the application
and held that it clearly indicated that the CD had been running in losses
and there was fall in revenue. The CD had fallen in debt trap and is thus
competent to set in motion the insolvency resolution process.
B. However, the Bench noted that save some sketchy particulars, the CD
had not given any road map as to how it is going to keep itself afloat as a
going concern. However, keeping in view the objects for which the Code
was enacted, the application was admitted
i. Appointed Mr. Prakash Dev Sharma as an Interim Resolution
Professional.
ii. Suspended the powers of the Board of Directors which shall be
exercised by the Insolvency Resolution Professional.
iii. The Interim Resolution Professional shall constitute the committee
of creditors within 3 weeks from the order.
iv. Interim Resolution Professional was directed to cause a public
announcement immediately as contemplated under section 13 of
the Code within three days from the date of the order.
v. Directed Interim Resolution Professional to report to the Tribunal
every week
vi. Directed that the corporate debtor, its, personnel and persons in the
management shall co-operate with Interim Resolution Professional.
Declared a Moratorium as contemplated under section 14 of the
Code.

CP (IB) No.8/Chd/CHD/2017
Coram:
HON’BLE MR. JUSTICE R.P. NAGRATH, MEMBER (JUDICIAL).
HON’BLE MS. DEEPA KRISHAN, MEMBER (TECHNICAL).
In the matter of :
Super Multicolor Printers Pvt Ltd.
Plot No.104, Industrial Area Phase-/ Chandigarh (Punjab).
....Corporate Applicant/Debtor.
Application for initiating Corporate Insolvency Resolution Process in respect of
Super Multicolor Printers Pvt. Ltd. under the Insolvency and Bankruptcy Code,
2016.
Present : For Applicant, Mr. G.S. Sarin, Practising Company Secretary and Mr.
Prakash Dev Sharma, Insolvency Professional for Applicant/Debtor
ORDER
JUSTICE R.P NAGRATH, MEMBER (JUDICIAL)

This is an application filed by Super Mutticour Printers Pvt. Ltd., a "Corporate
Debtor" itself under Section 10 of Insolvency and Bankruptcy Code, 2016 (for
brevity to be referred hereinafter as 'the Code’). In statutory form No.6 as prescribed
by sub-rule (1) of rule 7 of the Insolvency and Bankruptcy (Application to
Adjudicating Authority) Rules, 2016 (for brevity 'Rules') for initiating corporate
insolvency resolution process, The 'Corporate Debtor’ a/so falls within the term
“Corporate Applicant” as defined in sub-section (5) of Section 5 of ‘the Code’.
During hearing of the petition on 05.04.2017, it was pointed out to Mr. G.S. Sarin,
the practising company secretary, the authorised representative of the applicant,
that the affidavit in support of form No.6 is not in the prescribed format and
verification is also not given with respect to certain paragraphs on the basis of
knowledge and others on the basis of belief. It was also pointed out that the
communication by the proposed insolvency Professional in form No.2 is also
incomplete and that the list of workers / employees mentioned at Page 283 does
not contain their complete address. It was directed that the corporate applicant
shall file the revised form No.6 containing these details and the documents along
with the affidavit of Mr. S.K. Guglani, Director. The compliance has been made.
2. It is represented by Mr. Sarin that the applicant company was incorporated on

21.7.1992 with the Registrar of Companies, Punjab, Himachal Pradesh and
Chandigarh at Jalandhar. Copy of certificate of incorporation with the Memorandum
and Articles of Association is also attached. It is stated that the applicant has
been allotted GIN No. U74300CH1992PTC012491. The authorised share capital
of applicant company is Rs.6,00,00,000 i.e. 60,00,000 equity shares of Rs.10
each and its paid up capital Is Rs.5,45,77,750 i.e. 5,39,111 equity shares of Rs.100
each and 13,333 equity shares of Rs.50 each. The applicant claims that presently
the company has on its Board two Directors, namely; Sunil Guglani, Managing
Director and Suman Guglani, Director. The list of directors with their distinct DIN
numbers has been filed at Page 474 of the application with the affidavit dated
14.03.2017 of Sunil Guglani. There are in all 43 shareholders of the company, as
per list of shareholders at Annexure VI(F). According to the applicant, the registered
office of the 'Corporate Debtor’ is situated at Chandigarh and therefore, this Bench
has the territorial jurisdiction to entertain and dispose of this petition.
3. The extract of the Resolution passed by the Board of Directors of the company
dated 20.03.2017 is at page 434 whereby Mr. Sunil Guglani, Director of the
company is authorised to initiate corporate insolvency resolution process as
corporate applicant on behalf of the company and also to accept service of
process on behalf of the corporate debtor.
The applicant company has mentioned the residential address of Sunil Guglani
in item No.2(1) of form No.6 (placed at page 10 of the application) and also the
address of registered office of toe company along with email address for service
of the process on behalf of the company.
4. It is further represented by the corporate applicant that the applicant company
has the following financial and operational creditors :
Sl. Name of the Address Total debt Amount in
No. Bank / Unsecured default
Creditors
SECURED CREDITORS
1. Punjab National Large Corporate Debt raised as per Rs.116.70

Bank Branch, Sector sanction letter dt. crs.
17-B, Chandigarh 28.3.2015,
160017 CC Limits : Rs.40.64 crs.
NFB:Rs.00,56 era.
WCTL-I: Rs.44.36 era,
WCTL-II: Rs.10.00 crs.
FITL Rs.16,63 era.
TL Rs.11.18 era,
Total Rs.124.37 era,
Amout o/s as per

books : Rs.118.60 crs.
2. Canara Bank Large Corporate Debt raised as per Rs.67,12 crs.
Branch, Plot No.01, sanction tetter
Sector 34-A, dt. 11.6.2015.
Chandigarh CC Limits: Rs.14.58 crs.
160034 WCTL-l: Rs.15.92 crs.
WCTL-ll Rs.26.60 crs.
FITL: Rs. 10.24 cm.
Total Rs.67.34 era.
Amout oft at per books :
Rs.72.55 ere.
3. ICICI Bank SCO 129-120, 2nd Debt raised as per Rs.8.15 crs.
floor, Sector 9, sanction letter
Chandigarh 160017 dt.31.3.2015.
CC Limits: Rs.1.02 crs.
WCTL Rs.6.05 crs.
FITL: Rs.1.42 crs.
Total Rs.8.67 crs.
Amout o/s as per books :
Rs. 8.98 crs.
4 Siemens Financial 130 Pandurang Debt raised as per Rs.6.40 crs.
Services Ltd. Budhikar Marg, sanction letter
Worli, Mumbai dt. 21.5.2015,
400016. T/L: Rs.6.26 crs.
Total Rs.6.26 crs.
Amout o/s as per books:
Rs.6.32 crs.
TOTAL DEBT RAISED Rs.206.64 crs. Rs.200.37
(FINANCIAL crs.
CREDITORS)
Amount as per Rs.206.45 crs.
books (Financial
Creditors)
Govt. Departments Total debt idues) raised: Rs.14.53

Rs.0.55 crs. crs
Amount as per books :
Rs.0.55 crs.
Raw material Tota/ debt (dues) raised: Rs. 0.12 crs.
suppliers Rs.9.25 Crs.
Rs. 9.25 crs.
Workers/Employees Total debt (dues) raised: Nil
Rs.0.22 crs.
Rs..0.22 crs.
Service providers Total debt (duos) raised: Rs. 0.04
Rs.0.32 crs. crs.

Rs.0.32 crs.
Total debt raised Total debt (dues) raised : Rs.14,69
from operational Rs.10.34 crs. crs.
creditors Amount as per books:
Rs..10.34 crs.
TOTAL DEBT RAISED TOTAL DEBT (DUES) Rs.215.06
(FINANCIAL AND RAISED: RS.216.98 crs. crs..
OPERATIONAL AMOUNT AS PER BOOKS:
CREDITORS) Rs..216.79 crs.
It is thus, submitted that the total debt raised from financial creditors is Rs.206.64
crores, whereas the amount in default is Rs.200.37 crores. The public deposits
are shown as Nil. It is represented that there is default of an amount of crores, in
respect of Government dues as per list Annexure II(A); Rs.9.25 crores towards
operational creditors (Raw Material) as per list Annexure II (M); Rs.0.22 crores
towards workers' dues as per list Annexure II (P) and the default in respect of
service providers dues to the tune of Rs.0.32 crores.
5. The applicant has proposed the name of Interim Resolution Professional as
Mr. Prakash Dev Sharma, 97, Sukhna Enclave, Kalmbwala Road, Kansal, Distt
Mohali (Punjab, having email-ad dress ip40ibbi@qmail.com Registration No.IBBI/
IPA-002/IP-00020/2016-17/1561. The Insolvency Professional has also filed the
written communication in form No-2 of Rules, Annexure-III to act as Insolvency
Professional, if an order admitting the instant petition is passed.
6. Insolvency Professional has also declared that he is eligible to be appointed
as a resolution professional in respect of 'Corporate Debtor’ in accordance with
the provisions of the Insolvency and Bankruptcy Board of India (Insolvency
Resolution Process for Corporate Persons) Regulations, 2016. He has also declared
that no disciplinary proceedings are pending against him with the Board or Indian
Institute of Insolvency Professionals of ICAI. It is also declared that Mr. Prakash
Dov Sharma is not presently serving as Interim Resolution Professional/Resolution
Professional/Liquidator in any proceedings. It is stated by the proposed Interim
Professional (IP) that he is competent to function as Interim insolvency Professional
as required by IBBI (Insolvency Professional) Regulation, 2016. It is represented
that this declaration is duly signed and certified by Mr. Prakash Dev Sharma.
7. The applicant further represents that due to the defaults committed in payment
of dues of Punjab National Bank, a notice dated 31.5.2016 was issued under
Section 13(2) of SARFAESI, 2002 and notice dated 29.9.2016 issued under section
13(4) of Securitisation and Reconstruction of Assets and Enforcement of Security
Interest Act, 2002 (SARFAESI Act, 2002) was issued for an amount of Rs.118.70
crores [Annexure I(C)).
Further, applicant further represents that duo to the defaults committed in payment
of dues of Canara Bank, a notice dated 06.6.2016 issued under Section 13{2) of
SARFAESI, 2002 and notice dated 29.9.2010 Issued under section 13(4) of
Securitisation and Reconstruction of Assets and Enforcement of Security interest
Act, 2002 (SARFAESI Act, 2002) was issued for an amount of Rs.67.12 crores
[Annexure 1(G) and Annexure I(C)].
The applicant further represents that due to the defaults committed In payment of
dues of ICICI Bank, a notice dated 09.3.2016 was issued under Section 13(2) and
notice dated 29.9.2016 issued under section 13(4) of Securitisation and
Reconstruction of Assets and Enforcement of Security Interest Act, 2002 (SARFAESI
Act, 2002) for an amount of Rs.8.15 crores [Annexure 1(K) and Annexure I(C)].
It is seen that the corporate applicant has annexed with the application, only one
combined notice under section 13(4) of SARFAESI Act, 2002 dated 29.09.2016
issued by Punjab National Bank. This notice included the following details of
credit facilities availed by the corporate applicant’
1. Punjab National Bank Rs.118.70 crores
2. Canara Bank Rs.67.12 crores
3. ICICI Bank Ltd. Rs.8.15 crores
The applicant further represents that due to the defaults committed in payment of
dues of Siemens Financial Services Limited, a notice dated 13.12.2016 was issued
under Section 13(2) of Securitisation and Reconstruction of Assets and Enforcement
of Security Interest Act, 2002 (SARFAESI Act. 2002) for an amount of Rs.6.40 crores
[Annexure 1(N)].
8. It is further represented that the corporate applicant / debtor has committed a
default in repayment of its debts, which is evident from the fact that reference was
earlier registered with erstwhile Board for Industrial and Financial Reconstruction
vide case No. 171/2015, which stood abated by the Sick Industrial Companies
(Special Provisions) Repeal Act, 2003 as amended by section 252 of the IB Code,
2016 (8th schedule).
9. It is also represented by the applicant that the Board of Industrial and Financial
Reconstruction (BIFR) also issued an order dated 10.12.2015, copy of which is at
page 470 to 473. It is submitted that the instant petition has been filed in terms of
eighth Schedule of the 'Code’ as provided in Section 252 thereof. Eighth schedule
further says that no fees shall be payable, if a reference is made under IB 'Code’,
2016 within 180 days from the commencement of the ‘Code’, in case above
proceedings under SICA have abated due to its repeal.
10. It is contended that the ‘corporate debtor’ proposes to negotiate with the
financial creditors for settlement of the dues, in case the Insolvency Professional
is appointed in terms of the provisions of the 'Code’. The copies of the corporate
debtors financial statement i.e. audited balance sheets for the last two financial
years ending on 31.03.2015 and 31.03.2016, are attached as Annexure V(A) and
V(B) respectively. Further the provisional financial statement for the period from
01.4.2016 to 26.3.2017 is at Annexure V (C). All these financial statements are duly
attested by Sunil Guglani, the Director of the applicant-company, for consideration
of the Tribunal.
11. It is also represented that mortgage of the current assets of the company both
present and future and of the fixed assets was created on 07.03.2011, for which,
the Punjab National Bank issued the sanction letter, copy of which is Annexure
I(B). The value of the stock, and the debtors is also stated as Rs.7.99 crores and
Rs.76.07 crores respectively, totalling to Rs.84.06 crores as per the balance sheet
ending on 26.03.2017.
11.2 The corporate applicant has filed a copies of certificates of charge issued by
ROC for the consortium banks at Annexure I(Q) (Page 167 to 184) These certificates
of various dates show creation of charge between the corporate applicant and
each of the financial creditors.
12. It is stated that the 'corporate debtor’ created equitable mortgage of entire
land and building, plant and machinery (existing and proposed) and other fixed
assets. Equitable mortgage of land and building of corporate applicant situated at
Village Kishanpura, Baddi - Nalagarh Road, Baddi (HP) except machinery
specifically charged in favour of Siemens Financial Services Limited installed at
Baddi and Ahmedabad unit [Annexure VI(A)]. The estimated market value of land
& building and plant & machinery, as per valuation report dated 31.3.2015 and
28.01.2015 is Rs.9.70 crores and Rs.73.41 crores respectively.
12.2 It is stated that collateral security has also been provided in respect of certain
properties. These are also mortgaged in the account of M/s Shivk Labs Ltd. (group
company) having outstanding loan amount of Rs.117.22 crores. The particulars of
these properties are as follows :
a. Equitable mortgage of land at Khasra No.32/11, 33/15/2 measuring 278
sq. yds. at Village Chhabal, Distt Amritsar in the name of Smt. Suman
Guglani having an estimated value of Rs.0.32 crores as per valuation
report dated 15.3.2013.
b. Equitable mortgage of H.No.20, Sector 16, Panchkula (Haryana) measuring
300 sq. yds. in the name of Smt. Suman Guglani having an estimated
value of Rs.3.74 crores as per valuation report dated 31.1.2015,
c. Second charge on H.No.86, Sector 7, Panchkula (Haryana) measuring

846 sq. yds. in the name of Shri Sunil Guglani, Smt. Suman Guglani and
Shri Suhail Guglani (first charge with PNB (LCB, Chandigarh against housing
loan) having an residual value of Rs.5.71 crores (Rs.18.21 - 12.50 crores) as
per valuation report dated 16.9.2014.
d. Equitable mortgage of constructed godown at Village Bhabhat, The
Derabassi: Distt. Mohali, measuring 0-10 marla in the name of Smt. Suman
Guglani having an estimated value of Rs. 0.96 crores as per valuation
e. Second charge of H.No.45, Sector 17, Panchkula (Haryana) in the name
of Shri Sunil Guglani, Smt. Suman Guglani and Shri Suhail Guglani
measuring 420 sq. mt. (first charge with PNB (LCB, Chandigarh) against
housing loan) having an estimated value of Rs.6.80 crores as per valuation
f. Second pari pasu charge over the entire block of assets of M/s Shivk Labs
Ltd., Baddi, Nalagarh Highway, Kishanpura, Himachal Pradesh having nil
residual value.
g. Second pari pasu charge over the entire block of assets of M/s York
Polymers, Plot No.656, Baddi, Kishanpura, Himachal Pradesh having nil
residual value.
It is stated that all the above properties are charged with the consortium except
Zirakpur ('d’ above) which is exclusively charged with PNB, LCB.
12.3 It is represented that the following personal guarantees have also been
Issued:
a. Guarantee by Mr. Sunil Guglani as per sanction letter dt. 28.3.2015 by
lead bank i.e. PNB (total net worth is Rs.63.19 crores and immovable
property Rs.12.11 crores as on 27.10.2014).
b. Guarantee by Mrs. Suman Guglani as per sanction letter dt. 28.3.2015 by
property Rs.16.31 crores as on 27.10.2014),
c. Guarantee by Mr. Suhail Guglani as per sanction letter dt. 28.3.2015 by
d. Guarantee by M/s York Polymers as per sanction letter dt. 28.3.2015 by
lead bank i.e., PNB (total net worth is Rs.4.47 crores and immovable
e. Guarantee by M/s Shivek Labs Ltd. as per sanction letter dt. 28.3.2015 by
lead bank i.e. PNB.
It is stated in the application in form No.6 that these guarantees were created by
PNB on 27.11.2006, Canara Bank on 13.3.2012 and by ICICI Bank on 12.3.2013.
13. The instant application filed in form 6 in terms of Section 10 of ‘the Code’ by the
Corporate Debtor. Section 10 of the fCodes is extracted hereinunder:
may be prescribed.
resolution professional
(4) The Adjudicating Authority shall within a period of fourteen days of the
Authority.
The above provision of the ‘Code’ discloses that the following procedures are
required to be completed by a 'Corporate Debtor' for initiating tine process of
insolvency :
(i) Existence of a Corporate Debtor,
(ii) Such a Corporate Debtor must have committed a default
application for Initiating Corporate Insolvency Resolution Process.

Section 10 of the 'Code' confers a discretion on this Tribunal to either admit or
reject the application and in case of rejection to give an opportunity to the applicant
before such rejection to rectify the defects within seven days from the date of
receipt of such notice from the Adjudicating Authority.
The term “Corporate Debtor” has been defined under Section 3(8) of Part-I of the
'Code’ to mean a Corporate Person, who owes a debt to any person and 'default'
Is defined under Section 3(12) of Part-I of the Code to mean “non-payment of debt
when whole or any part or instalment of the amount of debt has become due and
payable and Is not repaid by the debtor or the corporate debtor, as the case may
be”.
14. As provided in Rule 7(1) of the Rules, the Corporate Applicant has to make an
application under Section 10 of the 'Code’ in Form 6 accompanied with documents
Process for Corporate Persons) Regulations, 2016, Since we have already dealt In
furnished, we are not repeating the same for sake of brevity, as the essential
15. In relation to information relating to books of accounts, audited financial
statements have been filed for preceding two years for the year ending 31.03.2015
and year ending 31.03,2016 and unaudited financial statement for the period
made upto 26.03.2017, The Schedule of Creditor, both secured and unsecured
has been made upto 26.03.2017 attested by the director of the applicant company.
16. The applicant has also named Mr. Prakash Dev Sharma, the Interim Resolution
Professional as required under the 'Code’, the application being an application
made by a Corporate Debtor’ with Registration No. IBBI/IPA-002/IP-00020/2016-
17/1561. The interim Resolution Professional named in the application has duly
filed Form No.2 as prescribed under the Rules, in which the declaration as required
to be made to the effect that no disciplinary proceedings are pending against
him, which is a pre-requisite as per Section 16 of the ‘Code’ has also been made.
It is also stated in the application under Section 10 of the ‘Code’ that the applicant
is not barred from filing present application as provided in Section 11 of the Code’
and that no liquidation order has ever been passed against the applicant.
17. The applicant has furnished along with this application on Page 8(A) the
information of the accumulated profits/loss of the ‘corporate debtor' as on
26.03.2017, 31.03.2016 and 31.03.2015. Similarly, the applicant has furnished
details of long term borrowings and other liabilities for the aforesaid years, the
current Liabilities and the revenue from operations. The same are reproduced as
under -
Accuroulated profit/loss of the ‘corporate debtor’:
As on 26.03.2017 - (Rs.94,51,16,667)
As on 31.03.2016 - (Rs.49,85,26,591)
As on 31.03.2015 - (Rs.21,25,15,096)
years:
As on 26,03.2017 Rs.143,67,35,561
As on 31.03.2016 Rs.1,35,81,48,181
As on 31.03.2015 Rs.79,30,99,861
Current Liabilities:
As on 26.03.2017 Rs.73,90,57,638
As on 31.03.2016 Rs.69,24,93,499
As on 31.03.2015 Rs.1,17,98,53,875
As on 26.03.2017 Rs.25,03,27,401
As on 31.03.2016 Rs.66,90,47,203
As on 31.03.2015 Rs.1,95,45,63,347
18. The figures extracted above indicate the losses with continued fail in revenue,
therefore, it seems that the applicant has fallen into debt trap and is competent to
set in motion the insolvency resolution process as contemplated under the 'Code’.
On the basis of the aforesaid statements of the affairs of the company, the
outstanding amount as per the books of the company towards financial creditors
is Rs.206.45 crores and the amount in default towards financial creditors is
Rs.206.64 crores. It is represented that the tots] amount of operational creditors
(Raw Material Suppliers) is Rs.9.25 crores and the amount in default is Rs.9.25
crores. The total amount of operational creditors (Government dues) is Rs.0.55
crores and the amount in default is Rs.14.53 crores. The total amount of operational
creditors (Workers/Employees) is Rs.0.22 crores and the amount in default is nil.
The total amount of operational creditors (Service providers) is Rs.0.32 crores and
the amount in default is Rs.0.04 crores.
It is, however, observed that the applicant company save some sketchy particulars
has not given any road map as to how it is going to keep itself afloat as a going
concern. However, keeping in perspective the objects for which the 'Code' has
been brought into force and to balance the interest of all stakeholders, we are
satisfied that the instant application warrants to be admitted to prevent further
erosion of capital and to safeguard the assets of the Applicant Company/Corporate
Debtor. For the reasons aforementioned while admitting the application, we issue
the following directions :
(i) Appoint Mr. Prakash Dev Sharma, 97, Sukhna Enclave, Kaimbwala Road,
Kansal, Distt. Mohali (Punjab, having email- address ip40ibbi@gmail.com
Registration No.IBBI/IPA-002/IP-00020/2016-17/1561, a Registered
Insolvency Professional (IRP) as the Interim Resolution Professional as
contemplated under Section 16 of the ‘Code’ and his term of appointment
shall be for a period of thirty days from the date of this order or as may be
determined by the Committee of Creditors whichever is earlier;
(ii) In terms of Section 17 of the 'Code’, from the date of his appointment, the
report to the interim Resolution Professional, who shall be enjoined to
exercise all the powers as are vested with Interim Resolution Professions
Professional under Section 18 and other relevant provisions of the ‘Code’
including taking control and custody of the assets over which the Corporate
Debtor has ownership rights recorded in the balance sheet of the Corporate
Debtor etc. as provided in Section 18(1)(f) of 'Code'. The Interim Resolution
Professional is directed to prepare a complete list of inventory of assets of
(iii) The Interim Resolution Professional shall strictly act In accordance with
the ‘Code’, all the Rules framed thereunder by the Board or the Central
Government and In accordance with the Code of Conduct governing his
and moral.
Committee of Creditors at the earliest but not later than three weeks from
(v) It is hereby directed that the Corporate Debtor its properties, personnel
contemplated under Section 14 of ‘the Code’ as under :
is occupied by or in the possession of the corporate debtor,
India (Insolvency Resolution Process for Corporate Persons} Regulations, 2016 of
(b) of the 'Code' read with Section 15 calling for the submission of claims against
22. It is further directed that the Interim Resolution Professional shall positively
file a report of events before this Tribunal every week in relation to the Corporate
Debtor. Copy of this order be supplied to the authorised representative of applicant
immediately, who shall deliver a copy instantly to the Interim Resolution
Professional.
(Deepa Krishan) (Justice R.P. Nagrath)
April 07, 2017
M/S MEYER APPAREL LTD.

Name of the Corporate Debtor M/s Meyer Apparel Ltd.
Name of Operational Creditors/ M/s Surbhi Body Products (P) Ltd.&M/s

Applicants Godolo and Godolo Exports (P) Ltd.
Company Petition No. IB/13/CHD/HRY/2017&IB/14/CHD/HRY/

2017

Amount Involved Rs.

1. In the present case, two applications were filed by M/s. Surbhi Body
Products Private Limited & M/s. Godolo and Godolo Exports Priavte Limited
(“Operational Creditors” or “OCs”) against M/s Meyer Apparel Limited
(“Corporate Debtor” or “CD”) and disposed off by the Bench by a common
order.
Facts in CP (IB) No. 13/CHD/HRY/2017
2. CD issued purchase order dated 11.03.2014 for purchase of goods worth
Rs. 2,13,500/-. Purchase order stipulated payment against supplied goods
within 60 days after delivery of goods. OCs issued invoices dated
12.03.2014 of Rs. 2,13,500/- and another invoice dated 17.06.2014 for Rs.
70/- which was acknowledge by CD and no defects were raised in goods
supplied.
3. The CD acknowledged its liability by submitting duly signed confirmation
of accounts dated 07.01.2015 admitting liability of Rs. 2,13,500/-.
4. CD sent legal notice dated 02.03.2015 under section 433 r/w section 434
Companies Act, 1956 and thereafter filed company petition for winding up
before Hon’ble High Court of Punjab and Haryana on 28.08.2015.
5. As per the OCs, as a counter blast, CD sent legal notice dated 21.09.2015
raising dispute of goods being of inferior quality. However, OCs sent letter
dated 20.11.2015 stating that matter is sub judice
6. On the other hand, CD filed application before the Hon’ble High Court for
withdrawal of company petition on the ground that the CD is already

before BIFR and the company petition was withdrawn vide order
06.09.2016.
7. On 15.02.2017, OCs issued statutory notice under section 8 of the Code
which was received on 21.02.2017 by CD. Thereafter, OCs had filed the
present application along with all documents.
Facts in CP (IB) No. 14/CHD/HRY/2017
8. The facts in the present case are similar to above application. The OCs
herein supplied goods to CD and raised 32 invoices for total amount of Rs.
16,09,152 with pending amount to be paid Rs. 12,49,307/-. The invoice
stipulated that defects in goods were to be notified to OCs within 7 days of
receipt of goods which was not done by CD.
9. Further, out of amount of Rs. 12,49,307/-, CD made payment of Rs. 80,473/
- on 26.02.2015 and thus, the balance outstanding is Rs. 11,68,834/-. The
CD in the present case also acknowledged its liability.
10. The OCs in this case too filed winding up petition and after filing of the
same, CD raised issue of goods of being inferior quality. The petition in
this case was also dismissed as withdrawn.
11. The OCs in this case also issued statutory notice under section 8 of the
Code and reply filed by CD on 28.02.2017.

A. During the arguments, the Bench noticed that the only question to be
decided is whether there exists a ‘dispute’ with regard to the liability to
pay to the ‘operational creditor’.
B. The CD argued that in the reply dated 28.02.2017, it had stated that
readymade garments manufactured by it by using OCs’ raw material was
rejected by customers due to inferior quality and that the OCs had inspected
the CD’s factory and agreed to either replace the goods or refund the
credit/charges. Thus, argued the CD that, the OCs were made aware
about ‘existence of dispute’and thus, the application was to be rejected.
C. CD further stated that in its legal notice dated 21.09.2015, it informed the
OCs that latter was liable to pay Rs. 2,30,988/- on account of loss of value
of goods and that it had filed a civil suit for recovery of Rs. 3,80,998/-
towards other charges, thereby, showing ‘existence of dispute’.
D. The Bench noted that CD has merely mentioned of filing of Civil Suit in the
reply dated 28.02.2017 whereas, no copy of the civil suit has been attached,
nor suit number, or date of institution has been mentioned. Further, not
even the first order passed by Civil Court issuing notice has been attached.
It appears that as on date of filing reply, Civil suit was yet to be entertained
by Civil court.
E. Still the question would be whether the earlier notice dated 21.09.2015
raising issue of inferior quality of goods would amount to raising dispute
thereby resulting in rejection of claim.
F. The Bench noted that the amount claimed by OCs had been shown as
outstanding in the ledger account of CD which has also been confirmed
by the CD. It was also noted that legal notice dated 21.09.2015 was sent by
way of defence to winding up petition which was listed before Hon’ble
High Court on 08.09.2015 when the High Court issued notice to CD for
19.01.2016.
G. The Bench rejected reliance of CD on the judgment of M/s One Coat
Plaster vs M/s Ambience Pvt. Ltd. on the ground that in that case, there
was no document to show that CD had certified the quantum of work done
by OCs in that case.
H. The Bench observed that raising dispute in notice dated 21.09.2015, with
regard to quality of goods, more than one year after the last transaction
and the fact that recourse to filing civil suit just at the time of sending reply
to demand notice under section 8 of the Code would not amount to
‘existence of dispute’.
I. Accordingly, the Bench admitted the applications of the OCs and passed
following order:
ii. Since no insolvency professional was named by OCs, the Bench,
iii. Upon communication of proposal for appointment of IRP, the Bench
directed that it would pass separate order for public announcement.

CHANDIGARH.
Company Petition (IB) No.13/Chd/Hry/2017
Company Petition (IB) No.14/Chd/Hry/2017
Date of Order: 07.04,2017.
Coram:
Justice R.P. Nagrath, Member (Judicial)
Deepa Krishan, Member (Technical).
In the matter of :
Applications under Section 9 of the Insolvency and Bankruptcy Code, 2016 read
with insolvency and Bankruptcy (Application to Adjudicating Authority) Rules,
2016 to initiate corporate insolvency resolution process in respect of Corporate
Debtor under the Code.
In the matter of :
M/s Surbhi Body Products (P) Limited
Through its Authorized Representative, Sh. Binod Yadav
Registered Office at: 635/1P Gadipur Bandh,
Tehsil Mehrauli, New Defhi
Also at:
Corporate Office:
S-7, llnd Floor, Okhla Industrial Area,
Phase-ll, New Delhi-110020
(M: 8826449457, O: 011-45190000, Email-vinod@godolo.com)
.... OperationaI Creditor/Applleant.
Vs.
M/s Meyer Apparel Ltd. (Erstwhile M/s Givo Limited)
Through its Director.
Registered Office at:
42nd Milestone, Delhi Jaipur Highway,
Kherki Daula, Gurgaon - 122001, Haryana, India.
... Corporate Debtor,
AND
In the matter of :
M/s Godolo and Godolo Exports (P) Ltd.
Through its Authorized Representative, Sh. Binod Yadav
Registered Office:
T-28, Okhla Industrial Estate,
Phase - 2,
New Delhi - 110020, India.
Corporate Office:
S-7, Okhla Industrial Area,
Phase - 2, New Delhi -110020,
(M: 8826449457, 0: 011-45190000, E: vinod@godolo.com).
.... OperaticnaI Creditor/Applicant
Vs.
M/s Meyer Apparel Ud. (Erstwhile M/s Givo Ltd.)
Registered Office at: 42nd Milestone, Delhi Jaipur Highway,
Kherki Daula, Gurgaon- 122001, Haryana, India.
... Corporate Debtor.
Present : Mr. Rhishabh Jetley, Advocate with Ms.lsha Aggarwal, Advocate for the
petitioner.
Mr. AtuI V. Sood, Advocate for respondent.
COMMON ORDER
1. The above petitions have been filed seeking to set in motion the Corporate
Insolvency Resolution Process (IRP) as contemplated under Section 9 of the
Insolvency and Bankruptcy Code, 2016 (for short hereinafter as the Code) in
relation to M/s Meyer Apparel Ltd. (for brevity hereinafter to refer as the ‘Company')
described in the petition as "Corporate Debtor”. The petitioner is ‘Operational
Creditor" and is a Company incorporated under the Companies Act, 1956. The
Corporate Debtor has changed its name from M/s Giva Limited to M/s Meyer
Apparel Limited w.e.f. 19.10.2015 and its registered office is at Gurgaon. The
Certificate of Incorporation pursuant to the change of name dated 19.10.2015 is
Annexure A-1.
The facts in relation to CP(IB) No.13/Chd/Hry/2017

2. The Corporate Debtor-Company approached the Applicant for the purchase
and supply of various qualities of interlining and lining trims. The Corporate
Debtor issued purchase order dated 11.03.2014 to purchase goods worth
Rs.2,13,500. The purchase order clearly stipulated that payment against the goods
supplied is to be made within sixty days after delivery of goods. Copy of the
purchase order is Annexure A-3. After that the applicant started supplying the
goods, which were accepted without any dispute or demur The Company
acknowledged the receipt of goods by putting its stamp and signatures on the
invoices on receipt of the material. It was also stipulated that any defect/shortage/
rate difference was to be notified to the Applicant within seven days. The duly
acknowledged and signed invoice dated 12.03.2014 of Rs.2,13,500 and another
invoice dated 17.06.2014 for Rs.70 are at Annexure A-4. Non-payment of amount
of the transaction within the due date, interest was charged @ 24% per annum.
No dispute was raised by the Company nor the goods have been returned till
date. It is also stated that the Company acknowledged the outstanding liability by
submitting duly signed confirmation of accounts dated 07.01.2015 admitting the
liability of Rs.2,13,570.40. Copy of the confirmation of accounts is dated 07.01.2015
Annexure A-5. The Company also submitted its ledger account for the period
from 01.04.2014 to 05.01.2015, wherein it acknowledged the outstanding liability
of Rs.2,13,500. Copy of the ledger account of the ‘Corporate Debtor’ for the
aforesaid period is Annexure A-6. The amount was not paid despite repeated
demands.
3. Thereafter the Applicant sent a legal notice dated 02.03.2015 under Section
433 read with Section 434 of the Companies Act, 1956, admitting the outstanding
payment within 21 days. Copy of the notice is Annexure A-9.
4. It is stated that as a counter blast to the legal notice, the company sent a letter
dated 04.09.2015 raising the dispute of goods being of Inferior quality. In the said
notice, the Company falsely alleged about a meeting dated 27.02.2015, which
never took place between the parties. There was also a reference in the reply to
a letter dated 27.02.2015 sent by the company, which has never been received
by the Applicant. The facts stated in the said letter are stated to be concocted.
Copy of the letter dated 04.09.2015 sent by the Company is at Annexure A-10.
5. It is also stated that since the Corporate Debtor failed to make payment of the
outstanding debt, the Applicant filed a Company Petition No. 164 of 2015 for
winding up of the 'Corporate Debtor’ before the Hon’ble Punjab & Haryana High
Court on 28.08.2015. The appearance was put in on behalf of the Corporate
Debtor and no reply was filed, it is stated that by way of defence to the Company
Petition for winding up, the respondent sent legal notice dated 21.09.2015 about
the quality of the goods as a counter blast The Applicant, however, sent reply
dated 20,11.2015 to the said notice stating that the matter was sub-judice before
the Hon'ble High Court.
6. It is further stated that an application was filed by the ‘Corporate Debtor’ under
Rule 9 of the Companies (Court) Rules, 1959 read with Section 22 of Sick Industrial
Companies Act, 1985 (for brevity SICA) before the Hon’ble High Court, in view of
the above application that the matter was registered under Section 15 of SICA, the
winding up petition before the Hon’ble High Court was withdrawn. Copy of the
order dated 06.09.2016 passed by Hon’ble High Court is Annexure A-17. The
order dated 06.09.2016 of the Hon’ble High Court is reproduced below :
“Counsel for the respondent has submitted that this petition is not maintainable
because the respondent-company is before the BIFR. It is also submitted that
the application in this regard has been filed, which has not been listed.
Faced with these circumstances, counsel for the petitioner prays for withdrawal
of the petition at this stage.
Dismissed as withdrawn with liberty to revive the petition after the proceedings
of the BIFR are over.”
7. The instant petition has been filed under Section 9 of the Code by sending a
demand notice dated 15.02.2017 in Form 3, as provided in Rule 5(1) of the Insolvency
and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for short ‘the
Rules') to the Corporate Debtor, in terms of Section 8 of the Code. It is stated that the
notice was duly received by the Company by Speed Post, on 17.02.2017 and on
21.02.2017 by the Registered Post as per the track reports attached. Copy of the
notice in the prescribed format along with the purchase order, invoices and the
track reports is at Annexure A-18. The respondent sent a reply dated 28.02.2017 to
this notice making false assertion that the notice of raising the issue of inferior
quality of goods was received on 25.02.2017 and also that a civil suit for recovery
of an amount of Rs.2,16,610 has been filed in the Civil Court. Anyhow, copy of the
plaint in the said Civil Suit was not attached with the reply.
8. The Applicant/Operational creditor has filed this application in Form 5 as
prescribed by Rule 6 of the Rules. This is accompanied with the documents and
records mentioned therein.
In relation to CP (IB) No.14/Chd/Hry/2017.

9. The controversy in the instant case Is exactly similar to the first case. In the
instant case, the purchase orders were issued by the ‘Corporate Debtor’ from
time to time submitting that the payment against the goods supplied shall be
made within sixty days of the delivery of goods. The tabulated information with
regard to the purchase orders placed by the Company and the amount of the
invoices are given below :
Date Purchaser Order No. (Amount (in Rs.)
11.03.2014 PO-13-1681 1,04,000
22.03.2014 PO-13-1733 48,000

31.03.2014 PO-13-1770 61,020
31.03.2014 PO-13-1787 4,19,700
05.04.2014 RO-14-11 78,150
05.04.2014 PO-14-12 52,000
27.05.2014 PO-14-232 2,600
29.05.2014 PO-14-238 78,150
29.05.2014 PO-14-238 1,28,166
03.06.2014 PO-14-262 32,500
07.06.2014 PO-14-274 10,628
05.07.2014 PO-14-375 13,000
18.07.2014 PO-14-440 46,890
01.07.2014 PO-14-359 78,150
04.09.2014 PO-14-651 57,200
13.09.2014 PO-14-702 35,428

Copy of the purchase orders are Annexure A-3 (colly). The Invoices received and
duly acknowledged by the Corporate Debtor are also given in the tabulated
format and there are 32 invoices of the total amount of Rs.16,09,152/- with pending
amount to be paid as Rs.12,49,307.50Ps. The due dates of the payment against
each invoice are also mentioned for the period from 10.06.2014 to 12.12.2014. It
was clearly stated in the Invoices that the claims of defects/shortage/rate
difference have to be notified in writing with the ‘Operational Creditor’ within
seven days of the receipt of the goods. It was also stipulated that in case of
default in making payment within the due date, the Applicant would charge
interest @ 24% per annum Within seven days to 10 days of the supply of the
goods, the ‘Corporate Debtor' was required to send the rejected goods to the
warehouse of the ‘Operational Creditor’ along with the challan. On receiving the
challan, the Corporate Debtor was to raise a debit note and the ‘Operational
Creditor’ was to raise credit note of that account.
10. It is further stated that out of the amount of Rs. 12,49,307.50, the Corporate
Debtor made the payment of Rs.80,473.50 on 26.02.2015 and therefore, the
balance outstanding liability is Rs.1,68,834 along with interest. However, the
balance outstanding amount has not been paid despite demands, orally as well
as written communications. Various emails and SMSs were also sent. Copies of
emails and SMSs are Annexure A-5. There is also the similar allegation of
confirmation of the accounts by the Company on 07.01.2015. Copy of the duly
acknowledged and signed confirmation of account is Annexure A-6. The
Company also acknowledged and admitted the liability by submitting its ledger
account for the period from 01.04.2014 to 05.01.2015. This ledger account of the
outstanding liability is to the tune of 2,49,307.50 and the copy of ledger account
is Annexure A-7. There are similar allegations of filing of the winding up petition
before the Hon’ble Punjab & Haryana High Court after serving a statutory notice,
which was ultimately disposed of as withdrawn. It was after the filing of winding
up petition that the respondent raised the issue of inferior qualify of goods by
sending notice for the first time on 21.09.2015 to create a defence in the winding
up petition Copy of the said notice is Annexure A-14. It is stated that there was a
gap of about 1½ years from the date of receipt of the goods in raising such an
objection.
11. There is a similar plea with regard to the sending of the demand notice dated
15.02.2017 and the reply filed by the respondent, which is dated 28.02.2017.
12. We have heard the learned counsel for the parties quite extensively and have
perused the record. We are extracting the facts from paper book of CP (IB) 14/
Chd/Hry/2017 for the purpose of discussion.
13. The factum that the application is in order and has been filed in the prescribed
format after sending the demand notice under Section 8 of the Act and that the
applicant has attached all the necessary documents required under the Code
and the Rules framed thereunder, is not in dispute. The only question that falls for
consideration and agitated during the course of arguments by learned counsel
for the respondent was, whether there exists a dispute with regard to the liability
to pay to the 'Operational Creditor' for maintainability of the petition.
14. Under sub-section (3) of Section 9 of ‘the Code’, the Operational Creditor’ has
to furnish along with the application, (a) a copy of the invoice demanding payment
or demand notice delivered by the ‘Operational Creditor to the Corporate Debtor;
(b) an affidavit to the effect that there is no notice given by the ‘Corporate Debtor’
relating to the dispute of unpaid operational debt; (c) copy of the certificate from
financial institution maintaining the account of the Operational Creditor confirming
that there is no payment of an unpaid operational debt by the Corporate Debtor
and; (d) such other information as may be specified.
15. The ‘Corporate Debtor’ has attached duly certified statements of its current
bank accounts starting from 01.04.2016 to 13.03.2017 Annexure A-22. This is
supported by the Certificate Annexure A-23 from Chartered Accountant. It is
certified that on perusal of the aforesaid account statements of the Applicant
maintained in the Bank as per law, the respondent has made the last payment
amounting to Rs.80,473-50Ps on 26.02.2015 and no payment/deposit has been
made in the account as mentioned in the statement of account after 26 .02.2015
till the date of certificate. The certificate is dated 11.03.2017. It is further certified by
the Chartered Accountant that no payment deposit amounting to Rs.11,68,634/-
has been deposited/paid by the respondent in the bank account of the Applicant/
Operational Creditor The Bank details of the Applicant are also attached with the
report of Chartered Accountant at page 312. It is observed that the contents of the
information filed under Section 9 is supported with an affidavit of the authorised
signatory of the Applicant-company.
16. Sub-section (5) of Section 9 of the Code reads as under :
“The Adjudicating Authority shall within fourteen days of the receipt of the
application under sub-section (2), by an order -
(i) Admit the application and communicate such decision to the operational
creditor and the corporate debtor if, -
(a) The application made under sub-section (2) is complete;
(b) There is no repayment of the unpaid operational debt;
(c) The invoice or notice for payment to the corporate debtor has been
delivered by the operational creditor;
(d) No notice of dispute has been received by the operational creditor
or there is no record of dispute in the information utility; and
(e) There is no disciplinary proceeding pending against any resolution
professional proposed under sub-section (4), if any.
(ii) Reject the application and communicate such decision to the operational
creditor and the corporate debtor, If-
(a) The application made under sub-section (2) is incomplete;
(b) There has been repayment of the unpaid operational debt;
(c) The creditor has not delivered the invoice or notice for payment to
(d) Notice of dispute has been received by the operational creditor or
there is a record of dispute in the information utility; or
(e) Any disciplinary proceeding is pending against any proposed
resolution professional:
Provided that Adjudicating Authority, shall before rejecting an application under
sub-clause (a) of clause (ii) give a notice to the applicant to rectify the defect in
his application within seven days of the date of receipt of such notice from the
Adjudicating Authority.
17. Learned counsel for respondents confined his argument only on the issue as
to whether the reply dated 28.2.2017 sent by the respondent to the demand
notice under section 8 of the Code amounts to raising the dispute so as to reject
the instant petition. It is stated in the reply dated 28,02.2017, Annexure A-19 that
the readymade garments manufactured by the company using the lining/
interlining fabric supplied by Applicant were rejected by the customer due to the
inferior quality and sub-standard lining Ante dining fabric supplied by them.
18. It is further stated in the reply as under:
"2. That we were in a state of shock, though keeping long relation in mind and
with a view to sort out the matter amicably we had informed you about such
rejection due to the inferior quality and sub-standards lining/interlining fabric
supplied by you.
3. That upon intimation from our company, your concerned authorised officials
visited in our factory premises and inspected the goods followed by a meeting
on 18,2,2015 to sort out the issue.
4. That during the meeting on 18.2.2015, your authorised official, while accepting
and acknowledging the inferior quality of goods/lining/interlining fabric supplied
by your assured to our Company to either refund the credit / charges against
the value of such goods of inferior quality supplied by you or in alternative
provide fresh lining/interlining fabric of good quality standards as ordered by
our Company after discussion the issue with your Board of Directors and to
revert to or Company within 7-10 days.
5. However, when no response was received from you and/or your authorised
officials within the time assured by our authorised officials, our Company bad
issued a letter dated 27.02.2015 again informing you about the readymade
garments manufactured by us from inferior quality fabric / cloth supplied by
you were lying dumped in our Company’s factory premises and we raised a
claim of Rs. 13,99,833/- upon you against such rejected goods due to the
inferior quality and sub-standards lining/interlining fabric supplied by you.
6. However, to utter dismay to our Company, instead of keeping by your words
and promises and settling the claim of our Company in your accounts, you the
Noticee of the dispute, in sheer disregard to your assurances and in utter
disrespect to the long relationship with our Company and only as a counter
blast of a letter dated 27.02.2015 by our Company, issued a Legal Notice to our
company, thereby alleging against our Company and raised false claims.”
19. It is further stated that the respondent company made several demands and
entered into correspondence with the applicant by way of their fetters dated
04.09.2015 and 08.9.2015 to settle the claim of the company, but the applicant did
not bother Therefore, on 21.09.2015, the Respondent-Company sent a Legal Notice
for settling a debit note of Rs. 13,99,833/- and by showing outstanding amount
the applicant was liable to pay Rs.2,30,988.50 on account of loss of value of
goods, It is further stated in the reply that the respondent company has filed a civil
suit for recovery of Rs.3,80,998/-, inclusive of Rs. 1,50,000/- towards other charges.
20. Learned counsel for Applicant, however referred to sub-section (2) of Section
8 of the Code which reads as under :
“The corporate debtor shall, within a period of ten days of the receipt of the
demand notice or copy of the invoice mentioned in sub-section (1) bring to the
notice of the operational creditor-
(a) Existence of a dispute, if any, and record of the pendency of the suit or
arbitration proceedings filed before the receipt of such notice or invoice in
relation to such dispute;
(b) The repayment of unpaid operational debt-
(i) By sending an attested copy of the record of electronic transfer of
the unpaid amount from the bank account of the corporate debtor;
or
(ii) By sending an attested copy of record that the operational creditor
has encashed a cheque issued by the corporate debtor.
Explanation: For the purposes of this section, a “demand notice" means a
notice served by an operational creditor to the corporate debtor demanding
repayment of the operational debt In respect of which the default has occurred.”
21. It was pointed out that the Company has alleged in the reply dated 28.2.2017
that the Corporate Debtor' has filed a Civil Suit for recovery, before the Civil Judge
(Sr. Division), Gurgaon but copy of the plaint of the Civil Suit is not attached, nor the
Suit number or the date of institution have not been mentioned. It is further
contented that even the first order passed by the Civil Court in the said Suit,
issuing notice to the Applicant as Defendant has not been attached.
22. Having thoughtfully considered the matter, it seems that, on the date of
sending reply dated 28.02.2017, the Civil Suit was yet to be entertained by the
Civil Court. That is why, copy of the plaint, the particulars of suit number and the
first order have not been filed.
23. The question, however, would still be whether the earlier notice dated 21.9.2015
sent by respondent raising the issue of the inferior quality of the goods (Annexure
A/14) attached by the Applicant would amount to raising of the dispute thereby
resulting in rejection of the instant petition.
24. The learned counsel for respondent company referred to judgement passed
by the Hon'ble Principal Bench in CA No.(IB) 07/PB/2017 and CA No.(IB)08/PB/
2017. titled M/s One Coast Plaster Vs. M/s Ambience Private Limited and
M/s Shivam Construction Company Vs. M/s Ambience Private Limited. In the
said case, raising of the issue about quality of the work in the reply to the notice
under section 8 of the Code was considered a notice of dispute dis-entitling the
applicant for an order of admission and therefore, the application was rejected.
The facts of the case before the Hon’ble Principal Bench were peculiar to the said
case wherein the balance outstanding amount was upto the Month of June 2016.
It was also found that the work contract was predominantly concerning labour
contract and the rate for the execution of the works contract seemed to be fixed
on square feet basis. It was found that there was no document to show that the
'Corporate Debtor' or its authorised architect had certified the quantum of work
done by the petitioner in relation to the work contract award to them.
25. In the instant case, however, the goods were supplied on the basis of the
purchase orders issued by the 'Corporate Debtor' for the period from 11.03.2014
to 19.9,2014 (for about six months) and the invoices for delivery of the goods were
also for the said period. There has been no dispute raised in the reply dated
28.02,2017 that the amount claimed by the applicant was not shown as outstanding
in the ledger account of the ‘Corporate debtor’.
26. Annexure A/6 at page 112 of the paper book is the confirmation of Accounts
of the applicant, made by the ‘Corporate Debtor’ - respondent. The outstanding
amount, as reflected in this confirmation of Accounts, is what the applicant has
claimed. The factum of part payment of Rs.80,473.50 made by the respondent to
Applicant on 26.02.2015 is also not disputed in the reply dated 28.02.2015.
27. From the facts of the instant case, it is apparent that the notice (Annexure A-
14)dated 21.9.2015 was sent by the respondent raising the issue of inferior quality
of the goods, only by way of defence to the winding up petition which was filed by
the Applicant in the Hon’ble High Court of Punjab and Haryana. At page 154 of the
paper book is the order dated 08 9.2015, passed by the Hon'ble High Court of
Punjab and Haryana, issuing notice to the respondent company for 19.1.2016 to
show cause as to why the petition be not admitted. On the next day, adjournment
was granted for filing reply for which another adjournment was again requested.
There is an order dated 06.9.2016 (Annexure A-17) in the connected file M/s
Surbhi Body Products (P) Ltd. Vs. M/s Givo Ltd. which shows that the counsel
for respondent company submitted before the Hon’ble High Court that the petition
is not maintainable because the respondent company is before the BIFR. Faced
with these circumstances, the CP was dismissed by Hon’ble High Court as
withdrawn with liberty to revive the petition after the proceedings of BIFR are over.
The facts do indicate that the respondent company itself had gone to BIFR for
reconstruction of the sick company. It is quite clear that the notice dated 21.09.2015
was issued by the Company after more than one year of the last transaction
simply to set up a defence in the winding up petition. Before that, there was, in
fact, total admission by the ‘Corporate Debtor' - Respondent in the documents of
confirmation of Account and its Ledger Account.
28. The term 'dispute' is defined in Section 5(6) of the Code which reads as
under:-
““dispute" includes a suit or arbitration proceedings relating to -
a) the existence of the amount of debit;
b) the quality of goods or service; or
c) the breach of a representation or warranty.”
29. Therefore, the dispute relating to quality of goods and service would also be
included in the said definition. The question basically is whether raising this
dispute in the Notice dated 27.09.2015 more than one year after the last transaction
is covered within the scope of the term ‘dispute’, especially when the recourse to
the recovery of the outstanding amount by filing a civil suit seems to have been
taken just at the time of sending reply to the demand notice under Section 8 of the
'Code' in February, 2017.
30. Learned counsel for the applicant relied upon the judgement- “Paharpur 3 P
(A Division of Paharpur Cooling Towers Limited versus Dalmia Consumer
Care Private Limited” CP No. 66/2006 and Co. App. No. 58/2007 decided on
02.07.2008 which arose out of the petition for winding up of the company under
Section 433 (e) of the Companies Act, 1956. The Hon’ble High Court of Delhi held
as under:-
“For all the aforesaid reasons and on the basis of the materials brought on
record, I reject the submission of the respondent that the quality of the
packaging materials supplied by the petitioner can be said to be defective or of
inferior quality, I am satisfied that this defense has been raised by the respondent
merely as an afterthought and with a view to ward off their liability owned to
the petitioner as well as to defeat these proceedings, I also draw support from
the following decisions relied upon by the petitioner, wherein it is held that
such like highly belated disputes about the quality of goods supplied and
received by the respondent would not give rise to a bona fide dispute,
1. Tarai Food Limited v. Wimpy International Pvt. Ltd. 2005 VIII AD (Delhi) 131.
2. Shivaiik Rasayan Ltd. v. Pesto Chem MANU/DE/0921/2005: 124 (2005)
DLT 431
3. Durgapur Project Pvt. Ltd., In re. [1983] 53 CC 320 (CAL.)
4. Joti Prasad Bata Prasad v. ACT Developers Pvt. Ltd. (1990) 68 CC 601 (Delhi).
5. Straw Board Manufacturing Co. Ltd. v. Mahalaxmi Sugar Mills Co. Ltd .(1991)
71 CC 544 (P&H)"
31. In Shyam Sunder Casting Pvt. Ltd. versus Suresh Enterprise, CP No. 285 of
1992 decided on 04.05.1993 of the Hon’ble Calcutta High Court, it was held that
if reasonable grounds of raising such a dispute are wholly absent, then the debt
remains undisputed in spite of raising of pretended disputes.
32. In Chem-Crown India Limited versus Sports Equipment (P) Ltd. of the Hon’ble
High Court, Delhi [2001] 103 Comp Cas 1002 (Delhi) which also arose out of winding
up petition, it was observed that over a period of three years and four months, the
adhesives were supplied, received without objections as to the quality, utilized,
goods produced, sold to retailers, who in their turn, sold to the customers. The
matter relates to the sales of goods. There is no contract that the quality was to be
of the same level as that supplied to Liberty nor that any test was to be conducted
either at the appellant’s premises before the goods were despatched nor at the
respondent's premises when the goods reached there. The complaints were only
raised after the adhesives were consumed in the manufacture and the shoes were
sold to the retailers and other customers, it was thus held that in view of the above,
it is difficult to say either that the amount was not admitted.
33. In Max India Limited versus Unicoat Tapes (P) Ltd., CP No. 99 of 1994 decided
on 04.07.1997, the Punjab and Haryana High Court held that In case there was any
dispute with regard to quality of goods, the respondent-company would not have
placed any further order for supply of goods or would not have made payments on
various dates between February and October, 1992, it was also noticed that before
filing of the petition, registered notice was sent by the petitioner-company through
its Advocate and in case there was any dispute, respondent-company had the
opportunity to explain the same in its reply. Instead of explaining as to why the
notice was not replied to, the respondent-company has simply denied the receipt
of the same. In view of the circumstances discussed above, it was held that the
defence set up by the respondent-company is not bona fide one and has been set
up only in order to deny payment due to the petitioner-company”.
34. In view of the aforesaid discussion, we find that there is no dispute existing in
the present case as tried to be set up by the respondent and the petition which
compiles with various requirements, deserves to be admitted.
35. The petition, therefore, is admitted declaring the moratorium with the following
directions:
i) That the Bench hereby prohibits the institution of suits or continuation of
pending suits or proceedings against the ‘Corporate Debtor' including
or disposing of by the Corporate Debtor any of its assets or any legal right
any security interest created by the ‘Corporate Debtor’ in respect of its
occupied by or in the possession of the Corporate Debtor.
ii) That the supply of essential goods or services to the 'Corporate Debtor', if
moratorium period
iii) That the provisions of sub-section (1) shall not apply to such transactions
iv) That the order of moratorium shall have effect from the date of this order
till completion of the corporate insolvency resolution process or until this
passes an order for liquidation of Corporate Debtor under Section 33 as
the case may be.
36. Since the name of Interim Resolution Professional has not been proposed by
the Applicant, we direct that a reference be made to the Insolvency and Bankruptcy
Board of India for recommending an Insolvency Professional, who may act as
Interim Resolution Professional in terms of sub-section (3) and (4) of Section 16 of
the Code.
37. The matter is fixed for 24.04.2017 for awaiting the recommendations from
IBBI regarding the name of Interim Resolution Professional and further directions
shall be issued thereafter.
The petition is accordingly admitted.
(Deepa Krishan) (Justice R.P. Nagrath)
April 07, 2017.

CHANDIGARH.
CP (IB) No.13/Chd/Hry/2017.
In the matter of :
M/s Surbhi Body Products Pvt. Ltd.
.....Petitioner.
Versus
M/s Meyer Apparel Ltd.
.....Respondent
Present : Mr. Atul V. Sood, Advocate for respondent.
Mr. Atul V. Sood has filed power of attorney on behalf of the respondent-company
along with the copy of resolution of the Board of Directors given by Mr. R.K.
Sharma, the authorised representative of the respondent company, as per the
resolution dated 26 05,2015, The order has already been reserved for today.
(Justice R.P. Nagrath) (Deepa Krishan)
Member (Judicial) Member (Technical)
RECORDERS AND MEDICARE SYSTEMS PVT.LTD.

Name of the Corporate Debtor/ Recorders and Medicare Systems Pvt. Ltd.
Applicant
Company Petition No. CP(IB) No. 7/CHD/HR/2017


1. Recorders and Medicare Systems Pvt. Ltd. (“Corporate Debtor” or “CD”)
was incorporated on 15.12.2003 and having registered office in
Chandigarh. CD was incorporated with authorized share capital of Rs. 12
crores and having paid up capital of Rs. 9,71,91,000/-.
2. CD created equitable mortgage of its industrial property in Chandigarh on
21.11.2007 with State Bank of Patiala. On the same date, the residential
property in Chandigarh in name of mother of a director was also mortgaged
with HDFC Bank with State Bank of Patiala having second charge. Another
equitable mortgage of its property in Baddi (HP) was created on 17.10.2008.
3. CD was declared a sick company by BIFR vide order dated 31.12.2012 in
terms of section 3(1)(O) of SICA and State Bank of Patiala was appointed as
its Operating Agency. Since SICA was repealed, the instant reference was
filed in terms of Eighth Schedule under the Code within 180 days of the
commencement of the Code.
4. Financial Creditors of the CD included State Bank of Patiala, State Bank of
India and HDFC Bank with default to the tune of Rs. 80 crores, whereas,
the default in respect of Government dues was more than Rs. 11 crores
and default in respect of operational creditors was more than Rs. 4 crores.
The value of the stock, fixed assets and debtors was stated at Rs. 15.81
crores as per balance sheet for the period ending on 28.02.2017
5. CD proposed the name of Interim Resolution Professional Mr. Purushottam
Ram Singhania, who gave necessary declarations under the Code.

A. The Bench took note of section 10 of the Code and provisions of Rule 7(1)
of the IBC (Application to Adjudicating Authority) Rules, 2016.
B. It was observed that having regard to the affidavit filed by the CD indicating
accumulated profit/loss, liabilities and revenue from operations, the
application deserves to be admitted. However, it was noted that the CD,
save for some sketchy particulars, had not given any road map as to how
it is going to keep itself afloat as a going concern. However, keeping in
view the objects for which the Code was enacted, the application was
admitted.
i. Appointed Mr. Purshottam Ram Singhania as an Interim Resolution
Professional for a period of thirty days.
Code
iii. IRP was directed to cause a public announcement within 3 days
from date of the order as contemplated under Regulation 6 of the
IBBI (Insolvency Resolution Process for Corporate Persons)
Regulations, 2016
iv. IRP to file report of events before the Bench every week in relation to
BEFORE THE NATIONAL COMPANY LAW TRIBUNAL,

CHANDIGARH BENCH, CHANDIGARH.
CP (IB) No.7/Chd/HR/2017.
Date of Order: 16.03.2017.
Coram:
In the matter of :
Recorders and Medicare Systems Pvt. Ltd.
Plot No.196, Industrial Area, Phase-1,
Panchkula-134113 (Haryana).
....Corporate Applicant/Debtor.
Revised application to initiate corporate Insolvency resolution process In respect
of Recorders and Medicare Systems Pvt. Ltd. under the Insolvency and Bankruptcy
Code, 2016.
Present: Mr. J.K. Grover, Independent Director of Corporate Applicant.
Mr. Purushottam Ram Singhania, Insolvency Professional.
ORDER
R.P. NAGRATH J, MEMBER (JUDICIAL) (ORAL)

1. This is an application filed by Recorders and Medicare Systems Pvt. Ltd., a
“Corporate Debtor" itself under Section 10 of Insolvency and Bankruptcy Code,
2016 (for brevity to be referred hereinafter as ‘the Code’) in statutory form No.6 as
prescribed by sub-rule (1) of rule 7 of the Insolvency and Bankruptcy (Application
to Adjudicating Authority) Rules, 2016 (for brevity ‘Rules’) for initiating corporate
insolvency resolution process. The ‘Corporate Debtor' also falls within the term
“Corporate Applicant” as defined in sub-section (5) of Section 5 of ‘the Code',
During hearing of the petition on 15.03.2017, it was pointed out by Mr. J.K. Grover
that form No.6 does not contain the information relating to the loan from HDFC
Bank against property and also the unsecured loan borrowed from Suman Jolly,
Promoter Director, Rita Jolly, promoter and Shri Jalesh Kumar Grover, Independent
Director. It was directed that the corporate applicant shall file the revised form
No.6 containing these details and the documents along with the affidavit of Suman
Jolly. The compliance has been made.
2. It is represented by Mr. Grover that the applicant company was incorporated
on 15.12.2003 with the Registrar of Companies, Punjab, Himachal Pradesh and

Chandigarh. Copy of certificate of incorporation with the Memorandum and Articles
of Association is at Annexure VII(B) having been allotted CIN
No.U33110CH2003PTC026619. The authorised share capital of applicant company
is Rs.12,00,00,000 i.e. 1,20,00,000 equity shares of Rs.10 each and its paid up
capital is Rs.9,71,91,000 i.e. 97,19,100 equity shares of the same value. The
applicant claims that presently the company has on its Board two Directors,
namely; Mr. Suman Jolly and Mr. Jalesh Kumar Grover, the Independent Director.
The fist of directors with their distinct DIN numbers has been filed with the affidavit
dated 14.03.2017 of Suman Jolly. It is represented that earlier Rita Jolly was
Promoter Director, but at present, she is not in the Board of Directors of the
Company. There are in all 56 shareholders of the company with major
shareholding held by Mrs. Rita Jolly to the extent of 7.61%, Suman Jolly 35.29%,
HBM Bio Ventures (NR) 7.17%, Baymill international Ltd. (NR) 45.98% as per the list
of shareholders Annexure VI(F). According to the applicant, the registered office of
the ‘Corporate Debtor’ is situated at Chandigarh and therefore, this Bench has the
territorial Jurisdiction to entertain and dispose of this petition.
3. The extract of the Resolution of the company 20.01,2017 is at page 529 whereby
Mr. Jalesh Kumar Grover Director is authorised to attend the hearing of the case
on behalf off the company and submit the information, as may be required by the
Tribunal. Mr. Grover also refers to the Board Resolution dated 20.01.2017 Annexure
VII (A), authorising Suman Jolly Director to file application under Section 10 of the
Code and the rules framed thereunder. Mr. Grover has also been authorised to
accept notice under the Code on behalf of the ‘Corporate Debtor’. The affidavit
dated 07.03.2017 in support of the contents of the application sworn in by Suman
Jolly is at page 30 of the paper book. The applicant company has mentioned the
residential address of Suman Jolly in column no.3 of form No.6 and also his
address of registered office of the company along with email address for service
of the process on behalf of the company.
4. It is further represented by the corporate applicant that the applicant company
has the following financial creditors :
Sl. Name of the Bank/ Address Total debt Amount in
No. Unsecured creditors default.
Secured creditors
1 State Bank of Patiala State Sank of Patiala CC limit of

Commercial Branch, Rs. 13 20 crs.
SCO 103-107, Madhya TL Rs.4.00 crs.
Marg, Sector 8-C, FlTL Rs.2.21 crs.
Chandigarh. WCTL Rs.9 14 crs.
LC/BG LIMITS
Rs.6.50 crs.
Total: Rs.35.05 crs. Rs.47.36
Amount crs.
Outstanding
Rs.35.15 crs.
2. State Bank of India, State Bank of India CC Limits Rs.10.80
SAM Branch, Sector crs
17-B, TL: Rs.3.20 crs.
Chandigarh-160017, FITL Rs.2.21 crs.
WCTL Rs.3.58 crs.
LC/BG
Limits Rs.5.30 crs.
Total: Rs.24.33 Rs.33.48 crs.
crs.
Amount
outstanding
Rs.24-48 crs.
3. HDFC Bank Ltd. SCO 153-155, Loan against NIL
Sector 8-C, Madhya property
Marg, Rs.2.49 crs.
Chandigarh- 160008. Amount
outstanding
Rs.1.56 crs.
Unsecured creditors/Loans
1. Mr. Suman Jolly H. NO. 54, Sector 9-A Debt raised Nil
(Promoter Director) Chandigarh Rs.1.81 crs.
Amount
outstanding
Rs.1 49 crs.
2. Mrs.Rita Jolly HNo.54, Sector 9-A, Debt raised Nil
(Promoter) Chandigarh. Rs.0.15 crs.
Amount
outstanding
Rs.0.12 crs.
3. Mr.Jalesh Kumar Flat No.202, GH-40 Debt raised Nil
Grover Sector 20, Panchkula Rs.0.78 crs.
(Independent Amount
Director) outstanding
Rs.0.78 crs.
It is thus, submitted that the total debt raised from financial creditors is Rs.64.61
crores, whereas the amount in default is Rs.80.84 crores The public deposits are
shown as Nil. It is represented that there is default of an amount of
Rs.11,36,86,789/- in respect of Government dues as per list Annexure II (A);
Rs.4,56,41,914/- towards operational creditors (Raw Material) as per list Annexure
II (M); Rs.4,28,86,633/- towards workers dues as per list Annexure II (P) and the
default in respect of service providers dues to the tune of Rs.2,40,953/-.
5. The applicant has proposed the name of Interim Resolution Professional as
Mr. Purushottam Ram Singhania, H. No.3029, Ajanta Co-Op. House Society, Sector
51-D, Chandigarh-160047, having email-address prsinghania@yahoo.com.
Registration No.IBBI/IPA-001/IP-00079/2O16-17/1747. The Insolvency
Professional has also filed the written communication in form No.2 of Rules,
Annexure-III to act as Insolvency Professional, if an order admitting the instant
petition is passed.
6. Insolvency Professional has also declared that he is eligible to be appointed
as a resolution professional in respect of 'Corporate Debtor' in accordance with
the provisions of the Insolvency and Bankruptcy Board of India (Insolvency
Resolution Process for Corporate Persons) Regulations, 2016. He has also declared
that no disciplinary proceedings are pending against him with the Board or Indian
Institute of Insolvency Professionals of ICAI. It is also declared that Mr. Purushottam
Ram Singhania is not presently serving as Interim Resolution Professional/
Resolution Professional/Liquidator in any proceedings. It is stated by the proposed
Interim Professional (IP) that he is competent to function as Interim Insolvency
Professional as required by IBBI (Insolvency Professional) Regulation, 2016. It is
represented that this declaration is duty signed and certified by Mr. Purushottam
Ram Singhania.
7. The applicant further represents that due to the defaults committed in payment
of dues of the Bank, State Bank of Patiala, the lead Bank issued a notice dated
04.03.2015 under Section 13(2) of SARFAESI Act, 2002 [Annexure 1(C)] stating that
an amount of more than Rs.47 crores was outstanding against the applicant.
When the matter was listed on 10.03.2017, it was represented that the notice
Annexure I (C) was stayed by the Hon’ble High Court in CWP No.18449 of 2015,
but with repeal of SICA, the writ petition has been dismissed by the Hon’ble High
Court on 13 12.2016. It was further submitted by Mr. Grover that another notice has
been received from the District Magistrate, UT, Chandigarh asking the ‘corporate
debtor' and the two Directors Suman Jolly and Rita Jolly to appear before the
District Magistrate in the application filed by the State Bank of Patiala for seeking
assistance of the District Magistrate in taking over possession of the Industrial
site No.181/5, Industrial Area, Phase-1, Chandigarh under Section 14 of SARFAESI
Act, 2002.
8. The applicant further represented that a similar notice dated 10 03.2015 under
SARFAESI Act, 2002 was also received from State Bank of India Annexure I(H)
stating that there was an amount of more than Rs.33 crores outstanding against
the applicant. According to Mr. Grover, this notice was also stayed by the Hon'ble
High Court in the same writ petition. The petitioner was directed to file copy of the
writ petition as well as the other documents referred to in para no.7 above and
this paragraph along with the affidavit. The compliance has since been made
and requisite documents have been filed.
9. It is also represented by the applicant that the Board of Industrial and Financial
Reconstruction (BFR) declared the applicant company as sick industrial unit in
terms of Section 3(1)(O) of SICA and appointed State Bank of Patiala as operating
agency. Copy of order of BIFR dated 31.12.2012 is at page 509/516 of the paper
book. It is also represented that an enquiry was still going on. The last order
passed by the BIFR is stated to be dated 07.11.2016 at page 523 of the paper book
suggesting that the proceedings were adjourned to 11.01.2017. In the meanwhile
SICA was repealed. It is submitted that the instant petition has been filed in terms
of eighth Schedule of the 'Code’ as provided in Section 252 thereof. Eighth schedule
further says that no fees shall be payable if a reference is made under IB 'Code’
2016 within 180 days from the commencement of ‘the Code’, in case above
proceedings under SICA have abated due to its repeal.
10. It is contended that the 'corporate debtor' proposes to negotiate with the
financial creditors for settlement of the dues, in case the Insolvency Professional
is appointed in terms of the provisions of the ‘Code’. The copies of the corporate
debtor’s financial statement i.e. audited balance sheets for the last two financial
years ending on 31.03.2015 and 31.03.2016 are attached as Annexure V (A) and
V (B) respectively. Further the provisional financial statement for the current year
made upto 28.02,2017 is at Annexure V (C) (at page no.456 of paper book). All
these financial statements are duly attested by Suman Jolly the Director of the
applicant- company, for consideration of the Tribunal.
11. It is also represented that mortgage of the current assets of the company both
present and future and of the fixed assets was created on 07.03.2011, for which,
the State Bank of Patiala issued the sanction letter, copy of which is Annexure I (B).
The value of the stock, fixed assets and the debtors is also stated as Rs.15.81
crores as per the balance sheet ending on 28.02.2017.
12. It is stated that the ‘corporate debtor’ created equitable mortgage of industrial
property No.181/5, Industrial Area, Phase-1, Chandigarh on 21.11.2001. The
estimated value of this property is 10 49 crores as per the creditor as on 01.06.2015.
Copy of the estimate is at Annexure I (E). The equitable mortgage of the land
measuring 8 bighas 19 biswas situate at Baddi (HP) was also created on
17,10.2008. The estimated value of this property is 1.12 crores as per the valuation
report dated 01.06.2015 as per the Valuer appointed by the State Bank of Patiala.
Another equitable mortgage was also created in respect of Plot No.196, Industrial
Area, Phase 1, Panchkula (Haryana), which property is in the name of Intelligent
Medical Services Pvt. Ltd., a group company of the applicant. It is represented by

the applicant that the Directors of this company and of the ‘corporate debtor’ are
the same. The date of creation of the mortgage is 21.11.2007 with estimate value
of Rs. 14.17 crores as per the creditor State Bank of Patiala. The copy of valuation
report dated 01.06.2015 is Annexure I (E).
13. It is further stated that the residential property No. 54, Sector 9, Chandigarh
in the name of Shubh Jolly, the mother of Suman Jolly Director, was created
with HDFC and second charge has been created in favour of State Bank of
Patiala by equitable mortgage created on 21.11.2007. The estimated value of
this property as per creditor was Rs.23.86 crores. The residual estimated
value is Rs. 19.8 crores as per the creditors. The valuation report dated
01.06.2015 of the Valuer is at Annexure I (E). Rest are the details of personal
guarantees furnished by Suman Jolly, Rita Jolly, Late Shubh Jolly and of M/s
Intelligent Medical Services (P) Ltd., all deeds dated 17.10.2008. The certificates
of charge issued by the Registrar of Companies (ROC) for State Bank of India
are also annexed.
14. The instant application filed in form 6 in terms of Section 10 of ‘the Code’ by the
Corporate Debtor. Section 10 the ‘Code’ is extracted hereinunder:
may be prescribed.
(a) admit the application, if it is complete: or
(b) reject the application, If it is incomplete.
Authority.
(5) The corporate insolvency resolution process shall commence from
the date of admission of the application under sub-section (4) of this section.
The above provision of the ‘Code’ discloses that the following procedures are
required to be completed by a ‘Corporate Debtor’ for initiating the process of
insolvency :
Section 10 of the ‘Code’ confers a discretion on this Tribunal to either admit or
reject the application and in case of rejection to give an opportunity to the applicant
The term “Corporate Debtor” has been defined under Section 3 (8) of Part-
I of the ‘Code’ to mean a Corporate Person, who owes a debt to any person and
‘default’ is defined under Section 3 (12) of Part-I of the Code to mean “non-payment
of debt when whole or any part or instalment of the amount of debt has become
due and payable and is not repaid by the debtor or the corporate debtor, as the
case may be”.
15. As provided in Rule 7(1) of the Rules, the Corporate Applicant has to make an
application under Section 10 of the ‘Code’ in Form 6 accompanied with
documents and records required therein and as specified in IBBI (Insolvency
Resolution Process for Corporate Persons) Regulations, 2016. Since we have
already dealt in detail in the opening paragraphs supra of this order relating to
information furnished, we are not repeating the same for sake of brevity, as the
essential particulars as contemplated, have been provided by the Applicant.

and year ending 31.03.2016 and unaudited financial statement for the period
made upto 28.02.2017. The Schedule of Creditors, both secured and unsecured
has been made upto 28,02.2017 attested by the director of the applicant company.
17. The applicant has also named Mr. Purushottam Ram Singhania, the Interim
Resolution Professional as required under the ‘Code’, the application being an
application made by a ‘Corporate Debtor’ with Registration No.IBBI/IPA-001/IP-
00079/2016-17/1747. The Interim Resolution Professional named in the
application has duly filed Form No.2 as prescribed under the Rules, In which the
declaration as required to be made to the effect that no disciplinary proceedings
are pending against him, which is a pre-requisite as per Section 16 of the ‘Code’
has also been made. It is, also stated in the application under Section 10 of the
`Code’ that the applicant is not barred from filing present application as provided
in Section 11 of the ‘Code’ and that no liquidation order has ever been passed
against the applicant.
18. When the matter was listed on 10.03.2017, the applicant was directed to
furnish the information of the accumulated profits/loss of the ‘corporate debtor’
as on 28.02.2017, 31.03.2016 and 31.03.2015. Similarly, the applicant was directed
to furnish details of long term borrowings and other liabilities for the aforesaid
years, the current liabilities and the revenue from operations. The compliance
has been made by way of the affidavit dated 14.03.2017 of Suman Jolly. The same
are reproduced as under:-
Accumulated Profit/loss of the ‘corporate debtor’:
As on 28.02.2017 - (Rs.116,11,99,813/-)
As on 31.03.2016 - (Rs.112,48,73,266/-)
As on 31.03.2015 - (Rs.109,76,78,197/-)
Long Term borrowings and other liabilities discloses the following for the
above years:
As on 28.02.2017 63,58, 78,042/-
As on 31.03,201 6 63,95,39,584/-
As on 31.03.2015 65,73,71,271 /-
As on 28.02.2017 24,04.94,144/-
As on 31.03.2016 18,68,81,479/-
As on 31.03.2015 19,42,31,616/-
As on 28.02.2017 26,55,94,764/-
As on 31.03.2016 27,43,22,166/-
As on 31.03.2015 32,43,91,421 /-
19. The figures extracted above indicate the losses with continued fall in revenue,
therefore, it seems that the applicant has fallen into debt trap and is competent to
set in motion the insolvency resolution process as contemplated under the ‘Code’.
On the basis of the aforesaid statements of the affairs of the company, the
outstanding amount as per the books of the company towards financial creditors
is Rs.63.58 crores (including unsecured loans from promoters/directors amounting
to Rs.2.39 crores) and the amount in default towards financial creditors is Rs.80.84
crores. It is represented that the total amount of operational creditors (Raw Material
Suppliers) is Rs.8.94 crores and the amount in default is Rs.4.56 crones. The total
amount of operational creditors (Government dues) is Rs.7.73 crores and the
amount in default is Rs.11.36 crores. The total amount of operational creditors
(Workers/Employees) is Rs.6.44 crores and the amount in default is Rs.4.29 crores.
The total amount of operational creditors (Service providers) is Rs.0.95 crores and
the amount in default is Rs.0.24 crores.
It is, however, observed that the applicant company save some sketchy particulars
has not given any road map as to how it is going to keep itself afloat as a going
concern. However, keeping in perspective the objects for which the ‘Code’ has
been brought into force and to balance the interest of all stakeholders, we are
satisfied that the instant application warrants to be admitted to prevent further
erosion of capital and to safeguard the assets of the Applicant Company/Corporate
Debtor. For the reasons aforementioned while admitting the application, we issue
the following directions :
(i) Appoint Mr. Purushottam Ram Singhania, H. No.3029, Ajanta Co-Op.
House Society, Sector 51-D, Chandigarh-160047, Email - address
prsinghania@yahoo.com, Registration No. IBBI/IPA-00 1 /IP-00079/2016-
17/1747, a Registered Insolvency Professional (IRP) as the Interim
Resolution Professional as contemplated under Section 16 of the ‘Code’
and his term of appointment shall be for a period of thirty days from the
date of this order or as may be determined by the Committee of Creditors
whichever is earlier;
(ii) In terms of Section 17 of the ‘Code’, from the date of his appointment, the

report to the Interim Resolution Professional, who shall be enjoined to
and strictly perform all the duties as are enjoined on the interim Resolution
Professional under Section 18 and other relevant provisions of the ‘Code’
Debtor etc. as provided in Section 18(1) (f) of ‘Code’. The Interim Resolution
the ‘Code’, all the Rules framed thereunder by the Board or the Central
profession and as an insolvency Professional with high standard of ethics
and moral.
Committee of Creditors at the earliest but not later than two weeks from
contemplated under Section 14 of the ‘Code’ as under:
22. The Interim Resolution Professional appointed by this Tribunal

is also directed to cause a public announcement within 3 days from the date
of this order as contemplated under Regulation 6 of the Insolvency and Bankruptcy
Board of India (Insolvency Resolution Process for Corporate Persons) Regulations,
2016 of the initiation of Corporate Insolvency Resolution Process in terms of
Section 13(1)(b) of the ‘Code’ read with Section 15 calling for the submission of
claims against the Corporate Debtor.
Debtor. Copy of this order be supplied to the authorised representative of applicant
immediately, who shall deliver a copy instantly to the Interim Resolution
Professional.
(Deepa Krishan) (Justice R.P. NAGRATH)
March 16, 2017.
M/S HIND MOTORS MOHALI PVT.LTD.

Name of the Corporate Debtor/ M/s Hind Motors Mohali Pvt. Ltd.
Applicant
Company Petition No. CP(IB) No. 03(Chd)/2017

Amount Involved Rs. 7.12 Crores

1. M/s Hind Motors Mohali Pvt. Ltd. (“Corporate Debtor” or “CD”) filed
application under section 10 of the Code read with Rule 7(1) of the Insolvency
and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for
initiating corporate insolvency resolution process.
2. It was incorporated on 11.07.2011 with ROC Punjab, Himachal Pradesh
and Chandigarh.
3. The authorized share capital of the CD is Rs. 2 crores divided into 20,00,000
equity shares of Rs. 10 each and issued, subscribed and paid up capital is
Rs. 1.01 crore divided into10,10,000 equity shares of Rs. 10 each.
4. The CD has Union Bank of India as the financial creditor against which Rs.
3,08,22,250.00 is the amount of default and one Insta Glib Technologies,
being the Paint Supplier, is the operational creditor against which Rs.
99,869.00 is the amount of default. Apart from the above, the CD owed an
amount of Rs. 27,430.00 to its staff and workers.
5. The CD had created equitable mortgage of its land measuring 13 kanals 8
marlas, situated at village Raje Majra near Ropar on 17.10.2011 in favour
of Union Bank of India. The estimated value of the property was Rs. 1.55
crore. Further, on 10.05.2013, the CD created equitable mortgage in respect
of the land and building on plot no. B-16, Industrial Area, Phase-II, Mohali,
Punjab havingestimated value was Rs. 12.10 crore in favour of Union
Bank of India, 6. The CD owed a sum of Rs. 3.09 crores to Union Bank of
India which had initiated proceedings under SARFAESI before the DRT. The
CD, which was incorporated as a subsidiary of Hind Motors India Ltd.,
also owes a sum of Rs. 3,12,56,635/- to Hind Motors India Ltd. and Rs.
1,05,01,121/- to M/s Hind Motors. Both Hind Motors India Ltd and M/s
Hind Motors had also initiated proceedings under section 10 of the Code
and the application in respect to both of them was admitted by the
Chandigarh Bench on 14.02.2017.

A. The Bench took note of section 10 of the Code and provisions of Rule 7(1)
of the IBC (Application to Adjudicating Authority) Rules, 2016.
B. It was observed that save for some sketchy particulars; the CD had not
given any road map as to how it is going to keep itself afloat as a going
concern. However, keeping in view the objects for which the Code was
enacted, the application was admitted.
i. Appointed Mr. Manik Goyal, as an Interim Resolution Professional
for a period of thirty days.
Code
iii. IRP was directed to cause a public announcement within 3 days
Regulations, 2016 IRP to file report of events before the Bench every
week in relation to the Corporate Debtor.
IN THE NATIONAL COMPANY LAW TRIBUNAL,

CP (IB) No.03 (Chd)/2017.
Coram: HON’BLE MR. JUSTICE R.P. NAGRATH,
MEMBER (JUDICIAL).
HON’BLE DEEPA KRISHAN, MEMBER (TECHNICAL).
In the matter of:
M/s Hind Motors Mohali Pvt. Ltd.
B-16, Industrial Area,
Phase-2, Mohali (Pb)-160055.
Email: paed@hindmotors.in ....Corporate Applicant.
Application to initiate corporate insolvency resolution process in respect of M/s
Hind Motors Mohali Pvt. Ltd. under the Insolvency and Bankruptcy Code, 2016.
Present : Mr. Ajay K. Jain with Shri Rakesh Bhatia and Mr. Atanu Mukherjee
Advocates for applicant.
Mr. Manik Goyal, Chartered Accountant, Insolvency Professional.
ORDER
(ORAL)
This is an application filed by M/s Hind Motors Mohali Pvt. Ltd., a “Corporate
Debtor” itself in Form 6 as prescribed by sub rule (1) of Rule 7 of the Insolvency and
Bankruptcy (Application to Adjudicating Authority), Rules, 2016 (for brevity `the
Rules’) for initiating corporate insolvency resolution process. This form is filed
with the application under Sections 10, 13 and 14 of the Insolvency and Bankruptcy
Code, 2016 (for brevity ‘the Code’) at the instance of the ‘corporate applicant’. The
‘corporate debtor’ also falls within the term “corporate applicant” as defined in
sub-section (5) of Section 5 of the Code.
2. It is represented that the applicant company was incorporated on 11.07.2011
with the Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh, as
per the Certificate of Incorporation Annexure B, having been allotted Corporate
Identity Number (CIN No.U50100PB2011 PTC035267. The authorised share capital
of the company is Rs.2 crores i.e. 20,00,000 equity shares of Rs.10/- each and
issued, subscribed and paid up capital is Rs.1.01 crore i.e. 10,10,000 equity shares
of Rs.10/- each. The applicant claims that presently the company has on its Board
two Directors, namely; Ashish M. Gupta and Rajesh Sharma having separate
distinct DIN numbers as per Annexure W. There are in all three shareholders of
the company as per Annexure ‘C’ namely; Ashish Mohan Gupta, Shuchi Gupta
and Hind Motors India Ltd with major shareholding of M/s Hind Motors India Ltd.
to the extent of 50.50%.
3. Annexure ‘D’ is the copy of the Board of Directors resolution authorising Ashish
Mohan Gupta, Director to initiate the corporate insolvency resolution process
and to do all the necessary acts in the said proceedings. Later on another resolution
of the Company dated 04.02.2017 was filed disclosing the address of Ashish
Mohan Gupta for communication purposes and also authorising him to accept
the process on behalf of the company.
4. The learned counsel for the applicant has represented that the applicant
company has the following financial creditors:
Sr. Name of the Bank/ Address. Total debt Amount in
No. Operational creditors default.
1. Union Bank of India. Main Branch, CC limit of Rs.3,08,22,250.00

SCO No.64/65, Rs.4,00,00,000
Bank Square,
Sector 17-B,
Chandigarh-
160017.
2. Operational Creditor.
Insta Glib Technologies SCO 839, 2nd Paint Rs.299,869

Floor, Cabin, No.2, suppliers.
NAC, Manimajra,
Chandigarh
Apart from the above, the petitioner company also owes an amount of Rs.27,430.00
to its staff and workers. It is also represented that there is no depositor as creditor
of the applicant company.
5. The applicant has also proposed the name of Interim Resolution Professional
as Mr. Manik Goyal, CA, SCF 174, Grain Market, Sector 26, Chandigarh having
registration No.IBBI/IPA-01/2016-17/549. Mr. Manik Goyal, proposed Insolvency
Resolution Professional has also filed written communication in Form No.2 of the
‘Rules’, to act as Insolvency Resolution Professional, if an order admitting the
application, is passed. He has also declared that he is eligible to be appointed as
a resolution professional in respect of ‘Corporate Debtor’ in accordance with the
provisions of the Insolvency and Bankruptcy Board of India (Insolvency Resolution
Process for Corporate Persons) Regulations, 2016. He has also declared that no
disciplinary proceedings are pending against him with the Board or Indian Institute
of Insolvency Professionals of ICAI. It is also declared that Mr. Manik Goyal is not
presently serving as Interim Resolution Professional/resolution professional/
liquidator in any proceedings. Mr. Manik Goyal has filed another declaration in
form 2 dated 03.02.2017 at page 34-A of the paper book furnishing complete
information with regard to the paragraph (vi) of form 2 to the effect that, (a) he is
eligible to be appointed as an independent director on the Board of the applicant
company in terms of Section 149 of the Companies Act, 2013; (b) He is not a
related party of the applicant company; and (c) he is not an employee or proprietor
or a partner etc. of applicant company. Mr. Manik Goyal has also recorded his
statement on oath today that he has been appointed as Insolvency Resolution
Professional in CP (IB) No.1 (Chd) of 2017 M/s Hind Motors Ltd. vide order of this
Tribunal, dated 14.02.2017 and further that the applicant company in this case
belongs to the same group of companies having common directors.
6. Learned counsel for the applicant further represents that due to the defaults
committed in payment of loan, the Union Bank of India has served the applicant
company with a notice Annexure-I, dated 16.06.2016 under Section 13 (2) SARFAESI
Act, 2002 along with notice under Section 13 (4) of SARFAESI Act published in ‘The
Tribune’ newspaper, dated 24.09.2016. The notice published in “The Tribune”
proclaims that the Authorised Officer has taken possession of the properties
mentioned therein. With regard to the transaction with unsecured creditor, the
applicant company has filed the list of the Bills/Invoices along with one copy of
Bills/Invoices of the transactions as at Annexure ‘J’.
7. It is also represented that by way of security, equitable mortgage of the land
measuring 13 kanals 8 marlas, situated at village Raje Majra near Ropar owned
by M/s Hind Motors India Limited was created on 17.10.2011 in favour of the Bank.
The valuation of this property was done by the Creditor Bank, which is to the tune
of Rs.1.55 crore and the copy of the estimate of the valuer is Annexure ‘F’-
8. It is further represented that equitable mortgage in respect of the land, Building
on plot No.B-16, Industrial Area, Phase-II, Mohali, Punjab measuring 10 kanals
owned by M/s Hind Motors India Limited was created in favour of Union Bank of
India on 10.05.2013 and that equitable mortgage was extended by the Bank in
respect of the loan of the applicant-company. The estimated value of the property
as per the creditor is Rs. 12.10 crores as per the estimate prepared by the valuer
Annexure ‘G’. The applicant company has attached the Certificate of Registration
of the charge issued by the Registrar of Companies (ROC) in the year 2011 and
modified in the year 2013 as Annexure ‘H’. Both the aforesaid mortgages are
created in respect of the loans of the applicant as well as M/s Hind Motors India
Ltd. and M/s Hind Motors Ltd.
9. We have heard learned counsel for the applicant. The instant application filed
in form 6 has been filed in terms of Section 10 of the Code by the Corporate Debtor.
Section 10 of the ‘Code’ is extracted herein under:
may be prescribed.
information relating to-
resolution professional
Authority.
insolvency:
(iii) On the satisfaction of (I) and (ii) above a Corporate Applicant may file an
(v) Along with the application as in (iv) above, information relating to books
of accounts and other documents relating to such period as may be
specified.
the application and in case of rejection to give an opportunity to the applicant
The term “Corporate Debtor” has been defined under Section 3 (8) of Part-I of
the `Code’ to mean a “Corporate Person, who owes a debt” to any person and
“default” is defined under Section 3 (12) of Part-I of the `Code’ to mean “non-
payment of debt when whole or any part or instalment of the amount of debt has
become due and payable and is not repaid by the debtor or the corporate debtor,
as the case may be”.
10. The learned counsel for the applicant has also made a statement on
instructions that no liquidation order has been passed against the applicant and
therefore, the applicant cannot be considered as a person not entitled to make an
application as per provisions of Section 11 of ‘the Code’. There is also the statement
in this regard made by the applicant in the applications under Sections 13, 14 and
10 of ‘the Code’ to the effect that the instant application is not barred by Section 11
of `the Code’. The averments in the application are supported by the affidavit of
Ashish Mohan Gupta, Director of the Company.
11. The forms and particulars to be contained in application as well as the manner
of filing and the fee required to accompany the application seems to have been
prescribed in the rules termed under Insolvency and Bankruptcy (Application to
Adjudicating Authority) Rules, 2016. As provided in Rule 7 (1) of the said Rules, the
Corporate Applicant has to make an application under Section 10 of the Code’ in
Form 6 accompanied with documents and records required therein and as
specified IBBI (Insolvency Resolution Process for Corporate Persons) Regulations,
2016. Since we have already dealt in detail in the opening paragraphs supra of
this order relating to information furnished, we are not repeating the same for
sake of brevity, as the essential particulars as contemplated have been provided
by the Applicant in the application with further particulars as pointed out by the
Tribunal.
statements have been filed for preceding two years i.e. the year ending 31.03.2015
and 31.03.2016 and unaudited financial statement for the period made upto
15.01.2017. The Schedule of Creditors, both secured and unsecured has been
made upto 15.01.2017 attested by the director of the applicant company.
13. The applicant has also named the Interim Resolution Professional as required
under the ‘Code’, the application being an application made by a Corporate
Debtor. Mr. Manik Goyal has been registered by the Board with Registration
No.IBBI/IPA/01/2016-17/549 and his enrolment number is IPA is IPA-01/2016-17/
IP-00326. The proposed resolution professional has given his Registration No.IBBI/
IPA-IP/00326/2016-17 in Form 2. The Interim Resolution Professional named in
the application has duly filed Form No.2 as prescribed under the Rules’ in which
the declaration as required to be made to the effect that no disciplinary proceedings
are pending against him, which is a pre-requisite as per Section 16 of the Code
has also been made.
14. The learned counsel for the applicant has represented that the financial
information given by the applicant for the period ending 31.03.2015, 31.03.2016
as well as the provisional financial statement for the period ending 15.01.2017
discloses the following.
HIND MOTORS MOHALI PVT. LTD.
Accumulated profit/loss of the ‘corporate debtor’:
As on 15.01.2017 - 4,90,65,932
As on 31.03.2016 -4,72,56,084
As on 31.03.2015 -2,71,61,201
As on 31.03.2014 -1,99,81,865
years:
As on 15.01.2017 3,34,66,888
As on 31.03.2016 3,22,90,739
As on 31.03.2015 6,30,49,365
As on 31.03.2014 6,50,02,098
As on 15.01.2017 4,18,57,625
As on 31.03.2016 4,59,97,674
As on 31.03.2015 35,21,629
As on 31.03.2014 22,80,998

As on 15.01.2017 46,15,691
As on 31.03.2016 52,98,082
As on 31.03.2015 97,14.998
As on 31.03.2014 8,77,13,593
15. The figures extracted above indicate further losses with continued fall in
operation of the applicant. It seems to have fallen into a debt trap and has admitted
default thereby competent for setting in motion the Insolvency Resolution Process
as contemplated under the Code. On the basis of the aforesaid statement of
affairs of the company and as per averment contained in the application filed
under Sections 13 and 14 read with Section 10 of the Code, supported with affidavit
of Ashish Mohan Gupta, Director, the applicant owes an amount of Rs.3.09 crores
to Union Bank of India for which proceedings under SARFAESI Act, 2002 have also
been initiated. It has also been represented that the applicant intends to settle
with the Bank amicably under the onetime settlement scheme and therefore, the
action initiated under SARFAESI Act has not been challenged before the Debt
Recovery Tribunal. The applicant proposes to settle with the Bank for an amount
of Rs.1.25 crore to be paid in 12 months.
16. The Corporate Applicant has to pay a sum of Rs.3,12,56,635/- to Hind Motors
India Ltd. and Rs.1,05,01,121/- to M/s Hind Motors. It is represented that both Hind
Motors (India) Ltd. and Hind Motors Ltd. have filed application under Section 10 of
the Code before this Tribunal for initiating corporate insolvency resolution process.
The application in respect of M/s Hind Motors Ltd. has been admitted by this
Tribunal on 14.02.2017.
17. The Corporate Applicant proposes to inter-se settle the recoverable dues from
both Hind Motors India Ltd. and Hind Motors Ltd. under a comprehensive
resolution plan inter-alia merging the Corporate Applicant along with both Hind
Motors India Ltd. and Hind Motors Ltd. after seeking the approval of the financial
creditors.
18. The learned counsel for the applicant further represents on the
basis of averments made in the application under Sections 13 read with Sections
14 and 10 of the Code that the applicant company was incorporated as a Subsidiary
of Hind Motors India Ltd. and engaged itself in dealership of Volkswagon Cars. It
raised a loan of 6 crores from TATA Capital; 4 crores against plant and machinery
and equipments etc. and 2 crores as working capital from Union Bank of India.
However, the sale of the vehicles was much below the projections resulting into
losses suffered by the applicant company. The applicant repaid the loan taken
from TATA Capital by obtaining unsecured loan from holding company. The holding
company raised the funds by selling out of its asset located at Panchkula. It is also
represented that the applicant company has since shut down its business.
19. However, the applicant company save some sketchy particulars, has not
given any road map as to how it is going to keep itself afloat as a going concern.
However, keeping in perspective the objects for which ‘the Code’ has been
brought into force and to balance the interest of all stakeholders, we are satisfied
that the instant application warrants to be admitted to prevent further erosion of
capital and to safeguard the assets of the Applicant Company/Corporate Debtor.
For the reasons aforementioned while admitting the application, we issue the
following directions:
(i) Appoint Manik Goyal, SCF 174, Grain Market, Sector 26, Chandigarh, CA
No.IBBI/IPA/01/2016-17/549. a Practicing Chartered Accountant and
Registered Insolvency Professional (IRP) as the Interim Resolution
Professional as contemplated under Section 16 of ‘the Code’ and his term
of appointment shall be for a period of thirty days from the date of this
order or as may be determined by the Committee of Creditors whichever
is earlier;
(ii) In terms of Section 17 of ‘the Code’, from the date of his appointment, the
Professional under Section 18 and other relevant provisions of the Code’
Debtor etc. as provided in Section 18 (1) (f) of the Code. The Interim Resolution
the Corporate Debtor;
the code’, all the Rules framed thereunder by the Board or the Central
and moral;
the date of this Order;
(v) It is hereby directed that the Corporate Debtor its properties, personnel and
persons associated with the management shall extend all cooperation to
the Interim Resolution Professional in managing the affairs of the Corporate
Debtor as a going concern and extend all cooperation in accessing books
and records as well as assets of the Corporate Debtor; and
(vi) Interim Resolution Professional or the Resolution Professional as the case
may be, are further directed to look into the valuation of the mortgaged
property got assessed by the Bank at the time of grant of loan and compare
minutely with the statement, now attached as per the estimate of the
Valuer of the year 2016 in order to look into the variation, if any, for the
purpose of proposing a resolution plan.
20. Further in terms of Section 13 of ‘the Code’, this Tribunal declares a moratorium
in relation to the following matter as contemplated under Section 14 as follows:-
India (Insolvency Resolution Process for Corporate Persons) Regulations. 2016 of
the initiation of Corporate Insolvency Resolution Process in terms of Section 13(1)
(b) of the Code read with Section 15 calling for the submission of claims against
Debtor. Copy of this order be supplied to the applicant company and Interim
Resolution Professional forthwith.
(Deepa Krishan) (Justice R .P. Nagrath)
February 20, 2017.
HIND MOTORS LTD.

Name of the Corporate Debtor/ Hind Motors Ltd.
Applicant
Company Petition No. CP(IB) No. 01 (Chd.)/2017


1. Hind Motors Ltd. (“Corporate Debtor” or “CD”) was incorporated on June
11, 1990 with the Registrar of Companies, Punjab, Himachal Pradesh and
Chandigarh having authorised share capital of Rs. 3.50 crores and paid
up capital of Rs. 2.50 crores.
2. The CD submitted that the total amount owed to financial creditors was
Rs. 6,28,50,631/- while there were no operational creditors.
3. The CD represented that due to the defaults committed in the payment of
the loan, the Union Bank of India had served a notice dated 16.06.2016
under Section 13(2) of the SARFAESI Act, 2002 along with the notice under
Section 13(4) of SARFAESI Act, 2002 which were published in ‘The Tribune’
newspaper dated 24.09.2016.
4. It was further stated that CD had entered into a settlement with ICICI bank
with regard to Auto Loan account agreeing to repay the outstanding amount
in 12 instalments from 31.12.2016 to 23.11.2017.
5. It was also stated that out of the amount of Rs.62,38,960/- relating to the
public deposits there was a default of only 20% of the depositors but it had
represented to repay and refund 100% of the depositors.
6. The CD also represented that an equitable mortgage of land and building
on Plot no. B-16, Industrial Area, Phase-II, Mohali measuring 10 kanals
having a value of Rs. 12.10 crores and owned by M/S Hind Motors India
Ltd. was created on October 09, 2013 in respect of loan of M/S Hind Motors
Ltd., M/s Hind Motors India Ltd. and M/s Hind Motors Mohali Pvt. Ltd.
7. The CD had to recover a sum of Rs. 3.33 crores from Hind Motors India Ltd.
and a sum of Rs. 1.05 crores from Hind Motors Mohali Pvt. Ltd. Both these
companies had also filed an application under Section 10 of the Code,

2016 and hence CD proposed to inter-se settle the recoverable dues under
a comprehensive resolution plan.
8. The CD had proposed the name of Mr. Manik Goyal as Interim Resolution
Professional who gave necessary declarations under the Code.

A. The Bench noted the provisions of Sections 3(8), 3(12) and 10 of the Code
and observed that it owed an amount of Rs. 4.80 crores to Union Bank of
India for which proceedings had been initiated under SARFAESI Act, 2002.
It also noted the fact that the CD intended to settle the amount with the
Bank for a sum of Rs. 4.50 crores payable within 12 months.
B. The Bench also took note of the proposal of the CD to settle the inter se
debts between the CD and its group companies.
C. In view of the aforesaid grounds the application was admitted in order to
prevent further erosion of capital and to safeguard the assets of CD
D. It was observed that save for some sketchy particulars; the CD had not
given any road map as to how it is going to keep itself afloat as a going
concern. However, keeping in perspective the objects for which the Code
was brought in force, the application was admitted.
E. The Bench issued the following directions:
i. Appointed Mr. Manik Goyal, as an Interim Resolution Professional
(IRP) for a period of 30 days.
Code
iii. IRP was directed to cause a Public Announcement within 3 days
Regulations, 2016 IRP to file report of events before the Bench every
week in relation to the Corporate Debtor.
IN THE NATIONAL COMPANY LAW TRIBUNAL,

CP (IB) No.01 (Chd)/2017.
Coram:
In the matter of :
M/s Hind Motors Ltd.
Plot No.9, Industrial Area,
Phase-1, Chandigarh. ....Corporate Applicant.
Application to initiate corporate insolvency resolution process in respect of M/s
Hind Motors Ltd. under the Insolvency and Bankruptcy Code, 2016.
Present: Mr. Ajay K. Jain and Mr. Atana Mukherjee Advocates for applicant.
Mr. Manik Goyal, Chartered Accountant Insolvency Professional.
ORDER
This is an application filed by M/s Hind Motors Ltd., a “Corporate Debtor” itself in
form 6 as prescribed by sub rule (1) of rule 7 of the Insolvency and Bankruptcy
(Application to Adjudicating Authority), Rules, 2016 for initiating corporate
insolvency resolution process. Apparently such an application lies under Section
10 of Insolvency and Bankruptcy Code, 2016 (for brevity to be referred hereinafter
as ‘IBC’) at the instance of the ‘corporate applicant’. The ‘corporate debtor’ also
falls within the term “corporate applicant” as defined in sub-section (5) of Section
5 of ‘IBC’.
2. It is represented that the applicant company was incorporated on 11.06.1990
with the Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh, as
per the Certificate of Incorporation Annexure B, having been allotted CIN
No.UN34102CH1990PLC010459. The authorised share capital of the company is
Rs.3.50 crores i.e. 3,50,000 equity shares of Rs.100 each and issued, subscribed
paid up capital is Rs.2.50 crores i.e. 2,50,000 equity shares of Rs.100 each. The
applicant claims that presently the company has on its Board three Directors, namely;
Ashish Mohan Gupta Director, Rajesh Sharma Director and Dev Sharma having
separate DIN numbers as per Annexure ‘A’. There are in all seven shareholders of
the company with three of them namely; Ashish Mohan Gupta, Shuchi Gupta and
Hind Inns & Hotels Ltd., as per the list Annexure ‘C’ having major shareholdings.
3. Annexure ‘D’ is a copy of the Board of Directors resolution dated 17.01.2017

authorising Mr. Ashish Mohan Gupta, Director to initiate the corporate insolvency
process before the Tribunal under the aforesaid Rules. The application also
discloses the address of Mr. Ashish Mohan Gupta. The resolution, however, did
not contain the authorisation to Mr. Ashish Mohan Gupta to accept the service of
the process on behalf of the applicant. When the matter was listed on 03.02.2017
before the Tribunal, time was granted to remove this defect and this defect has
since been removed by attaching another resolution of the company dated
04.02.2017, certified to be true copy by Mr. Ashish Mohan Gupta, Director.
4. It is represented by learned counsel for the applicant that the applicant has
presently the following financial creditors namely;
Sr. Name of the Bank/ Address Total debt Amount in
No Unsecured creditors default
1. Union Bank of India. SCO 64165, Bank CC limit of Rs.4,74,51,175
Square, Sector Rs.4.00,00,000
17-B, Chandigarh Term loan of Rs.9,82,888
160017. Rs.1 ,00,00,000
2. ICICI Bank Limited. Sector 9, Demo Car Rs.5,47,275

Chandigarh. Loan
3. State Bank of India, Sector 17, Inventory Rs.76,30,333

Chandigarh- Funding.
160017.
4. Unsecured creditors. As per list Annexure Public Rs.62,38,960

‘F’ Deposits
It is also represented that there are no operational creditors of the company.

5. The applicant has also proposed the name of Interim Resolution Professional
as Mr. Manik Goyal, CA, SCF 174, Grain Market, Sector 26, Chandigarh having
registration No.IBBI/IPA-01/2016-17/549. Mr. Manik Goyal proposed Insolvency
Resolution Professional has also filed written communication in Form No.2 of the
Insolvency and Bankruptcy (Application to Adjudicating Authority), Rule 2016, to
act as Insolvency Resolution Professional, if an order admitting the application, is
passed. He has also declared that he is eligible to be appointed as a resolution
professional in respect of ‘Corporate Debtor’ in accordance with the provisions of
the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for
Corporate Persons) Regulations, 2016. He has also declared that no disciplinary
proceedings are pending against him with the Board or Indian Institute of
Insolvency Professionals of ICAI. It is also declared that Mr. Manik Goyal is not
presently serving as interim resolution professional/resolution professional/
liquidator in any proceedings.
6. When the matter was listed on 03.02.2017 before the Tribunal, it was observed
that clause (vi) of Form 2 did not contain any disclosures especially with regard to
Regulation 3 of the aforesaid Regulations. This defect pointed out in the order
dated 03.02.2017, has since been removed. It is stated by the proposed Interim
Profession (IP) that he is competent to function as Interim Insolvency Professional
as required by IBBI (Insolvency Professional) Regulation 2016 at page 54-A and
54-B of the paper book. This declaration is duly signed and certified by Mr. Manik
Goyal.
7. During arguments, learned counsel for the applicant represented that due to
the defaults committed in payment of loan, The Union Bank of India, has served
a notice dated 16.06.2016 under Section 13 (2) SARFAESI Act, 2002 along with
notice under Section 13 (4) of SARFAESI Act published in The Tribune’ newspaper,
dated 24.09.2016 and the document to support the above contention is Annexure
I (COLLY). The notice published in The Tribune” proclaims that the Authorised
Officer has taken possession of the properties mentioned therein. With regard to
the Auto Loan Account obtained from ICICI Bank, the applicant has filed Annexure
‘J’ the settlement with the Bank agreeing to repay the amount in 12 instalments
from 31.12.2016 to 23.11.2017.
8. In addition to the above, learned counsel for the applicant submitted that
though out of the amount of Rs.62,38,960/- relating to the public deposits there is
default of only 20% of the depositors, but the company has represented to repay
and refund 100% to the depositors as per the schedule which may be approved
by the Tribunal. It is further represented by learned counsel for the applicant that
the copies of the corporate debtors financial statements for the last two financial
year ending i.e. as on 31.03.2015 and 31.03.2016 have been made Annexures to
the application. Further the provisional financial statement for the current year
made up to 15.01.2017 duly signed by Ashish Mohan Gupta, Director of the
company, has also been filed for consideration of the Tribunal.
9. It is also represented that as a security equitable mortgage of land and building
on plot No.B-16, Industrial Area, Phase-II, Mohali measuring 10 kanals owned by
M/s Hind Motors India Ltd. was created on 09.10.2013. The estimated value of the
security as per creditor Bank is Rs.12.10 crores. Copy of the estimated value is
attached as Annexure ‘G’. This property is mortgaged with Union Bank of India in
respect of loan/debts for M/s Hind Motors Ltd., M/s Hind Motors India Ltd. and
M/s Hind Motors Mohali Pvt. Ltd. Annexure ‘H’ is the document of creation of
charge about this property with the Registrar of Companies with date of creation
as 12.10.2013. It was also stated that House No.161, Sector 27-A, Chandigarh was
kept as a comfort collateral security in the loan account. It is represented that this
property belongs to Kusum Gupta, but no equitable charge in respect thereof
was created.
10. We have heard learned counsel for the applicant. The instant application filed
in form 6 is apparently under Section 10 of the IBC Code by the Corporate Debtor.
Section 10 of the IBC is extracted hereinunder:
may be prescribed.
information relating to -
Authority.
insolvency:
the application and in case of rejection to give an opportunity to the applicant
The term “Corporate Debtor” has been defined under Section 3 (8) of Part-I of the
Code to mean a Corporate Person, who owes a debt to any person and `default’
is defined under Section 3 (12) of Part-I of the Code to mean “non-payment of debt
when whole or any part or instalment of the amount of debt has become due and
payable and is not repaid by the debtor or the corporate debtor, as the case may
be”.
11. The learned counsel for the applicant has represented that the applicant
earlier filed application under Section 74 (2) of the Companies Act, 2013 (for
brevity ‘2013 Act’) seeking extension of time in making payment to its depositors,
but it is contended that the instant application has been filed in view of coming
into force of ‘IBC’ with effect from 01.12.2016. Learned counsel further represents
that the instant application could not have been earlier filed and therefore, the
recourse was taken to a petition under Section 74 (2) of the 2013 Act for seeking
extension of time in paying the amount of depositors. It is submitted that the
recourse to the remedy under IBC is independent of any other law for the time
being in force.
12. Section 238 of the ‘IBC’ says that the provisions of this Code shall have effect
notwithstanding anything inconsistent therewith contained in any other law for
the time being in force or any instrument having effect by virtue of any such law.
The learned counsel for the applicant has also made a statement on instructions
that no liquidation order has been passed against the applicant and therefore,
the applicant cannot be considered as a person not entitled to make an application
as per provisions of Section 11 of the IBC Code.
13. The forms and particulars to be contained in application as well as the manner
of filing and the fee required to accompany the application seems to have been
prescribed in the rules termed under Insolvency and Bankruptcy (Application to
Adjudicating Authority) Rules, 2016. As provided in Rule 7 (1) of the said Rules, the
Corporate Applicant has to make an application under Section 10 of ‘IBC’ in Form
6 accompanied with documents and records required therein and as specified
IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
Since we have already dealt in detail in the opening paragraphs supra of this
order relating to information furnished, we are not repeating the same for sake of
brevity, as the essential particulars as contemplated have been provided by the
Applicant in the application with further particulars as pointed out by the Tribunal
on 03.02.2017.
and year ended 31.03.201 6 and unaudited financial statement for the period
made upto 15.01.2017. The Schedule of Creditors, both secured and unsecured
has been made upto 15.01.201 7 attested by the director of the applicant company.
15. The applicant has also named the Interim Resolution Professional as required
under the IBC, the application being an application made by a Corporate Debtor.
The designated Registrar of this Tribunal has also verified from the website of the
Insolvency and Bankruptcy Board of India that the name of Mr. Manik Goyal has
been registered by the Board with Registration No.IBBI/IPA/01/2016-17/549 and
his enrolment number is IPA is IPA-01/2016-171/P-00326. The proposed resolution
professional has given his Registration No.IBBI/IPA-IP/00326/2016-17 in Form 2.
The Interim Resolution Professional named in the application has duly filed Form
No.2 as prescribed under the Insolvency and Bankruptcy (Application to
Adjudication) Rules, 2016 in which the declaration as required to be made to the
effect that no disciplinary proceedings are pending against him, which is a
prerequisite as per Section 16 of the Code has also been made.
16. A perusal of the financial information filed for the period ending 31.03.2015,
31.03.2016 as well as for the period ending 15.1.2017 discloses the following:
HIND MOTORS LTD.
Accumulated profit/loss of the ‘corporate debtor’:
As on 15.01.2017 - 1,88,39,800
As on 31.03.2016 -1,78,43,256
As on 31.03.2015 68,66,426
As on 31.03.2014 68,58,507
years:
As on 15.01.2017 6,94,26,500
As on 31.03.2016 6,73,44,675
As on 31.03.2015 4,00,20,408
As on 31.03.2014 3,80,08,163
It is represented by the learned counsel for petitioner that in the financial statement
for the year ending 31.03.2016, the long term borrowing and other liabilities were
shown as Rs.4,14,67,888/-, but the figure has been reconciled by the provisional
balance sheet as on 15.01.2017 by re-grouping to arrive at the figure of
Rs.6,73,44,675/- by adding in the previous year amount the figure of
Rs.1,27,51,920/- as other payables, Rs.15,81,758/- as advance from customers
and reducing the figure of Rs.4,02,10,467/- as other receivables. With the above
statement, the difference in the amount of Rs.4,02,10,467/-, the figure of the last
year’s balance against current liabilities would also stand reconciled.
As on 15.01.2017 32,10,393
As on 31.03.2016 1,60,55,417
As on 31.03.2015 21,82,286
As on 31.03.2014 27,74,868
As on 15.01.2017 10,88,20,373
As on 31.03.2016 15,63,74,528
As on 31.03.2015 21,00,20,192
As on 31.03.2014 23,89,32,916
17. The figures extracted above indicate further losses with continued fall in
operation of applicant. It seems to have fallen into a debt trap and has admitted
default thereby competent for setting in motion the Insolvency Resolution Process
as contemplated under IBC. On the basis of the aforesaid statement of affairs of
the Company and as per averment contained in the application filed under Sections
13 and 14 read with Section 10 of the IBC, supported with the affidavit of Ashish
Mohan Gupta Director, the applicant owes an amount of Rs.4.80 crores to Union
Bank of India for which proceedings under SARFAESI Act, 2002 have also been
initiated. It was also stated that the applicant intends to settle with the Bank
amicably under the one time settlement scheme and therefore, the action initiated
under SARFAESI Act has not been challenged before the Debt Recovery Tribunal.
The applicant proposes to settle with the Bank for amount of Rs.4.50 crores to be
paid in 12 months.
18. It is further represented that in view of the adverse circumstances, the applicant
has violated in making repayment to the public depositors, some of whom have
filed consumer complaints against the Corporate Applicant and in some cases,
the decrees have also been passed. The depositors have filed execution
proceedings and in some of the cases arrest warrants have been issued against
the Managing Director and orders for two years imprisonment have been passed.
It is further contended that on the basis of the said application, that amount
outstanding towards the depositors in respect of M/s Hind Motors Ltd. & M/s
Hind Motors India Ltd. jointly are around Rs.8.59 crores and the Applicant had
therefore, approached this Tribunal under Section 74(2) of the 2013 Act with the
proposal to repay the depositors over a period of time. M/s Hind Motors Ltd. & M/
s Hind Motors India Ltd. jointly owes around Rs.18.59 crores to its depositors and
therefore, a joint application under Section 74 (2) of 2013 Act has been filed before
this Hon’ble Tribunal, wherein the proposal to repay the depositors was filed.
19. The Corporate Applicant has to recover a sum of Rs.3.33 crores from Hind
Motors India Ltd. on account of funds transferred by Union Bank of India to the
account of M/s Hind Motors India Ltd. The Corporate Applicant has also to recover
a sum of Rs.1.05 crores from M/s Hind Motors Mohali Pvt. Ltd. It is submitted that
both Hind Motors India Ltd. and Hind Motors Mohali Pvt. Ltd. have filed application
under Section 10 of IBC before this Tribunal for initiating corporate insolvency
resolution process.
20. The Corporate Applicant proposes to inter-se settle the recoverable dues
from both Hind Motors India Ltd. and Hind Motors Mohali Pvt. Ltd. under a
comprehensive resolution plan inter-alia merging the Corporate Applicant along
with both Hind Motors India Ltd. and Hind Motors Mohali Pvt. Ltd. under the IB
Code, 2016.
21. However, the applicant company save some sketchy particulars has not given
any road map as to how it is going to keep itself afloat as a going concern.
However, keeping in perspective the objects for which IBC has been brought into
force and to balance the interest of all stakeholders, we are satisfied that the
instant application warrants to be admitted to prevent further erosion of capital
and to safeguard the assets of the Applicant Company/Corporate Debtor. For the
reasons aforementioned while admitting the application, we issue the following
directions:-
(i) Appoint Manik Goyal, SCF 174, Grain Market, Sector 26, Chandigarh, CA
No.IBBI/IPA/01/2016-17/549, a Practicing Chartered Accountant and
Registered Insolvency Professional (IRP) as the Interim Resolution
Professional as contemplated under Section 16 of the IBC and his term of
appointment shall be for a period of thirty days from the date of this order
or as may be determined by the Committee of Creditors whichever is
earlier;
(ii) In terms of Section 17 of the IBC, from the date of his appointment, the
Professional under Section 18 and other relevant provisions of the IBC
‘including taking control and custody of the assets over which the Corporate
Debtor etc. as provided in Section 18(1)(f) of ‘IBC’. The Interim Resolution
IBC, all the Rules framed thereunder by the Board or the Central
and moral.
22. Further in terms of Section 13 of the IBC, this Tribunal declares a moratorium
in relation to the following matter as contemplated under Section 14 as follows:-
the initiation of Corporate Insolvency Resolution Process in terms of Section 13 1)
(b) of the Code read with Section 15 calling for the submission of claims against
Debtor. Copy of this order be supplied to the Interim Resolution Professional
forthwith.
(Deepa Krishan) (Justice R.P.Nagrath)
February 14, 2017.
CHENNAI BENCH 251
CHENNAI BENCH
252
CHENNAI BENCH 253
M/S VASAN HEALTH CARE PRIVATE LIMITED

Name of the Corporate Debtor M/s Vasan Health Care Private Limited
Name of Operational Creditor/ M/s Alcon Laboratories (India) Pvt. Ltd.

Applicant
Company Petition No. CA/1/(IB)/2017

Bench NCLT, Chennai Bench

1. M/s. Alcon Laboratories (India) Private Limited (“Operational Creditor” or
“OC”) is engaged in supply of certain diagnostic equipments, eye care
pharma and vision care products. M/s. Vasan Health Care Private Limited
(“Corporate Debtor” or “CD”) entered into various agreements/
memorandum of understanding for purchase of such products. The OC
supplied various products and raised invoices. The products were supplied
to CD without any complaints and were also used by CD. The OC sent
various reminders but no payment was made.
2. An agreement of milestone dated 07.04.2016 was executed between OC
and CD wherein it admitted and acknowledged by latter that a total outstanding
amount of Rs. 94,74,46,921/- is payable to former, which CD undertook to pay
in instalments. However, CD failed to pay even the first instalment.
3. Ultimately, OC sent a statutory notice under section 8 of the Code on
02.01.2017 which was received on 06.01.2017. Neither outstanding
payment nor reply to statutory notice was made by the CD.
4. Finally the OC filed this application.
CD’s contentions
I. Statutory notice is not in accordance with Form-3 and was not sent by OC.
II. Application is not in accordance with Form-5
III. Item supplied by OC are still under ownership of OC and dispute, if any,
can be resolved through conciliation and ultimately by arbitration as per
addendum to agreement of milestone dated 07.04.2016.
IV. A winding up petition is sub judice before Hon’ble High Court of Madras.

A. Objection with regard to statutory notice not being sent directly by OC is
not sustainable for the reason that Form-3 itself provides for signature of
persons authorized to act on behalf of OC.
B. Objection with regard to application not being in Form prescribed, is
untenable as all the information required are contained in the application
filed by OC.
C. The meaning of the word “goods” used in Rule 7(2)(b) of the Insolvency
and Bankruptcy Board of India(Insolvency Resolution Process for Corporate
Persons) Regulations, 2016 is of wider import and includes the machinery/
equipment.
D. Argument that dispute should first be resolved through negotiation and
then through arbitration is untenable since it does not bar an OC to file an
application under section 9 of the Code.
E. Pendency of winding up petition before the Hon’ble Madras High Court
cannot be a bar under the Code for initiating corporate insolvency resolution
process, because Hon’ble High Court has not passed any order for winding
up of CD and no Official Liquidator has been appointed. Also, the CD did
not reply to the notice under section 8 of the Code wherein the pendency
of the dispute could have been brought to notice of OC.
F. Accordingly, the Bench admitted the application and passed following
order:
i. Appointed Shri V Mahesh as an interim resolution professional
Code Directed that supply of essential goods or services to corporate
debtor, as specified, shall not be terminated or suspended or
interrupted during moratorium period.
CHENNAI BENCH 255
BEFORE THE NATIONAL COMPANY LAW TRIBUNAL, DIVISION

BENCH, CHENNAI
Arguments heard on 13.04.2017
Order passed on 21.04.2017
C.A/1/(IB)/2017
(Under Section 9 of the Insolvency And Bankruptcy Code, 2016)
In the matter of
M/s. Alcon Laboratories (India) Private Limited
Applicant Company
Vs.
M/s.Vasan Health Care Private Limited
Respondent Company
(Corporate Debtor)
Applicant Represented by :
Senior Counsel Mr.Vijay Narayanan, Counsels Mr.S.Arjun Suresh & Ms.R.Sinduja
Respondent represented by :
Counsels M/s.S.R.Rajagopal and Rohan Rajasekaran
CORUM
ANANTHA PADMANABHA SWAMY & CH. MOHD SHARIEF TARIQ
MEMBERS (JUDICIAL)
ORDER
CH MOHD SHARIEF TARIQ, MEMBER (JUDICIAL)
1. Under adjudication is an application which came to be filed under Section 9 of

the Insolvency And Bankruptcy Code, 2016 (IBC 2016) and numbered as C.A/1/
(IB)/2017. The application has been filed by M/s. Alcon Laboratories (India) Private
Limited (hereinafter referred to as “Operational Creditor”), having its registered
office at Third floor, Crescent-4, Prestige Shantiniketan, Whitefield. Bengaluru-
560048, against M/s.Vasan Health Care Private Limited (hereinafter referred to
as “Corporate Debtor”) having its registered office at No.70, Dr.Radhakrishnan
Salai, Westminister Complex. Mylapore, Chennai-4.
2. It has been stated in the application that the Operational Creditor is engaged
in supply of certain diagnostic equipments, eye care pharma and vision care
products for which the corporate debtor approached the operational creditor in
the year 2008 for supply of such products for which the operational creditior
and the corporate debtor entered into various agreements/memorandum of
understanding. The operational creditor through its consignment agent M/
s.Parekh Integrated Services Private Ltd (Parekh) supplied various products to
the Corporate debtor on credit basis and invoices were issued periodically on
behalf of the operational creditor. The products supplied by the operational
creditor were received by the Corporate debtor without any demur. The corporate
debtor used the products without any complaints, but had defaulted in payments
towards amount of some of the products supplied, for which the corporate
debtor already received invoices. Thereafter, the operational creditor has given
several reminders to corporate debtor calling upon to pay the outstanding
amount. But the corporate debtor failed to make payment despite having
received serveral reminders for payment which resulted in huge amount of
outstanding payable to the operational creditor by the corporate debtor. The
operational creditor addressed a letter dated 7.12.2015 to the corporate debtor
reminding to make payment of the outsanding sum of Rs.86,65,75,855/-
(Rupees eighty six crores sixty five lakhs seventy five thousand eight hundred
and fifty five only) payable to the operational creditor as on 30.11.2015. The
Corporate debtor vide reply dated 22.12.2015 admitted the outstanding dues as
claimed by the operational creditor in its letter dated 7.12.2015 and assured
that 80% of the outstanding would be paid in the period between 15.1.2016 and
10.2.2016. Subsequently, an agreement of milestone dated 7.4.2016 was
executed between the operational creditor and the corporate debtor wherein it
has been expressely admitted and acknowledged by the latter that a total
outstanding amount of Rs.94,74,46,921/- is payable to the former, which the
corporate debtor undertook to pay in instalments. A hyphothecation agreement
was also entered into between the parties which formed the part of milstone
agreement (available at Annexure P10). As per clause II of milestone agreement,
it was also agreed by the Corporate Debtor that failure to pay any one instalment
would give rise to serious default for which the Corporate debtor would be
liable to pay the entire outstanding amount for all supplies made by the
operational creditor till that date immediately. However, the corporate debtor
failed to pay even the first instalment as per the schedule of payment agreed
between the parties in the milestone agreement. Ultimately, the Operational
creditor sent a statutory notice under Section 8 of IBC 2016 on 2.1.2017 to the
corporate debtor to its office in Chennai, that was received by the Corporate
debtor on 6.1.2017. In the statutory notice, 10 days’ time reckoning from 6.1.2017
to 15.1.2017 was provided for payment of dues. However, the corporate debtor
did neither bother to pay the outstanding amount nor reply to the statutory
notice.
CHENNAI BENCH 257
3. It is on record that the claim was admitted by the corporate debtor and agreed
to make the payment as per schedule which is as follows :
Sl.No Date Amount
1 On or before 31st Aug 2016 30% of the total due
2 On or before 30th Sep 2016 15% of the total due
3 On or before 31st Oct 2016 20% of the total due
4 On or before 30th Nov 2016 15% of the total due
5 On or before 31st Dec 2016 20% of the total due

But the corporate debtor did not adhere to the schedule of payment to be made to
the operational creditor.
4. The matter came up for hearing on 10.4.2017. Both the counsels appearing for
the operational creditor and the corporate debtor sought time to submit their
arguments and the matter has finally been heard on 17.04.2017. The counsel
representing the corporate debtor has raised objections with regard to the
maintainability of the application, inter alia, on the following grounds
I) The statutory notice issued under clause (a) of sub-rule (1) of Rule 5 of the
IBC (Application to Adjudicating Authority) Rules, 2016 under section 8 of
IBC 2016 is not in accordance with Form-3 as provided and was not sent
by Operational creditor itself;
II) The application is not in accordance with Form-5 as provided under Sub-
rule (1) of Rule 6 of the IBC (Application to Adjudicating Authority) Rules,
2016
III) The item supplied by the operational creditor are still under the ownership
of operational creditor as per the Hypothecation Agreement dated 7.4.2016
and dispute if any was to be resolved through consultation and ultimately
by arbitration as per the addendum to agreement of milestone dated
7.4.2016, which was entered into between the parties on 18.4.2016.
IV) That a winding up petition is sub judice before the Hon’ble High Court of
Madras.
5. We take the objections I and II together. In relation to the issue of statutory
notice and the application, we have noted that both of them are in accordance
with the Forms prescribed. The objection of the corporate debtor is that the statutory
notice was to be sent directly by the operational creditor but this objection is not
sustainable for the reason that Form-3 itself provides for the signature of the
persons authorised to act on behalf of the operational creditor. Therefore, the
operational creditor can authorise any person to send the statutory notice on its
behalf. As to the objection raised with regard to the application not being in the
Form prescribed, it is seen that all the information required are contained in the
application filed under section 9 of IBC 2016. Therefore, this objection is also not
sustainable. In this connection, we may make a reference to the ruling given by
the Hon’ ble High Court of Bombay in Pramod Prabhakar Kulkarni Vs Balasaheb
Desai Sahakari Sakhar Karkhana Ltd. and Another reported in (2001) III LLJ 741
(Bom.), wherein similar question came for consideration before their Lordships
and it was opined that though the requirement of making a notice is mandatory
and the ‘Form’ in which it is to be given is a matter of procedure, and hence
directory. It could be expressed in other words that the ‘Forms’ for notice and
application as prescribed under the Rules are for providing/incorporating
necessary informations, which are required under the law. Thus, the substance
is more important than the ‘Form” and moreover there is no irregularity in the
statutory notice sent and the application filed.
The next issue raised is with regard to the hypothecation agreement. In this
regard, it is a normal business practice being followed that unless the entire
payment/consideration is paid by the buyer, the sellers will have lien over the
goods supplied, but that does not mean that the corporate debtor is not under
obligation to make the payment for the supply of the goods to the supplier. The
counsel for the corporate debtor also stated that the “operational creditor” does
not fall within the definition of the ‘operational debt’ as defined under sub-section
21 of Section 5 of IBC 2016. The argument of the counsel for corporate debtor is
misleading because the word “goods” used in the definition is of wider import
and includes the machinery/equipment. Further it is on record that more than half
of the outstanding amount is pertaining to the consumables supplied by the
operational creditor. The objection raised by the counsel for corporate debtor is
not tenable in the eye of law and therefore, stands rejected.
The next objection taken by the counsel for corporate debtor is that the addendum
to milestone agreement provides for resolving the disputes through negotiations,
failing which by arbitration. This does not bar the operational creditor to file the
application under section 9 of IBC 2016 against the corporate debtor as the Code
does not envisage such a kind of bar for initiating the corporate insolvency
resolution process by the operational creditor.
The last objection that has been raised by the counsel for corporate debtor is that
winding up petition is sub judice before the Hon’ble High Court of Madras, where
the Court permitted Andhra Bank to appoint suitable person to conduct forensic
audit of the corporate debtor. The pendency of the winding up petition cannot be
a bar under the Code for initiating the corporate insolvency resolution process,
because the Hon’ble High Court has not passed any order for winding up of the
CHENNAI BENCH 259
corporate debtor and no Official Liquidator has been appointed. Therefore, this
objection is also rejected.
6. It is admitted fact that no reply has been given by the corporate debtor. A
specific query has been raised across the Bench that as to why the reply to the
notice has not been given by the corporate debtor, the counsel for corporate
debtor at the first instance attempted to give some explanation but turned to
admit that the reply to the notice has not intentionally been given. The counsel for
operational creditor also submitted that he has filed an affidavit proposing Shri
V.Mahesh as an interim insolvency professional, who is a registered practitioner
having registration No.IBBI/IPA/002/IP-00215/2016-17/1930. whose consent has
also been sought and his name is available on the web site of the Board and no
prosecution pending against him. It is also an admitted fact that the outstanding
amount payable by the corporate debtor to the operational creditor is not under
‘dispute’.
7. We have perused the contents of the application along with the supporting
documents placed on record the reply tiled by the corporate debtor and
considered the submissions of both of the counsels. After having satisfied that all
the requirements under law have been fulfilled, we hereby allow the application
of the operational creditor and order the commencement of the corporate
insolvency resolution process which ordinarily shall get completed within 180
days, reckoning from the day this order is passed. We also appoint Shri V.Mahesh
as interim insolvency professional who has been proposed by the operational
creditor. He is directed to take charge of the corporate debtor immediately. He is
also directed to cause public announcement as prescribed under Section 15 of
the Code within three days from the date the copy of this order is received, and
call for submissions of claim under section 15 of IBC 2016 in the manner as
prescribed.
8. We declare the moratorium which shall have effect from the date of this order
till the completion of corporate insolvency resolution process, for the purposes
referred to in Section 14 of the IBC 2016. We order to prohibit all of the following,
namely :
(b) Transferring, encumbering, alienating or disposing of by the corporate
by the corporate debtor in respet of its property including any action under

(d) The recovery of any property by an owner or less or where such property
9. However, the supply of essential goods or services to the corporate debtor as
specified shall not be terminated or suspended or interrupted during moratorium
period. It is further made clear that the provisions of sub-section (1) of Section 14
of the Code shall not apply to such transactions as notified by the Central
Government in consultation with any financial sector regulator.
Accordingly, the application of the operational creditor is allowed.
ANANTHA PADMANABHA SWAMY CH MOHD SHARIEF TARIQ,
MEMBERS (JUDICIAL) MEMBERS (JUDICIAL)
HYDERABAD BENCH 261
HYDERABAD BENCH
HYDERABAD BENCH 263
KADEVI INDUSTRIES LIMITED

Name of the Corporate Debtor Kadevi Industries Limited
Name of Financial Creditor/ Indian Bank

Applicant
Company Petition No. CP(IB)/10/7/HDB/ 2017

Bench NCLT, Hyderabad Bench, Hyderabad

1. Kadevi Industries Limited (“Corporate Debtor” or “CD”) was enjoying Rs.
80 crores of fund based and non-fund based limits with Indian Bank
(“Financial Creditor” or “FC”) as sole banker.
2. Since CD wanted to expand its business, it approached banks like State
Bank of Hyderabad, Axis Bank, Corporation Bank to increase financial
facility limits. The above banks formed a Consortium with Indian Bank as
LEAD BANK. Pursuant to formation of Consortium of Banks, financial
assistance was enhanced to Rs. 175 Crores of fund based and non-fund
based.
3. The loan account was classified as “NPA” as on 31.03.2015. FC issued
notice on 05.03.2016 under section 13(2) of SARFAESI Act and symbolic
possession was taken on 11.08.2016 under section 13(4) of SARFAESI Act.
4. FC filed applications before 3 CMM Courts for eviction and taking over
possession of secured assets.
5. OA No. 523/2016 was filed by FC before DRT, Hyderabad on 05.04.2016
for recovery of outstanding dues. Even the CD filed a Securitization
Application against SARFAESI Proceedings.
6. As per the FC, an amount of Rs. 171 crores is in default from the CD as on
26.01.2017, out of which Rs. 124 crores is the balance principal amount
and Rs. 46 crores is the memorandum of interest and the date of default is
from 31.03.2015.

A. During the hearing, the Bench directed the counsel to cure defects
regarding passing of a Board Resolution authorizing appointment of
proposed Insolvency Resolution Professional (“IRP”). However, the counsel
for FC stated that there was no requirement under the Code to pass such
a resolution.
B. Thereafter, the Bench observed that, even though the Bench was of the
prima facie opinion that the case deserves to be rejected, however,
considering the preamble of the Code and the fact that the Bank, which is
an integral part of the economy, the Bench admitted the application.
C. The Bench gave following directions
i. Declared moratorium under section 14 of the Code
ii. Directed to cause public announcement of initiation of Corporate
Insolvency Resolution Process under section 13 of the Code.
iii. Appointed Mr. Gunturu Raghu Babu as an Interim Resolution
Professional Directed IRP to constitute a committee of creditors
HYDERABAD BENCH 265

HYDERABAD BENCH AT HYDERABAD
CP (IB)/10/7/HDB/2017
Date: 15.03.2017
Between
Indian Bank
66, Rajaji Salai, Royapettah
Chennai 600014 Tamil Nadu
Also at, 254- 260, Avvai Shanmugain Salai
Royapettah, Chennai - 600014
Tamil Nadu ... Petitioner
AND
Kadevi Industries Limited
A-A2, Electronic Complex
Kushaiguda, Hyderabad 500062 ... Respondent
Counsel for the Petitioner :
Mr. V.K. Sajith, Mr. G.P. Yash Vardhan, Mr. S.J. Suresh, Mr. Vivvek Naidu
Counsel for the Respondent: None
CORAM : Hon'ble Mr. Ravikumar Duraisamy, Member (Technical) Hon'ble Mr.
Rajeswara Rao Vittanala, Member (Judicial)
ORDER
(As per Ravikumar Duraisamy, Member (T))
1. The Application was filed by the Financial Creditor namely Indian Bank against
Corporate Debtor, i.e. Kadevi Industries Limited. The application was taken up
for hearing on 10.02.2017 and posted on 13.02.2017. Since Counsel for the
Petitioner requested time as his senior counsel is not available, the case was
posted to 14.02.2017. On 14.02.2017 senior counsel sought time to submit
information sought by the Bench by the next date of hearing. Accordingly, he has
submitted his reply on 20.02.2017.
2. The Financial Creditor has stated that an amount of Rs. 171,09,96,659/- is in
default as on 26.01.2017, out of which Rs.124,60,22,645/- is the balance principal
amount and Rs.46,49,74,014/- is memorandum of interest and the date of default
is from 31.03.2015. The Petitioner stated that the above loans were disbursed on
various dates from 6th April 2009 onwards. The Loan account of the Corporate
Debtor has been classified as ‘NPA’ as on 31.03.2015. The Applicant has also
submitted documents in support of loan given to Kadevi Industries Limited.
3. The Corporate debtor was enjoying Rs.80,00,00,000/- of the fund based and
non-fund based limits with the Financial Creditor as a sole banker. As the Corporate
Debtor desired to expand its business by entering to varied sectors of business
verticals, it approached Banks such as SBH (State Bank of Hyderabad), Axis Bank,
Corporation Bank to increase the financial facility limits. Upon deliberations, the
above mentioned Banks have formed a Consortium authorising the Financial
Creditor herein to lead the Consortium as a ‘LEAD BANK’ in order to facilitate
financial assistance to the Corporate Debtor. Pursuant to the formation of
Consortium of Banks, financial assistance to a tune of Rs.135 Crores fund based
and non-fund based was provided to the Corporate Debtor. Further, in the year
2009, the Financial Creditor has enhanced the limits from Rs.135 Crores to 175
Crores of fund based and non-fund based.
4. The petitioner/applicant submitted that subsequent to classifying the account
of the Corporate Debtor as NPA, the Financial creditor got issued notice on
05.03.2016 under section 13(2) of The Securitization and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002 and subsequently Symbolic
possession was taken on 11.08.2016 under section 13(4) of the said Act. CMM
application was also filed and eviction petitions filed in 3 CMM courts of Nampally,
Ranga Reddy and Secunderabad on 27/28/29.08.2016 for eviction. In addition to
the above an Original Application No.523 of 2016 has also been filed before the
Debt Recovery Tribunal, Hyderabad. on 05.04.2016 for the recovery of the
outstanding dues and the same is next posted to 06.03.2017 for filing Written
Statement by the Defendants. SA was filed by the company on 30.11.2016 in DRT,
Hyderabad against our SARFAESI proceedings and the same has been posted to
22.02.2017.
5. Upon perusal of the documents submitted along with the application, the
Bench issued notice to the Financial Creditor, dated 23.02.2017 U/s 7(5) of IBC
2016 to rectify certain deficiencies.
6. The counsel has submitted his reply dated 06.03.2017 and the matter was
again posted for hearing on 07.03.2017. The counsel contended that as per the
provisions of Insolvency and Bankruptcy Code (IBC), 2016/Rules, there is no
requirement to serve a copy of the application to the other party namely Kadevi
Industries Ltd. It is humbly submitted that it is very clear from the rules that
despatching copy of the application is not a condition precedent for filing the
captioned application. However, he submitted proof of service of application sent
by professional courier.
HYDERABAD BENCH 267
7. With regard to the necessary approval of the Board of Directors of Indian Bank
for the proposed appointment of the IRP, he again contended that there is no
requirement specified in the IBC, 2016 that the Bank has to pass a Board Resolution.
It is further submitted that as the Insolvency and Bankruptcy Code, 2016 or the
rules stipulates passing of any board resolution authorising the appointment of
proposed IRP, therefore, no resolution has been passed by the financial creditor.
He further submitted that the counsel for the financial creditor has issued offer
letter to IRP Sh. C.S. Gunturu Raghu Babu and the same was accepted by him. He
also further stated that it is pertinent to mention here that the financial creditor is
well aware of Shri C.S. Gunturu Raghu Babu being proposed as IRP because it
was the decision of the financial creditor to appoint him as IRP. The counsel has
not submitted any document to support this claim that it was the decision of
financial creditor to appoint Sh. Gunturu Raghu Babu as IRP. He referred para- 14
of the Power of Attorney issued to the Assistant General Manager of Indian Bank
dated 23.01.2013. However, that para also do not authorise the AGM of the Bank
to propose the name of IRP.
8. Considering the facts and contentions of the Counsel, though the Bench is of
the prima facie opinion that the case deserves to be rejected, however, the Bench
taken a positive/practical view that the resolution to be passed by the Board of
Directors of the Bank is its internal management/administrative issue. Considering
the preamble of IBC 2016 and also considering Government's initiative i.e., "Ease
of Doing Business", the Bench admits the application filed Under section 7 of IBC
2016 as prayed for in the Application. Further, the financial creditor being a Bank
which is an integral part of the economy, serving the common people, lends
loans to various purposes including priority sector, Corporate Sector.
9. For easy reference we quote/reproduce part of the preamble of IBC 2016. The
objective of the new law is to promote entrepreneurship, availability of credit,
and balance the interests of all stakeholders by consolidating and amending the
laws relating to reorganization and insolvency resolution of corporate persons,
partnership firms and individuals in a time bound manner and for maximization
of value of assets of such persons and matters connected therewith or incidental
thereto. The IBC will give quantum leaf to the functioning of the credit market. The
vision of new law is to encourage entrepreneurship and innovation.
10. We are satisfied that Financial Creditor has to receive Rs. 171,09,96,659,
which is the default amount including the interest as on 26.01.2017.
Therefore, there is a default by the Corporate Debtor namely Kadevi Industries
Limited and we are satisfied that the financial creditor is entitled to claim relief
under Section 7 of the IBC, 2016. We admit the present Company Petition/
Application filed under IBC with following directions:
a. We declare a moratorium by prohibiting the following actions:

1. The institution of suits or continuation of pending suits or proceedings
decree or order in any court of law, Tribunal, arbitration panel or
other authority;
2. Transferring, encumbering, alienating or disposing of by the
corporate debtor any of its assets or any legal right or beneficial
interest therein;
3. Any action to foreclose, recover or enforce any security interest
assets and Enforcement of security Interest Act, 2002;
4. The recovery of any property by an owner or lessor where such
property is occupied by or in possession of the corporate debtor.
5. The supply of essential goods or services to the Corporate Debtor, if
continuing, shall not be terminated or suspended or interrupted
during moratorium period.
b. Direct to cause the public announcement of initiation of Corporate
Insolvency Resolution Process of the Company as per the details given in
sections 15(1) and 15(2), on www.ibbi.gov.in (designated website of
Insolvency and Bankruptcy Board of India, circulated vide IIBI/IP/PUBLIC
ANN./221 dated 01.02.2017) in addition to other accepted modes of
publication, immediately and call for submission of claims as per Section
15 of the IBC, 2016 read with Regulation 6 of the Insolvency and Bankruptcy
Board of India (Insolvency Resolution Process for Corporate Persons)
Regulations, 2016.
c. We appoint Mr. Gunturu Raghu Babu (Regn No IBBI/IPA/02/2016-17/34/
2016-17/1048, dt. 19.12.2016) as an Interim Resolution Professional.
d. Direct the personnel of Kadevi Industries Limited, to assist and cooperate
with Interim Resolution Professional to provide access to documents and
records and management of the affairs of the company.
e. We direct the Interim Resolution Professional, to constitute a committee of
creditors, after collation of all claims received against the corporate debtor
and determination of financial position of corporate debtor, as per Section
21 of IBC. The first meeting of the committee of creditors, shall be held
within 7 days of the constitution of committee of creditors and their decision
has to be communicated to the Tribunal as per Section 22 of IBC, 2016.
HYDERABAD BENCH 269
f. We direct the Interim Resolution Professional to follow all the applicable

provisions of the Insolvency and Bankruptcy Code, 2016 and Insolvency
and Bankruptcy Board of India (Insolvency Resolution Process for Corporate
Persons) Regulations, 2016.
g. Post the case to 17.04.2017.
Sd/- Sd/-
RAVIKUMAR DURAISAMY RAJESWARA RAO VITTANALA
MEMBER (Technical) MEMBER (Judicial)
BLOSSOMS OILS & FATS LIMITED

Name of the Corporate Debtor Blossoms Oils & Fats Ltd.
Company Petition No. CP No. 23/10/HDB/2017



1. Blossoms Oils & Fats Limited (“Corporate Debtor” or “CD”) was incorporated
on 20.08.1998, having authorised capital of Rs. 4900 lakhs and paid up
share capital of Rs. 4513 lakhs.Its main object is to extract, manufacture,
process, trade and/or refine edible and non-edible oils of all varieties,
including that of castor seeds and derivatives karanji seed palm and palm
oil derivatives, etc.
2. The total outstanding amount with respect to secured creditors is Rs.
285.56 Crores and with respect to unsecured creditors is Rs. 32.72 Crores
thereby the aggregate value outstanding at Rs. 318.28 Crores to Indian
Overseas Bank and Indian Bank (“Financial Creditors” or “FCs”).
3. The learned counsel of the CD had submitted that the Company is regular
in payment of all statutory dues except Sales Tax demand of Rs. 1.38
Crores issued by the Commercial Tax Department, Government of Andhra
Pradesh dated 11.08.2016. He further submitted that a copy of the
application had been sent to the FCs by way of Speed Post dated
27.02.2017
4. Indian Overseas Bank had issued possession notice dated 09.03.2016 to
the CD directing it to pay the dues under the SARFAESI Act, 2002 and had
also issued a demand notice dated 21.12.2015 as per Section 13(2) r/w
Rule 3 of Security Interest (Enforcement) Rules, 2002 calling upon the CD
and mortgagors and guarantors of CD to repay Rs. 269.66 Crores which
was also published in the newspaper on 02.01.2016. The Bank had also
filed an application before DRT, Hyderabad and it had directed the CD to
appear for hearing on 13.05.2016.
5. Indian Bank had also issued demand notice dated 15.03.2016 to the CD
HYDERABAD BENCH 271
under Section 13(2) of the SARFAESI Act, 2002wherein it was stated that
the loan account has been classified as Non-Performing Asset since
30.09.2015 in accordance with the directions relating to asset classification
issued by Reserve Bank of India. The outstanding amount as on 29.02.2016
stood at Rs. 42.88 Crores which carried further interest at the agreed rate
from 01.03.2016 till date of repayment.
6. The CD had also become sick and filed a reference on 07.07.2014 with
the BIFR under Section 15(1) of the Sick Industrial Companies (Special
Provisions) Act, 1985. The proceedings before BIFR has been summarised
hereunder:
• On 29.10.2014, the Learned Chairman of BIFR noted that the CD’s net
worth had been fully eroded due to accumulated losses which
stood at Rs. 4768.20 Lakhs.
• On 03.12.2014, the learned counsel of the CD had filed an MA
requesting the Board to direct Indian Overseas Bank not to deduct
any amount from its cash credit A/c No. 1458 and not to take any
coercive measures.
• On 24.11.2016, the Board took up the MA No. 256/2016. The counsel
of the CD stated that they had filed an MA requesting the Board to
issue direction for suspension of instruments for a period of seven
years and also requested the Board to direct AP Cooperative Oil
Seeds Growers Federation Limited not to take any coercive measures
and to accept the payment in due course as per the scheme to be
sanctioned. No representative from AP Cooperative Oil Seeds
Growers Federation Limited was present in the hearing and case
was adjourned to 01.02.2017.
7. The BIFR was dissolved from 01.12.2016 and the CD filed a fresh reference
before this Tribunal.
8. The CD had proposed the name of Mr. Arun Kumar Malani as interim
resolution professional, who gave necessary declarations under the Code.

A. The Bench, on perusal of the petition and supporting documents, issued
the following directions:
i. Admitted the case under IBC.
ii. Declared a Moratorium as contemplated under the Code.
iii. Appointed CA Hashmukh Bhavanji Dedhia as an Interim Resolution
Professional and directed him to follow all the applicable provisions

under IBC.
iv. Directed the Interim Resolution Professional to cause a public
announcement of the corporate insolvency resolution process
immediately as per the provisions of Section 15 of the Code r/w
Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency
v. Directed the promoters and persons associated with management
of the CD to assist and cooperate with the Interim Resolution
Professional. Directed the Interim Resolution Professional to
constitute the committee of creditors as per Section 21 of the Code
and that the first meeting must be held within seven days of the
constitution of the committee of creditors, the decision of which
must be communicated to the Bench.
HYDERABAD BENCH 273

CP(IB) No. 23/10/HDB/2017
Date: 22.03.2017
Between:
Blossoms Oils & Fats Ltd.
6-3-609/147/A, Anand Nagar Colony, Khairatabad,
Hyderabad 500004 .... Petitioner
AND
Indian Overseas Bank
Hyderabad Main Branch, Bank Street, Hyderabad
2. Indian Bank
Hyderabad Main Branch, Bank Street
Hyderabad ...Respondent
Counsel for the Petitioner : Sh.Rajesh Bohra
Counsel for the Respondents : None
CORAM : Hon'ble Mr. Ravikumar Duraisamy, Member (Technical)

Hon'ble Mr. Rajeswara Rao Vittanala, Member (Judicial)
ORDER
1. The present Company Petition, CP(IB) No.23/10/HDB/2017, has been filed by

Blossoms Oils & Fats Ltd (hereinafter referred as the BOFL/Company) under Section
10 of the Insolvency and Bankruptcy Code, 2016 (IBC) read with Rule 7 of the
Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, by
seeking to initiate Corporate Insolvency Resolution Process (CIRP) in respect of
Blossoms Oils & Fats Limited.
2. The case was listed before the Bench on 13.03.2017 and on 15.03.2017, the
case was reserved for orders.
3. Sh. Rajesh Bohra, Learned Counsel for the Petitioner, while reiterating the
contents raised in Form No.6, submits that Blossoms Oils and Fats Ltd. was
incorporated on 20.8.1998 and the present CIN is U15143TG1998PLC029987.
The nominal share capital is Rs.4900.00 lakhs and the Paid-up Share Capital is
Rs.4513.00 lakhs. The main objects of the Company is to extract, manufacture,
process, trade and/or refine edible and non-edible oils of all varieties, including
that of castor seeds and derivatives karanji seed palm and palm oil derivatives,
etc.
4. The total outstanding (amount in default) excluding the principal not due as on
31.01.2016 with respect to the Secured Creditors is Rs.285.56 Crores and total
outstanding (amount in default) excluding the payments released with respect to
the Unsecured Creditors is Rs.32.72 crores. Therefore, the total debts raised and
amounts in default by the Company is Rs.318.28 Crores towards Indian Overseas
Bank and Indian Bank.
5. The Learned Counsel submits that the Company is regular in payment of all
statutory dues except Sales Tax Demand of Rs. 1.38 Crores issued by Commercial
Tax Department, Government of Andhra Pradesh dated 11.08.2016.
6. The Learned Counsel submits that he has sent the Petition copy to the
Respondents by way of Speed Post dated 27.02.2017 and the postal receipts are
enclosed as Annexure 17 along with the Petition.
7. Upon perusal of documents and case records, it is noted that Indian Overseas
Bank issued possession notice dated 09.03.2016 to the Company, directing to
pay the dues under the Securitization and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (SARFAESI) and in exercise of powers
conferred u/s 13(2) r/w Rule 3 of Security Interest (Enforcement) Rules, 2002,
issued a demand notice dated 21.12.2015 calling upon the borrower and
mortgagers and guarantors of the Company to repay Rs.269.66 crores and the
same was published in the newspaper on 02.01.2016. Indian Bank issued demand
notice dated 15.03.2016 to the Company u/s 13(2) of SARFAESI, whereby it is
stated that the loan account has been classified as Non-Performing Asset since
30.09.2015 in accordance with directions/guidelines relating to asset
classifications issued by Reserve Bank of India. The outstanding dues payable as
on 29.02.2016 amounts to Rs.42.88 crores which carries further interest at the
agreed rate from 01.03.2016 till date of repayment.
8. Indian Overseas Bank has filed an Application before DRT, Hyderabad dated
08.03.2016 and accordingly, DRT has directed the Company to appear for hearing
on 13.05.2016.
9. The Learned Counsel submits that the Company became sick, and filed a
Reference on 07.07.2014 in BIFR under Section 15(1) of the Sick Industrial
Companies (Special Provisions) Act, 1985 and the aforesaid reference has been
registered as Case No. 40/2014. As per summary records proceedings of hearing
held on 29.10.2014, the Learned Chairman of BIFR, noted that the Company's Net
Worth has been fully eroded due to accumulated losses, which stood at 4768.20
HYDERABAD BENCH 275
lacs. The next date of hearing was on 03.12.2014, wherein, the learned counsel
for the Company stated that they have filed an MA requesting the Board to direct
the Indian Overseas Bank not to deduct any amount from cash credit A/c No.
1458 of the Company and not to take any coercive measures/recovery measures.
The Learned Counsel also requested to direct the Indian Overseas Bank to maintain
status quo against the Company towards their outstanding dues until the scheme
is sanctioned. Subsequently, during the hearing held on 24.11.2016, the Bench
took up the MA No. 256/2016. The learned counsel for the Company stated that
they have filed an MA requesting the Board to issue direction for suspension of
instruments for a period of seven years and also requested the Board to direct AP
Cooperative Oil Seeds Growers Federation Limited to not to take any coercive
measures of recovery and to accept the payment in due course as per scheme to
be sanctioned. The Bench observed that no representative from AP Cooperative
Oil Seeds Growers Federation Ltd was present in the hearing and adjourned it to
01.02.2017.
Learned Counsel, further submits that the summary proceedings passed on
24.11.2016, was last and not listed thereafter, as the BIFR was dissolved with the
effect from 1st December, 2016.
Accordingly, he approached this Tribunal in prescribed format, duly complying
the procedure mentioned in the said provisions.
11. We have considered the entire material and heard the submissions of the
Learned Counsel for the Petitioner. We are of the considered view that the
Company is in default of Rs. 318.28 crores and requires adjudication by the
Tribunal under the above Section.
12. The Learned Counsel further submits that an offer letter dated 6th February,
2017 was issued by the Company to appoint Mr. Arun Kumar Malani as the
Interim Resolution Professional (IRP). Mr. Arun Kumar Malani has accepted the
offer and filed Form No.2 to NCLT dated 27.02.2017.
13. We have perused the offer and acceptance and also the Certificate of
Registration of Mr. Arun Kumar Malani, wherein, he has agreed to accept the
appointment as the IRP, if an order admitting the present application is passed
and that he is currently serving as an IRP for VNR Infra Metals Private Limited. He
further certifies that he is eligible to be appointed as IRP and there are no disciplinary
proceedings pending against him with the Board or Indian Institute of
Insolvency Professionals of ICAI.
14. We find that Mr. Arun Kumar Malani is eligible to be appointed as IRP for the
Petitioner Company for initiating the CIRP in respect of BOFL.
15. By invoking the powers under Sections 10, 12, 13, 14, 15,16, 17, 18, 19, 20, 21,22
and 25 and other applicable provisions of the IBC, 2016, we, hereby, pass the
following Orders:
a. We admit the present Company Petition/Application filed under IBC.
b. We declare a moratorium by prohibiting the following actions:
other authority;
interest therein;
c. We appoint Mr. Arun Kumar Malani (Regn No: IBBI/IPA-001/IP-00040/
2016-2017/1724 dated 23.01.2017) as an Interim Resolution Professional.
d. Direct to cause the public announcement of initiation of CIRP of the
Company as per the details given in sections 15(1) and 15(2), on
www.ibbi.gov.in (designated website of Insolvency and Bankruptcy Board
Of India, circulated vide IIBI/IP/PUBLIC ANN./221 dated 01.02.2017) in
addition to other accepted modes of publication, immediately and call for
submission of claims as per Section 15 of the IBC read with Regulation
6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution
Process forCorporate Persons) Regulations, 2016. The Company is also
directed to publish the same in their official Company website.
e. Direct the personnel of Blossoms Oils and Fats Ltd, its promoters or any
other person associated with the management of BOFL to assist and
cooperate with Interim Resolution Professional to provide access to
documents and records and management of the affairs of the company.
HYDERABAD BENCH 277
f. We direct the Interim Resolution Professional, to constitute a committee

of creditors, after collation of all claims received against the corporate
debtor and determination of financial position of corporate debtor, as per
Section 21 of IBC. The first meeting of the committee of creditors, shall be
held within 7 days of the constitution of committee of creditors and their
decision has to be communicated to the Tribunal as per Section 22 of IBC.
g. We direct the Interim Resolution Professional to follow all the applicable
h. Post the case to 24.04.2017.
Sd/- Sd/-
MEMBER (T) MEMBER (J)
VNR INFRA METALS PVT. LTD.

Name of the Corporate Debtor VNR Infra Metals Private Limited
Company Petition No. 13/10/HDB/2017

Bench NCLT, Hyderabad Bench

Amount Involved Rs. 88.33 Crores

1. VNR Infra Metals Private Limited (“Corporate Debtor” or “CD”) was originally
incorporated as VNR Logistics Private Limited and subsequently changed
to its current name in the year 2014.Its main objects is to carry on the
business as traders, agents, distributors in all major metals, minerals,
infrastructure developers, contractors, etc. Its nominal share capital is Rs.
4000 lakhs and paid up capital is Rs. 3724.27 lakhs.
2. The defaulted dues of the CD towards its Financial Creditors or FCs stood
at around Rs. 88.33 crores, which included principal and interest
outstanding.
3. The FCs had initiated recovery process against the CD and served notices
under Section 13(4) of SARFAESI Act, 2002 on 22.09.2016 and subsequently
the CD had filed a petition before the Hon’ble Debt Recovery Tribunal,
Hyderabad challenging the action taken by FCs which is still pending.
4. The CD had proposed to appoint Mr. Arun Kumar Malani as an Interim
Resolution Professional, subject to the appointment by NCLT, Hyderabad
and all necessary declarations were given by him.

A. The Bench, after considering the entire material and hearing the
arguments, noted that the CD is in default of loans/debt borrowed from
the bank and therefore, required adjudication of the Tribunal.
B. The Bench admitted the application and passed the following orders:
i. Declared moratorium in terms of section 14 of the Code.
ii. Directed to cause public announcement of initiation of CIRP in terms
of Section 15(1) & (2) of the Code.
HYDERABAD BENCH 279
iii. Appointed Mr. Arun Kumar Malani as an Interim Resolution

Professional (IRP).
iv. Directed the personnel of CD to assist and cooperate with the Interim
Resolution Professional to provide access to documents and records
and management of the affairs of the CD.
v. Directed the IRP to constitute the committee of creditors, after collation
of all claims received against the CD and determination of financial
position of CD, as per Section 21 of the Code. Directed the IRP to
follow all the applicable provisions of the Code.
BEFORE THE NATIONAL COMPANY LAW TRIBUNAL HYDERABAD

BENCH AT HYDERABAD
CP(IB) No. 13/10/HDB/2017
Date: 03.03.2017
In the matter of:
VNR Infra Metals Private Limited
#8-2-310/17, Road No.14,
Banjara Hills, Hyderabad-500034, Telangana .... Petitioner
Counsel for the Petitioner: Sh. Rajesh Bohra
CORAM : Hon’ble Mr. Rajeswara Rao Vittanala, Member (Judicial)
Hon’ble Mr. Ravikumar Duraisamy, Member (Technical)
Order
1. The present Company Petition, CP(IB) No.l3/10/HDB/2017, has been filed by

VNR Infra Metals Private Limited (hereinafter referred as the Company) under
Section 10 of the Insolvency and Bankruptcy Code, 2016 (IBC) read with Rule 7 of
the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016,
by seeking to initiate Corporate Insolvency Resolution Process (CIRP) in respect of
VNR Infra Metals Private Limited.
contents raised in Form No.6, further submits that VNR Infra Metals Private Limited,
which was originally incorporated as VNR Logistics Private Limited and
subsequently changed to its current name in the year 2014 and the present CIN
is U63090TG2009PTC065104. The main objects of the Company is to carry on
the business as traders, agents, distributors in all major metals, minerals,
infrastructure developers, contractors, etc. The Nominal Share Capital of the
Company is Rs.4000 lacs and the Paid up capital is Rs. 3724.27 lacs.
3. The Learned Counsel submits that the defaulted dues of corporate debtor to
the financial creditors as on the date of filing of the present petition/application
was about Rs.88.33 crores, which includes principle * and interest outstanding.
Further, he submits that the Financial creditors have initiated the recovery process
against the Corporate Debtor and served notices under Section 13(4) of SARFAESI
Act, 2002 on 22.09.2016 and subsequently, the Corporate Debtor has filed a Petition
before the Hon’ble Debt Recovery Tribunal, Hyderabad challenging the action taken
by financial creditors and the case is still pending before DRT, Hyderabad.
HYDERABAD BENCH 281
Accordingly, he approached this Tribunal in prescribed format, duly complying

the procedure mentioned in the said provisions.
4. We have considered the entire material and heard the arguments of the
Learned Counsel for the Petitioner. We are of the considered view that the
Company is in default of loans/debt borrowed from the bank and therefore,
required adjudication of the Tribunal under the above Section.
5. The Learned Counsel further submits that the Board of Directors of the Company,
in its Board meeting dated 17th February, 2017, has proposed to appoint Mr. Arun
Kumar Malani as the Interim Resolution Professional, subject to the appointment
by NCLT, Hyderabad. Accordingly, an offer letter dated 17.02.2017 was issued by
the Company. Mr. Arun Kumar Malani has accepted the offer and filed Form No.2
to NCLT dated 17.02.2017.
6. We have perused the offer and acceptance and also the Certificate of
Registration of Mr. Arun Kumar Malani, wherein, he has agreed to accept the
appointment as the Interim Resolution Professional, if an order admitting the
present application is passed and that he is currently not serving as an Interim
Resolution Professional/resolution professional/liquidator in any proceedings.
He further certifies that he is eligible to be appointed as IRP and there are no
disciplinary proceedings pending against him with the Board or Indian Institute of
Insolvency Professionals of ICAI.
7. We find that Mr. Arun Kumar Malani is eligible to be appointed as Interim
Resolution Professional for the Petitioner Company for initiating the CIRP in respect
of VNR Infra Metals Private Limited.
and 25 and other applicable provisions of the IBC, 2016, we, hereby, pass the
following Orders:
a. We admit the present Company Petition/Application filed under IBC.
b. We declare a moratorium by prohibiting the following actions:
other authority;
2. Transferring, encumbering, alienating or disposing of by the corporate

c. Direct to cause the public announcement of initiation of CIRP of the
Company as per the details given in sections 15(1) and 15(2), on
www.ibbi.gov.in (designated website of Insolvency and Bankruptcy Board
Of India, circulated vide IIBI/IP/PUBLIC ANN./221 dated 01.02.2017) in
addition to other accepted modes of publication, immediately and call for
submission of claims as per Section 15 of the IBC read with Regulation 6 of
the Insolvency and Bankruptcy Board of India (Insolvency Resolution
Process for Corporate Persons) Regulations, 2016.
d. We appoint Mr. Arun Kumar Malani (Regn No: IBBI/IPA-001 /IP- 00040/20
16-2017/1724 dated 23.01.2017) as an Interim Resolution Professional.
e. Direct the personnel of VNR Infra Metals Private Limited, to assist and
cooperate with Interim Resolution Professional to provide access to
documents and records and management of the affairs of the company.
f. We direct the Interim Resolution Professional, to constitute a committee of
and determination of financial position of , corporate debtor, as per Section
21 of IBC. The first meeting of the committee of creditors, shall be held
within 7 days of the constitution of committee of creditors and their decision
has to be communicated to the Tribunal as per Section 22 of IBC.
g. We direct the Interim Resolution Professional to follow all the applicable
h. Post the case to 04.04.2017.
Sd/- Sd/-
MEMBER (T) MEMBER (J)
HYDERABAD BENCH 283
KAMINENI STEEL & POWER INDIA PVT.LTD.

Name of the Corporate Debtor/ M/s Kamineni Steel & Power India Ltd.
Applicant
Company Petition No. CP(IB) No. 11/10HDB/2017

Amount Involved 1405.01 crores

1. Kamineni Steel and Power India Pvt. Ltd. (“Corporate Debtor” or “CD”) filed
a petition under Section 10 of the Code for initiation of Corporate Insolvency
Resolution Process.
2. CD was incorporated on 20.10.2008 having principal business activity of
manufacture of steel billets and wholesaler of metal scraps etc.
3. CD availed term loans, fully pertaining to its steel projects and about 45%
of sanctioned loans, relating to power project. The steel plant commenced
its operations in March, 2013 due to non availability of full power
requirements against scheduled Commercial Operation Date (“COD”) of
October 2012. The implementation of power plant was delayed due to
lack of clarity of availability of gas. Due to the above delay, there was cash
flow mismatch and the CD could not meet the repayment schedule for FY
2014-15.
4. In August, 2014, term loan facilities were restructured with sanction of
additional term loan of Rs. 74.80 crores by consortium banks and the COD
of power plant was shifted from July, 2015 to July, 2017
5. In FY 2014-15, CD incurred net loss of Rs. 77 crores and in FY 2015-16, the
losses were of Rs. 275 crores. Consequently, the total accumulated loss
reached to Rs. 355 crores.
6. Even though, a detailed Techno-Economic Viability (“TEV”) study of “Steel
Division” was conducted in August, 2015, yet, the vetted TEV study was not
implemented by consortium of bankers within time frame.
7. The CD stated that default is still continuing and a resolution plan for
restructuring of debts is required.
8. The total amount of dues outstanding to various financial creditors named

in the petition is to the tune of Rs. 1405.01 crores.

A. The Bench noted that the CD was already referred to BIFR. The details of
financial creditors and the amount due to them was tabulated at Rs. 1405.01
crores. Further, the CD had given dates of NPA as per the bank records of
FCs in question.
B. The perusal of the documents indicated that the CD had committed default
and the net worth of the CD had drastically eroded.
C. The Bench passed following order:
i. Admitted the application
ii. Appointed Mr. Ch. Bala Mouli as Interim Resolution Professional.
iii. Declared moratorium under section 14 of the Code
iv. Directed causation of public announcement under section 13 of the
Code
Subsequent Development
After the passing of the above order dated 10.02.2017 by the Bench and issuance
of moratorium, one of the Financial Creditor i.e. Indian Bank filed an application
under section 7 of the Code against the CD. However, in view of the admission of
the application filed by CD under section 10 of the Code, the application filed by
Indian Bank was dismissed vide order dated 20.02.2017.
HYDERABAD BENCH 285

CP(IB) No. 11/10/HDB/2017
Date: 10.02.2017
In the matter of:
Kamineni Steel & Power India Pvt Ltd.
"KAMINENI", 4th Floor, King Koti.
Hyderabad .... Petitioner
Counsel for the Petitioner: Sh. GSN Murthy
CORAM :
ORDER
(As per Rajeswara Rao Vittanala, Member (J))
1. The present Company Petition bearing number l l/10/HDB/2017, has been filed
by Kamineni Steel and Power India Pvt Ltd (hereinafter referred as the Company),
represented by Mr. K. Sashidhar, under Section 10 of the Insolvency and Bankruptcy
Code, 2016 read with Rule 7 of the Insolvency and Bankruptcy (Application to
Adjudicating Authority) Rules, 2016, by inter alia seeking to initiate Corporate
Insolvency Resolution Process in respect of the Company.
2. Sh. GSN Murthy, Learned Counsel for the Petitioner, while reiterating the contents
raised in Form No.6, further submits that Kamineni Steel and Power India Private
Limited, was incorporated on 20.10.2008 and CIN changed upon formation of
Telangana State in date base of MCA vide mail dated 12.06.2014 vide new CIN
U27100TG2008PTC061482, and the principal business activities of the Company
include manufacture of steel billets and wholesale of metal scraps, etc. The
Nominal Share Capital of the Company is Rs.25000 lakhs divided into 25,00,00,000
equity shares of Rs.10 each and the Paid up share capital is Rs.2276.213 lakhs
divided into 227,621,300 equity shares of Rs. 10/- each fully paidup.
3. The Learned Counsel submits that the Company, upon erosion of entire net
worth due to accumulated losses, in accordance with provisions of Section 15(l)
of SICA has filed a reference with BIFR on 17.11.2016 vide acknowledgement no.
9913(H), dated 17.11.2016 and as such the reference was pending with BIFR.
4. The Learned Counsel, further submits that in terms of notification dated 25th
November, 2016 as to repeal of SICA Repeal Act, 2003, all references made to
BIFR or all proceedings or appeals of whatever nature pending before BIFRI/
AAIFR got abated with effect from 1St December, 2016. Accordingly, the reference
made by Company to BIFR on 17.11.2016 got abated.
Accordingly, the Petitioner approached this Tribunal in prescribed format, duly
complying the procedure mentioned in the said provisions and also paid the
prescribed fee of Rs.25,000/-.
5. The Learned Counsel for the Petitioner submits that, the Company was installed
with a capacity of 360,000 MTPA and a captive gas based power plant of 220MW
near Narketpally Mandal, Nalgonda district, Telangana. The Original project was
estimated as Rs. 1539 crores, which had been funded by terms loan of Rs.1248
crores by 8 consortium banks with Indian Bank as Leaders and balance to be met
by promoters by way of equity to the tune of Rs. 291 crores. The total debt comprised
of senior debt of Rs. 1151 crores and sub debt of Rs. 97 crores. The consortium
banks include Andhra bank, Allahabad bank, Bank of Maharashtra, Central bank
of India, Indian Bank, Indian Overseas Bank, the Karur Vysya Bank and Oriental
Bank of Commerce with Indian bank as Leader.
The Company availed the term loans, fully pertaining to steel projects and about
45 % of sanctioned loans, relating to power project. The steel plant commenced
one of the operations on March 30, 2013, due to non-availability of full power
requirements against scheduled COD on October, 2012. The implementation of
power plant was delayed due to lack of clarity of availability of gas. Due to the
delay in commencement of operation of steel plant resulted in cash flow mismatch,
the company could not meet he repayment schedule from FY 2014-15 as per
original repayment schedule in original loan agreement. In the above
circumstances, the term loan facilities were restructured in Aug, 2014 along with
sanction of additional term loan of 74.80 crores by consortium banks to meet
expenses towards IDC. The COD of power plant was shifted from July, 2015 to
July, 2017. The lenders of the Company were also informed in September, 2015
that the power project has deferred indefinitely due to the ambiguity on the
availability of natural gas.
6. In FY 2014-15, the Company manufactured about 60632 MT of Billets with a
capacity utilization of 17% and achieved net sales of about Rs.196 crores. During
same FY, the company incurred net loss of Rs.77 crores from operations. During
FY 2015-16, the Company achieved a net turnover of Rs. 63 crores and incurred
an operational loss of Rs. 275 crores after meeting interest and depreciation.
Consequently, the total accumulated loss reached to Rs. 355 crores as on
31.03.2016 making the net worth negative at Rs. 127 crores. The major reasons
for such accumulated operational losses, interalia include:
a. Delay in getting power connection from the Government for more than
one year from 2013 to 2014;
HYDERABAD BENCH 287
b. Full scale of operations could not be achieved as scheduled, due to delay

in power supply from TSSPDCL;
c. Bearish crude oil prices softened demand for seamless pipes used in oil
and gas industry which affected its major customer USTPL;
d. Decline in steel prices due to (i) structural slowdown in all large steel
consuming countries; (ii) Overcapacity & aggressive dumping by
neighbouring countries;
e. Lower realization and stiff competition resulting in significant erosion of
margin for small and medium players;
f. Cash losses due to substantial erosion of margin.
g. Allowing import of Steel Billets from China and other countries at cheaper
prices;
h. Lack of timely support of working capital from bankers;
i. Non implementation of 5/25 scheme as per RBI guidelines by all
consortium lenders in true letter and spirit even though the TEV study had
been completed and vetted by IEC of expert constituted by IBA/RBI.
The above factors resulted in mismatch of cash flows and resultant financial
crisis leading to heavy operational losses and consequent erosion of entire
networth.
7. At the instance of consortium Bankers, detailed techno economic viability
study of "Steel Division" has been conducted by Atlas Financial Research &
Consulting Pvt Ltd. Hyderabad during August, 2015 and they concluded that the
project can be made technically feasible and economically viable subject to
implementation of Flexi-structuring scheme by consortium banks and infusion of
additional funds as per RBI guidelines. The TEV study had been vetted by IEC
constituted by IBA/RBI. Based on the vetted scheme, the proposal submitted by
Company has not been implemented by consortium bankers within the time
frame. Out of 8 consortium bankers, 4 bankers have implemented the scheme
and 4 are yet to implement the scheme. In accordance with detailed discussions
in Consortium Meetings, the Company explored the possibilities for long term
revival and accordingly, is working out various options for restructuring and revival
proposals covering conversion of non-sustainable debt into CCD/Equity with
moratorium period, rephasement of existing outstanding with moratorium period,
infusion of additional funds by Promoters/ Strategic investor, reduction of rate of
interest, etc and the detailed proposal.
8. The Learned Counsel further submits that default is still continuing and it
required institution of Corporate Insolvency Resolution Process in respect of the

Petitioner Company, by this Tribunal. The Board of Directors at their meeting held
on 31.01.2017, authorized Sh. K. Sashidhar, Managing Director of the Company to
file necessary application under the provisions of Insolvency and Bankruptcy
Code, 2016 on behalf of the Company to initiate Corporate Insolvency Resolution
Process. Accordingly, the present Company Petition is filed before this Tribunal
under Section 10 of IBC, 2016 read with Rule 7 of the Insolvency and Bankruptcy
(Application to Adjudicating Authority) Rules, 2016, requesting for implementation
of Resolution plan by the lenders, which includes, re-phasement and restructuring
of the debt which will result in the improvement of operations and serviceability
of debt obligations.
The details of the financial creditors as on 3 1.01.2017 are detailed in Annexures
5 and 5A, which are here under:
Name of Financial Address of Details of debt raised and
Creditor Correspondence amount of default (Rs. In
crores)
Type of Debt Amount

facility O/s of
Default
Indian Bank Surabhi Arcade, Bank Loans 297.76 297.76

Street, Koti,
Hyderabad - 500001
Oriental Bank of Plot No. 1271, Road No.63, Loans 164.11 164.11
Commerce Jubilee Hills, Hyderabad -
500033
KVB/JM Financial KVB: Himayat Nagr Branch, Loans 166.41 166.41

Asset Reconstruction Hyderabad - 500029.
Company Pvt Ltd JM FARCPL: 3rd Floor, B
(from 28.03.2016 Wings, Suashish IT Part, Plot
onwards) No.68E, Off. Dattapada
Road, Opp. Tata Steel,
Borivali (East),
Mumbai - 400066
Allahabad Bank 3-6-435, Ground Floor, Loans 111.87 111.87

Main Road, Himayatnagar,
Hyderabad - 500029
HYDERABAD BENCH 289
Indian Overseas Large Corporate Branch, Loans 226.30 226.30

Rank Jubilee Hills Check Post,
Hyderabad
Central Bank of Bank street Branch, Koti, Loans 158.36 158.36

India Hyderabad
Andhra Bank Specialised Corporate Loans 193.29 193.29

Finance Branch, 3 rd Floor,
6-3-648, Padmaja
Landmark, Adj to RTA
office, Somajiguda,
Hyderabad - 500082
Bank of ECIL Road, Kapra Branch, Loans 86.91 86.91

Maharashtra Hyderabd
Total 1405.01 1405.01

Name of Financial Address of Details of debt raised and
Creditor Correspondence amount of default (Rs. In
crores)
Type of Debt NPA
facility O/s Date
as per Bank
records
Indian Bank Surabhi Arcade, Bank Loans 297.76 01.Nov. 14
Street, Koti,
Hyderabad - 500001
Oriental Bank of Plot No. 1271, Road No.63, Loans 164.11 30.Sep.16
Commerce Jubilee Hills,
Hyderabad - 500033
KVB/JM Financial KVB: Himayat Nagr Loans 166.41 23. Mar. 16

Asset Branch, Hyderabad -
Reconstruction 500029. JM FARCPL:
Company Pvt Ltd 3 rd Floor, B Wings,
(from 28.03.2016 Suashish IT Part,
onwards) Plot N0.68E, Off.
Dattapada Road,
Opp. Tata Steel,
Borivali (East),
Mumbai - 400066
Allahabad Bank 3-6-435, Ground Floor, Loans 111.87 01.Oct. 14

Main Road,
Himayatnagar,
Hyderabad - 500029
Indian Overseas Large Corporate Branch, Loans 226.30 01.Jan.16

Bank of Jubilee Hills Check Post,
Hyderabad
Central Bank of Bank street Branch, Koti, Loans 158.36 31.Dec, 15

India Hyderabad
Andhra Bank Specialised Corporate Loans 193.29 30.Jun.16

Finance Branch, 3rd
Floor, 6-3-648,
Padmaja Landmark,
Adj to RTA office,
Somajiguda,
Hyderabad - 500082
Bank of ECIL Road, Kapra Branch, Loans 86.91 01.Sep.15

Maharashtra Hyderabad
Total 1405.01
9. I have considered the entire material, and heard the arguments of the Sh.G.S.N.
Murthy, Learned Counsel for the Petitioner.
10. The issue raised in the present Company Petition was already referred before
the BIFR as stated above. The details of financial creditors as mentioned above
(Annexure 5 and 5A) indicates that the total outstanding debt of all financial
creditors is Rs.1405.01 crores and the same figure was shown as default. The
Annexure 5A, as mentioned above, has also furnished the dates of NPA as per
the bank records of financial creditors in question, from 1st November, 2014 to
30th September, 2016 in respect of those banks. The details of copies of various
documents about the existence of debt and the amount in default of respective
banks are enclosed as Annexure 15(i) to 15(x) in Volume II and Annexure 16(i) to
16(xx) in Volume III, Annexure 17(i) to 17(x) in Volume IV, Annexure 18(i) to 18(xiii) in
Volume IV, Annexure 19(i) to 19(x) in Volume IV, Annexure 20(i) to 20(ix) in Volume
V, Annexure 21(i) to 21(x) in Volume V, Annexure 22(i) to 22(x) Volume V and
Annexure 23(i) to 23(x) in Volume V.
The perusal of the above documents indicates that the Company is in default and
the net worth has drastically eroded and therefore, required initiation of the
Corporate Insolvency Process in respect of the Company under the above Section.
HYDERABAD BENCH 291
11. The Learned Counsel further submits that the Company Board, in its Board
Resolution dated 31.01.2017 (Annexure 7; Page 29), has proposed Mr.
Chodavarapu Bala Mouli as the Insolvency Professional (Interim Resolution
Professional). Accordingly, Mr. Chodavarapu Bala Mouli (Regd No: IBBI/IPA-001/
IP-00690/2016-17/2156) has also filed his acceptance letter (Annexure 8; Pg
29A) wherein, he agreed to accept the appointment as the Interim Resolution
Professional, if an order admitting the present application is passed and that he
is currently not serving as an Interim Resolution Professional/resolution
professional/liquidator. He further certifies that there are no disciplinary
proceedings pending against him with the Board or Indian Institute of Insolvency
Professionals of ICAI.
12. I find that Mr. Ch. Bala Mouli is eligible to be appointed as Insolvency
Professional for the Petitioner Company, in all respects, for initiating the Insolvency
Proceedings in respect of Kamineni Steel and Power India Private Limited.
13. The Insolvency and Bankruptcy Code, 2016 was enacted by Parliament in
67th year of Republic of India. The objective of the Insolvency and Bankruptcy
Code is to consolidate and amend the laws relating to reorganization and
in a time bound manner for maximization of value of assets of such persons, to
stakeholders, including alteration in priority of payment of government dues
and to establish an Insolvency and Bankruptcy Fund, and matters connected
therewith or incidental thereto. An effective legal framework for timely resolution
of insolvency and bankruptcy would support development of credit markets
and encourage entrepreneurship. It would also improve ease of doing Business,
and facilitate more investments leading to higher economic growth and
development.
14. I find that the present Petition/Application, (as referred under Section 10(2) and
10(3) of the IBC.2016), which has been filed by the Petitioner, has been complied
with all the requirements as mentioned above and thus it is a fit case to admit the
Petition/application.
and 25 and other applicable provisions of the IBC, 2016, I, hereby, pass the
following Orders:
a. I admit the present Company Petition/Application
b. I declare a moratorium by prohibiting the following actions:
I. The institution of suits or continuation of pending suits or proceedings

other authority;
interest therein;
c. Direct to cause the public announcement of initiation of Corporate Insolvency
Resolution Process of the Company as per the details given in sections 15(1)
and 15(2) on the www.ibbi.gov.in (designated website of Insolvency and
Bankruptcy Board of India, circulated vide IIBI/IP/PUBLIC ANN./221 dated
01.02.2017) in addition to other accepted modes of publication, immediately
and call for submission of claims as per Section 15 of the IBC read with
Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency
d. I appoint Mr. Chodavarapu Bala Mouli (Regd No: IBBI/IPA-001/IP-00690/
2016-17/2156) as an Interim Resolution Professional.
e. Direct the personnel of Kamineni Steel and Power India Private Limited, to
assist and cooperate with Interim Resolution Professional on collecting
necessary information and management of the company.
f. I direct the interim Resolution Professional, to constitute a committee of
21. The first meeting of the committee of creditors, shall be held within 7
days of the constitution of committee of creditors and their decision has to
be communicated to the Tribunal as per Section 22.
g. I direct the Interim Resolution Professional to follow all the applicable
and Bankruptcy Board of India (Insolvency Resolution Process for
Corporate Persons) Regulations, 2016.
h. Post the case to 13.03.2017
Sd/-
Rajeswara Rao Vittanala
Member (Judicial)
HYDERABAD BENCH 293
M/S VNR INFRASTRUCTURE LTD.

Name of the Corporate Debtor/ M/s VNR Infrastructure Ltd
Applicant
Company Petition No. CP(IB) No. 12/10/HDB/ 2017


1. VNR Infrastructure Limited (“Corporate Debtor” or “CD”) was initially
incorporated on 18.10.2005 in State of Tripura and owned a factory located
in South Tripura District. The CD is engaged in manufacturing activities,
purchase of Iron and Steel as Raw Materials and then converting various
items of Iron and Steel.
2. The CD commenced commercial production on 01.02.2009 and was
engaged in manufacture of Railway Bridge, Steel structure. The CD’s Annual
Balance Sheet (“ABS”) for Financial Year ended 31.12.2015 showed net
worth as Rs. 119.81 crores consisting of paid up share capital of Rs. 19.87
crores and free reserves of Rs. 99.94 crores.
3. The CD became sick and filed reference on 17.03.2016 in BIFR under
section 15(1) of SICA. Vide order dated 02.06.2016, the reference was
registered as Case No. 96/2016.
4. Vide order dated 14.07.2016, BIFR was of the view that the reference filed
by CD was worthy of registration as sick company, as its Net Worth had
been substantially eroded.
5. On the dissolution of BIFR, the present proceedings came to be filed before
the Bench.
6. As per CD, as on 31.12.2016, total outstanding, excluding the Principal not
due with respect to secured creditors is Rs. 763.03 crores and unsecured
creditors is Rs. 339.75 crores.

A. Considering that the BIFR had given a prima facie finding that CD was in
default and its Net Worth had eroded drastically, the Bench admitted the
application and passed following order:
i. Appointing Mr. Devendra Padamchand Jain as Interim Resolution
Professional and directed the IRP to constitute a committee of
creditors, after collation of claims.
ii. Declaring a moratorium under section 14 of the Code. Direction to
cause public announcement of initiation of Corporate Insolvency
Resolution Process under section 13 of the Code.
HYDERABAD BENCH 295

CP(IB) No. 12/10/HDB/2017
Date: 10.02.2017
In the matter of:
VNR Infrastructure Limited
#8-2-310/17, Road No.14, Banjara Hills,
Hyderabad, Telangana .... Petitioner
Counsel for the Petitioner : Sh. Rajesh Bohra and Sh. S.K.Goyal
CORAM :
ORDER
(As per Raieswara Rao Vittanala, Member (J))
1. The present Company Petition bearing number 12/10/HDB/2017, has been

filed by VNR Infrastructures Ltd (hereinafter referred as the Company) under Section
10 of the Insolvency and Bankruptcy Code, 2016 read with Rule 7 of the Insolvency
and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, by seeking to
initiate Corporate Insolvency Resolution Process in respect of VNR Infrastructures
Limited.
contents raised in Form No.6, further submits that VNR Infrastructure Limited, was
incorporated on 18th October, 2005 and CIN changed upon formation of Telangana
State and the new present CIN is U45200TG2005PLC047812. It is engaged in
manufacturing activities, purchase of Iron and Steel as Raw Materials and then
converting into various items of Iron and Steel. The Nominal Share Capital of the
Company is Rs.3000 lacs and the Paid up capital is Rs. 1987.49 lacs.
3. The Learned Counsel submits that the Company became sick, and filed a
Reference on 17.03.2016 in BIFR under Section 15(1) of the Sick Industrial Companies
(Special Provisions) Act, 1985 and the aforesaid reference has been registered as
Case No. 96/2016, as per order dated 02.06.2016, passed by the Hon'ble Chairman,
BIFR.
4. The Learned Chairman of BIFR, vide Order dated 14.07.2016, after examining
the material documents and pleadings, including the audited Balance Sheet
dated 31.12.2015, filed by the Petitioner Company, was of considered view that
the Reference filed by Appellant Company (Petitioner company herein), is worthy

of Registration as a sick company, as its Net Worth has been eroded substantially.
5. The Learned Chairman of BIFR, has further passed an Order dated 10.11.2016,
by way of summary record of proceedings of the hearing. It is stated therein that
the Company was initially incorporated in the State of Tripura on 18.10.2005 and
owned a factory located in South Tripura District. The Company had commenced
commercial production on 01.02.2009 and was engaged in manufacture of
Railway Bridge, Steel structure, spl. Steel Structure, which was a product listed in
the First Schedule of IDR Act, 1951.The Company's ABS for financial year (FY)
ended 31.12.2015 showed its net worth (NW) as Rs. 119.81 Crores consisting of
paid-up share capital Rs.19.87 crores and free reserves of Rs. 99.94 crores. The
entire net worth was claimed to have been fully eroded due to accumulated
losses which stood at Rs. 125.42 crores. The Company's investment in plant and
machinery (P & M) was Rs. 45.43 crores. The Learned Chairman of BIFR, also
passed Interim Orders.
6. The Learned Counsel, further submits that the summary proceedings passed
on 10.11.2016, was last and not listed thereafter, as the BIFR was dissolved with
the effect from 1st December, 2016. Accordingly, he approached this Tribunal in
prescribed format, duly complying the procedure mentioned in the said provisions.
7. The Learned counsel for the Petitioner submits that, as on 31.12.2016, total
outstanding (amount in default) excluding the Principal not due with respect to
the Secured Creditors (Banks and Financial Institutions)) is Rs. 763.03 Crores and
that of Unsecured Creditors (Bank/FIs/NBFCs/Non Fund based outstanding i.e.,
LCs, BG, Bill discounting, etc.) is Rs. 339.75 crores, besides other private creditors.
8. The Learned Counsel, further submits that default is still continuing and it
required in initiation of Corporate Insolvency Resolution Process in respect of the
Company, by this Tribunal and thus filed Company Petition before this Tribunal
under Section 10 of IBC, 2016 read with Rule 7 of the Insolvency and Bankruptcy
(Application to Adjudicating Authority) Rules, 2016.
9. I have considered the entire material, and heard the arguments of the Learned
Counsel for the Petitioner. It is not in dispute that BIFR has given a prima facie
finding, that the Company is in default and the Net Worth was drastically eroded.
I am also of considered view that the Company is in default and the net worth has
drastically eroded and therefore, required adjudication of the Tribunal under the
above Section.
10. The Learned Counsel further submits that the Company Board, in its Board
Resolution dated 25th January, 2017, has chosen Mr. Devendra Padamchand
Jain as the Interim Resolution Professional. Accordingly, he was given an offer
HYDERABAD BENCH 297
letter dated 25.01.2017 and Sh. Devendra Padamchand Jain has accepted the
offer vide letter dated 25.01.2017.
11. I have perused the offer and acceptance and also the Certificate of Registration
of Sh. Devendra Padamchand Jain. Sh. D.P. Jain, has clearly mentioned in the
acceptance letter that he agreed to accept the appointment as the Interim
Resolution Professional, if an order admitting the present application is passed
and that he is currently not serving as an Interim Resolution Professional/resolution
professional/liquidator. He further certifies that there are no disciplinary
proceedings pending against him with the Board or Indian Institute of Insolvency
Professionals of ICAI.
12. I find that Mr. Devendra Padamchand Jain is eligible to be appointed as
Insolvency Professional for the Petitioner Company for initiating the Insolvency
Proceedings in respect of VNR Infrastructures Limited.
13. The Insolvency and Bankruptcy Code, 2016 was enacted by Parliament in
67th year of Republic of India. The objective of the Insolvency and Bankruptcy
Code is to consolidate and amend the laws relating to reorganization and
insolvency resolution of corporate persons, partnership firms and individuals in a
time bound manner for maximization of value of assets of such persons, to
stakeholders, including alteration in priority of payment of government dues and
to establish an Insolvency and Bankruptcy Fund, and matters connected therewith
or incidental thereto. An effective legal framework for timely resolution of
insolvency and bankruptcy would support development of credit markets and
encourage entrepreneurship. It would also improve Ease of doing Business, and
facilitate more investments leading to higher economic growth and development.
14. I find that the present Petition/Application, (as referred under Section 10(2) and
10(3) of the IBC.2016), which has been filed by the Petitioner, has been complied
with all the requirements as mentioned above and thus it is a fit case to admit the
Petition/application.
and 25 and other applicable provisions of the IBC, 2016, I, hereby, pass the
following Orders:
a. I admit the present Company Petition/Application
b. I declare a moratorium by prohibiting the following actions:
decree or order in any court of law. Tribunal, arbitration panel or
other authority;

interest therein;
c. Direct to cause the public announcement of initiation of Corporate
Insolvency Resolution Process of the Company as per the details given in
sections 15(1) and 15 (2), on www.ibbi.gov.in (designated website of
Insolvency and Bankruptcy Board Of India, circulated vide IIBI/IP/PUBLIC
ANN./221 dated 01.02.2017) in addition to other accepted modes of
publication, immediately and call for submission of claims as per Section
15 of the IBC read with Regulation 6 of the Insolvency and Bankruptcy
Board of India (Insolvency Resolution Process for Corporate Persons)
Regulations, 2016.
d. I appoint Mr. Devendra Padamchand Jain (Regd No: IBBI/IPA-001/IP-
00224/2016-17/1511) as an Interim Resolution Professional.
e. Direct the personnel of VNR Infrastructure Limited, to assist and cooperate
with Interim Resolution Professional on collecting necessary information
and management of the company.
f. I direct the Interim Resolution Professional, to constitute a committee of
21. The first meeting of the committee of creditors, shall be held within 7
days of the constitution of committee of creditors and their decision has to
be communicated to the Tribunal as per Section 22.
g. I direct the Interim Resolution Professional to follow all the applicable
h. Post the case to 13.03.2017
Sd/-
Rajeswara Rao Vittanala,
Member (J)
HYDERABAD BENCH 299
SYNERGIES-DOORAY AUTOMOTIVE LIMITED (SDAL)

Name of the Corporate Debtor Synergies-Dooray Automotive Limited
(SDAL)
Company Petition No. CP(IB) No. 01/HDB/ 2017

Bench NCLT, Hyderabad Bench

Amount Involved Not mentioned in the order

1. The present application is filed under section 10 of the Code to initiate
corporate insolvency resolution process by Synergies-Dooray Automotive
Limited (“Corporate Debtor” or “CD”).
2. CD was previously registered with BIFR as Case No. 135 of 2005 and
formulation of scheme was pending. During the pendency of proceedings,
BIFR, vide order dated 29.05.2012, directed dues of EXIM Bank to be settled
@ 26.66% of principal in full and final settlement of its dues against which
EXIM filed an appeal before AIFR which was pending.
3. EXIM bank assigned the debt to Edelweiss ARC and has taken measures
under Section 13(4)(taking possession of assets) by taking over symbolic
possession of assets. The corporate along with another secured creditor
filed an appeal before DRT which is pending now.
4. As on the date when Sick Industrial Companies (Special Provisions) Repeal
Act, 2003 (“SICA Repeal Act”) was notified and BIFR/AIFR dissolved, above
proceedings/appeals were pending.
5. As per section 4(b) of SICA Repeal Act, a company, in respect of which
above proceedings are pending may make a reference to NCLT under the
Code within 180 daysfrom the commencement of SICA Repeal Act, and
therefore, the present application was filed.

A. Upon scrutiny of the application, the same is found to be in order.
B. Upon submission by counsel for CD that EXIM Bank/Edelweiss ARC have
allegedly taken action and measures under section 13(4) of the SARFAESI
Act, the Bench noted that this was fit case for issuance of Moratorium
under section 14 of the Code and it restrained EXIM Bank/Edelweiss ARC
from taking any action against the CD.
C. The Bench appointed Ms. Mamta Binani as Interim Resolution
Professionals proposed by the CD. The IRP was directed to comply with
the requirement of issuance of public announcement and also to submit
the progress report before the next date of hearing.
HYDERABAD BENCH 301

HYDERABAD BENCH, AT HYDERABAD
CP (IB) No. 01/HDB/2017
In the matter of
Synergies-Dooray Automotive Limited (SDAL)
(Corporate Debtor)
6-3-855/10A, Sampathji Appts, Saadat Manzil, Ameerpet,
Hyderabad 500038 ..... Petitioner
Counsel for the Petitioner: Sh. A.D. Gupta, Advocate
CORAM :
Hon'ble Mr. Ravikumar Duraisamy, Member (Technical)
ORDER
The Bench passed the following Order:

1. Heard Sh. A.D. Gupta, Learned Counsel for the Petitioner.
2. The present Company Petition has been filed by Synergies-Dooray Automotive
Ltd (hereinafter referred to as "Corporate Debtor" or "Company Petitioner") for
initiation of the Corporate Insolvency Resolution Process (CIRP) under Section 10
of the Insolvency and Bankruptcy Code, 2016 (IBC) read with Rule 7 of Insolvency
and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 on 17.01.2017.
3. The Learned Counsel submits that the Petitioner Company was earlier
registered with BIFR as Case No. 135 of 2005 and formulation of Scheme was
pending before the BIFR.
4. During the pendency of the proceedings, the BIFR vide its Order dated
29.05.2012, directed the dues of EXIM bank to be settled @ 26.66% of principal in
full and final settlement of its dues. Against the said order, the EXIM bank filed
Appeal No. 137/2012 before AAIFR which is pending.
5. The BIFR vide order dated 25.06.2013 held that Alchemist Asset Reconstruction
Company Co. Ltd (AARC) controls 55% and Edelweiss 45% of the Debt (as per
Section 2(I)(zd) of the SARFAESI Act and the said application Edelweiss has filed
Appeal No. 108/13 dismissed against the said order.
6. The Learned Counsel further submits that with the notification of SICA Repeal
Act, 2003, all proceedings or appeals of whatever nature pending before BIFR/
AAIFR got abated.
7. He also submits that, as per Section 4(b) of Sick Industrial Companies (Special
Provisions) Repeal Act, 2003 as amended by Section 252 read with Eight Schedule
of the IBC, a company in respect of which such appeal or reference or inquiry
pending before AAIFR or BIFR stands abated, may make reference to the National
Company Law Tribunal under the IBC within 180 days from commencement of
IBC, without fees in accordance with the provisions of IBC.
8. The Learned Counsel, therefore, submits that the present Company Petition
has been filed under Section 10 of the IBC read with Rule 7 of Insolvency and
Bankruptcy (Application to Adjudicating Authority) Rules, 2016 and he has complied
with prescribed procedure and filed supporting documents with respect to the
issue.
The Company Petition has been scrutinized by the Registry of this Tibunal and
submitted that the application is complete in all respects as law. As per Section 10
of the IBC, the Corporate Applicant may file an application for initiating Corporate
Insolvency Resolution Process with the adjudicating authority. Such an application
shall be filed in a form containing the information relating to its books of accounts
and such other documents relating to such period as may be specified and also
should propose a Resolution Professional as an Interim Resolution Professional.
10. We are satisfied that the Company Petition is a fit case to admit and thus,
hereby, admit the case.
11. The Learned Counsel for the Petitioner further submits that there is no litigation
pending against the Corporate Debtor as of date, but he expressed his
apprehension that any creditor may initiate legal proceedings against them during
the pendency of the case before the Tribunal.
12. He further submits that EXIM Bank (now assigned to Edelweiss ARC) has
allegedly taken action and measures under Section 13(4) of the SARFAESI Act by
taking symbolic possession of the assets. The said action and measures have
been challenged before the Hon'ble DRT by the Petitioner, as well as by another
secured creditor and both the Securitization Applications are pending as on date.
13. The Learned Counsel, therefore, submits that appropriate order may be passed
under Section 13(1)(a) and Section 14 of the IBC.
14. We have considered the above submissions and satisfied that it is fit case to
grant Moratorium under Section 13 (1)(a) for the purposes as referred to in Section
14 of the Code.
HYDERABAD BENCH 303
15. We hereby restrain the EXIM Bank/Edelweiss ARC, from taking any action
against the issues raised/subject-matter in present Company Petition. We also
make it clear that any party who wants to initiate any proceedings against the
Corporate Debtor/ Company Petitioner, the same should be in accordance with
the IBC.
16. The Learned Counsel for the Petitioner also submits that the Corporate Debtor/
Company Petitioner has passed a resolution dated 9th December, 2016 proposing
to appoint Ms. Mamta Binani as Interim Resolution Professional. In pursuant to
the above, Ms. Mamta Binani (Reg. No. IBBI/IPA-02/2016-17/01) has submitted a
letter dated NIL to NCLT by agreeing to accept appointment as Insolvency
Resolution Professional, if an Order admitting the present application is passed
and further declared that she is duly qualified to practice as an Insolvency
Professional and she is not currently serving as interim Resolution Professional/
Resolution Professional/liquidator and that there are no disciplinary proceedings
pending against her with the Board or ICSI Insolvency Professionals Agency. So
she submits that she is eligible to be appointed as a Resolution Professional in
respect of the Corporate Debtor/ Company Petitioner in accordance with the
provisions of the Insolvency and Bankruptcy Board of India (Insolvency Resolution
Process for Corporate Persons) Regulations, 2016.
17. We have considered the above submissions of the Insolvency Resolution
Professional and we are satisfied that Ms. Mamta Binani is eligible to be appointed
as Interim Resolution Professional for the Corporate Debtor/ Company Petitioner
and is directed to take all necessary actions in accordance with relevant provisions
of Insolvency and Bankruptcy Code, 2016.
18. We direct all the management staff/officials of the Corporate Debtor/Company
Petitioner to extend full co-operation to the Interim Resolution Professional.
19. The Interim Resolution Professional is also directed to submit the progress
report of the case before the next date of hearing.
Post the case to 15.3.2017
Sd/- Sd/-
Member (T) Member (J)
KOLKATA BENCH - I 305
KOLKATA BENCH - I
306
KESHAV SPONGE & ENERGY PRIVATE LTD.

Name of the Corporate Debtor/ Keshav Sponge & Energy Private Ltd.
Applicant
Company Petition No. 40/2017
Bench NCLT, Kolkata Bench, Kolkata

Amount Involved Rs. 85.48 crores

1. With the coming into force of the Sick Industrial Companies (Special
Provisions) Repeal Act, 2003 and consequent dissolution of BIFR, Keshav
Sponge & Energy Private Ltd. (“Corporate Debtor” or “CD”), made a reference
under Section 10 of the IBC for initiation of Corporate Insolvency Resolution
Process in terms of Eighth Schedule to the Code within 180 days of the
commencement of the Code.
2. It was stated in the application that the CD is in default of about Rs. 81.74
crores with respect to the financial creditors and about Rs. 3.74 crores
with respect to operational creditors totalling to more than Rs. 85 crores.
The application was duly accompanied by list of creditors and the amount
of default committed with respect to the amount due.
3. The CD had been making loss, as could be seen from the Annual Accounts
for the FY 2015-16 on account of its operation. For the FY 2015-16, there
were accumulated losses of Rs. 20,00,58,068/- compared to Rs.
2,76,58,499/- at the end of March, 2015.

A. The Bench, taking note of the above defaults, list of creditors and losses
incurred by CD, observed that the figures revealed that there is little
possibility of the company paying back the principal amount of borrowing
in its entirety as well as the interest accrued thereupon from its operations.
order:
i. Appointed Mr. Adesh Kumar Mehta as the Interim Resolution
Professional (IRP).
ii. Declared Moratorium in terms of Section 14 of the Code. Directed

making of necessary Public Announcement under Section 13 of the
Code.

KOLKATA BENCH
KOLKATA
CORAM :
Ms. Manorama Kumari Hon'ble Member (J)
Shri S. Vijayaraghavan Hon'ble Member (T)
Company Petition No.40/2017
In the matter of :
Application under section 14 of the Insolvency and Bankruptcy Code, 2016
And
In the matter of :
Keshav Sponge & Energy Private Limited (KSEPL)
(Corporate Debtor/ Corporate Applicant) having its Office at 6/2, Moira Street,
Halwasiya Mansion, 3rd floor, Kolkata - 700 017
... Corporate Debtor/ Corporate Applicant
Counsels on Record :
1. Mr. Nilesh Sharma for the Corporate Debtor/Applicant
Date of the hearing : 13.02.2017
Date of Pronouncing the order : 16.02.2017
ORDER
This Company Petition has been filed by Corporate Debtor M/s. Keshav Sponge
& Energy Private Ltd. supported by an affidavit to initiate Corporate Insolvency
Resolution Process. The application has been submitted in form 6 as provided
under the Insolvency and Bankruptcy Code 2016. The applicant has stated in the
application that he has given this application on the basis of Resolution passed
by Board of Directors dated 18.01.2017 to initiate Corporate Insolvency Resolution
Process before the NCLT. The applicant has also filed the copy of Board Resolution
as Annexure-4. The applicant has also submitted a detailed note before the BIFR
in Annexure-10, wherein it is mentioned that as per proviso to section 4 of SICA
Repeal Act, company in respect of which such reference stands abated may
make a reference to the NCLT under the Insolvency and Bankruptcy Code 2016
within 180 days from thecommencement of the Insolvency and Bankruptcy Code
2016. It has been stated in the application that reference made to the BIFR in view
of the proviso to section 4 of SICA Repeal Act stands abated and he is at liberty to
submit application within 180 days from the commencement of Insolvency and
Bankruptcy Code 2016 to NCLT. The applicant has also submitted a list of financial
creditors and operational creditor which is annexure 15(Colly) at pages 302 to
308 of the application. It has been stated in the application that the company is in
default of about Rs.81.74 crores with respect to financial creditors which is at
Annexure-5 (page 16) of the application. The particulars of the financial creditors
and operational creditors is given in the table below including secured and
unsecured creditors, which is at Annexure 12 (pages 203 to 268) with the
application.
Financial Year 2014-15
Financial Creditors Rs.81.74 crores
Operational Creditors Rs. 3.74 crores
Total - Rs.85.48 crores
Company has also been making loss as could be seen from the balance-sheet
2015-16 on account of its operation. Accumulated losses at the end of the financial
year 2015-16 also shows accumulated loss of Rs.20,00,58,068/- compared to
Rs.2,76,58,499/- at the end of March, 2015. The applicant has also given a list of
creditors regarding the default committed with respect to amount due to the
creditors (both financial as well as operational creditors), as required under section
10 of the IBC, 2016. The figures reveal that there is little possibility of the company
paying back the principal amount of borrowings in its entirety as well as the
interest accrued thereupon from operations of the company.
In the circumstances mentioned above, we admit the petition for initiating the
Corporate Resolution Process and declare a moratorium and public
announcement as stated in section 13 of IBC 2016. The relevant sections 13 and
14 are reproduced below for the purpose of convenience.
13. Declaration of moratorium and public announcement . – (1) The
Adjudicating Authority, after admission of the application under section 7 or
section 9 or section 10, shall, by an order -
(a) declare a moratorium for the purposes referred to in section 14;
(b) cause a public announcement of the initiation of corporate insolvency
resolution process and call for the submission of claims under section 15;
and
(c) appoint an interim resolution professional in the manner as laid down in
section 16.
(2) The public announcement referred to in clause (b) of sub-section (1) shall be
made immediately after the appointment of the interim resolution professional.
14. Moratorium. – (1) Subject to provisions of sub-sections (2) and (3), on the
insolvency commencement date, the Adjudicating Authority shall by order
declare moratorium for prohibiting all of the following, namely:-
moratorium period.
regulator.
completion of the corporate insolvency resolution process.
date of such approval or liquidation order, as the case may be. "
Necessary public announcement as per section 15 of the IBC, 2016 may be made
by the Company.
Company has also resolved to appoint Mr. Adesh Kumar Mehta, to be appointed
as Interim Resolution Professional and submitting a resolution plan to NCLT as
required under the IBC Act which is at Annexure-11 of the application. Mr. Adesh
Kumar Mehta has submitted his consent as stipulated in Form-2 of the NCLT
Rules. The details and registration number given in Petition, is as follows:
Mr. Adesh Kumar Mehta

10/63, Old Rajender Nagar,
New Delhi - 110 060
mehta_adesh@yahoo.com
Regn. No.IBBI/IPA-002/IP-00046/2016-17/1264
The applicant/petitioner has also certified the fact that Mr. Adesh Kumar Mehta is
fully qualified and permitted to act as an Interim Resolution Professional in
accordance with Code and the Associated Rules and Regulations.
The application for initiation of Corporate Insolvency Resolution Process is
accepted and Mr. Adesh Kumar Mehta, is hereby appointed as Interim Resolution
Professional. He will initiate the process as per the Rules.
List the matter on 16th for further orders.
(Manorama Kumari) (S. Vijayaraghavan)
Member (J) Member(T)
Signed on this 16th Day of February, 2017
KOLKATA BENCH - II 313
KOLKATA BENCH - II
314
PROWESS INTERNATIONAL PVT. LTD.

Name of the Corporate Debtor Prowess International (P) Ltd.
Name of the Operational Parker Hannifin India Pvt. Ltd.

Creditor/Applicant
Company Petition No. CP No. 150/2017

Bench NCLT, Kolkata Bench
Section involved Section 8 and 9 of IBC, 2016 (Code)
Amount involved Rs. 45,73,250/-

1. In response to the purchase order dated July 28, 2014 issued by Prowess
International Private Limited (“Corporate Debtor” or “CD”),Parker Hannifin
India Private Limited(“Operational Creditor” or “OC”) had manufactured
and supplied certain materials such as Hydraulic Power Pack for EAF,
Hydraulic Power Pack for LAF etc.
2. OC raised two invoices on March 7, 2015 for a sum of Rs. 22,03,500/- and
Rs. 19,49,250/- and other two invoices were raised on March 11, 2015 and
March 14, 2015 for a sum of Rs. 10,17,000/- and Rs. 22,03,500/- respectively.
Thus, the CD was liable to pay a total sum of Rs. 73,73,250/-. However, the
CD paid a sum of Rs. 28,00,000/- only while the balance amount of Rs.
45,73,250/- had been due.
3. OC also filed a copy of the Board Resolution dated 23.01.2017 authorising
the initiation of Corporate Insolvency Resolution Process and a copy of the
bank statements showing that no payment had been received by it.
4. OC also filed notice under Section 433 and Section 434 of the Companies
Act, 1956 on March 29, 2015 and May 18, 2015. However, a demand
notice under the Code was filed on December 23, 2016.
5. OC proposed the name of Shri Arun Kumar Gupta as the Interim Resolution
Professional (IRP) and necessary declarations required under the Code
had also been furnished.

A. The Bench opined that the CD had committed a default of Rs. 45,73,250/
- and accordingly admitted the application.
i. Appointed Shri Arun Kumar Gupta as Interim Resolution Professional.
ii. Declared Moratorium as per the provision of Section 14 of the Code.
iii. Directed issuance of Public Announcement in terms of Section 15 of
the Code.
iv. Issuance of copy of order to the Corporate Debtor.

KOLKATA BENCH
KOLKATA
CORAM
Shri Vijai Pratap Singh Hon’ble Member (J)
Ms. Manorama Kumari Hon’ble Member (J)
In the Matter of:
The Insolvency and Bankruptcy Code, 2016;
In the Matter of :
-And-
An application for initiation of corporate insolvency resolution process by the
Operational Creditor under Section 8 and 9 of the Insolvency and Bankruptcy
Code, 2016;
In the Matter of:
-And-
Parker Hannifin India Pvt. Ltd., a private limited company incorporated under
the provisions of the Companies Act, 1956, having its address at Plot- EL-26,
MIDC, TIC Industrial Area, Mahape, Navi Mumbai- 400 709;
... APPLICANT I OPERATIONAL CREDITOR
In the Matter of :
-And-
Prowess International (P) Ltd., a private limited company incorporated under
the provisions of the Companies Act, 1956, having its address at A-18, 6th Phase
Industrial Area, Adityapur, Jamshedpur- 832 108, Jharkhand;
.. CORPORATE DEBTOR
1. Mr. Swatarup Banerjee, Advocate For the petitioner
2. Mr. Avishek Guha, Advocate For the petitioner
3. Mr. Avishek Sikdar, Advocate For the petitioner
Date of Pronouncing the order:
ORDER
This application has been filed under section 8 and 9 of the Insolvency and
Bankruptcy Code, 2016 by the Operational Creditor for initiation of Corporate
Insolvency Resolution Process against the Corporate Debtor, Prowess International
(P) Ltd. on account of default for not making payments of Rs.45,73,2501-1-. Details
of debt amount of the Corporate Debtor has been given in a chart which is exhibit
“G” at page no. 18 of the petition.
The Operational Creditor has submitted that in response to the Purchase Order
dated 28th July, 2014 issued by the Corporate Debtor for manufacture and supply
of certain materials, such as Hydraulic Power Pack for EAF, Hydraulic Power Pack
for LRF, Hydraulic Power Pak for VD, Spare for Hydraulic Power Pack, etc., the
Operational Creditor duly manufactured and supplied the said items to the
Corporate Debtor and raised four invoices asking for payment regarding supply
of the aforesaid items. Two invoices were raised on 7th March, 2015 for
RS.22,03,5001- and Rs.19,49,2501- and other two invoices were raised on 11th
March and 14th March, 2015 for a sum of RS.10,17,OOOI- and RS.22,03,500/-
respectively. The said invoices have been annexed as Exhibits “C” to “F” with the
petition. Thus, the Corporate Debtor was liable to pay a total sum of Rs.73,73,250/-.
The Operational Creditor has further submitted that out of the total invoice value,
the Corporate Debtor has only paid a sum of RS.28,OO,OOOI- to the Operational
Creditor and the balance sum of Rs.45,73,2501- is still due.
The Operational Creditor has again submitted that the said purchase order
alongwith the invoices constituted a legal, valid and binding contract between
the Operational Creditor and the Corporate Debtor for which the Operational
Debtor is liable to pay the Operational Creditor for the manufacture and supply of
the purchase order items.
The petitioner has also filed copy of the Board Resolution which is Exhibit “A”
which shows that petitioner no.1 vide Resolution dated 23.01.2017 unanimously
passed resolution to initiate Corporate Insolvency Resolution under Corporate
Insolvency and Bankruptcy Code, 2016. The petitioner has also filed bank
statements where deposits are made or credits are received by the
ApplicanVOperational Creditor. The petition has been signed by Ms. Priti Baria, as
Company Secretary of Parker Hannifin India Pvt. Ltd., who has been authorised by
the Board Resolution to present the petition under the Insolvency and Bankruptcy
Code, 2016 for initiating corporate insolvency process. On the basis of documents
filed by the petitioner, it appears that the Corporate Debtor has committed default
in making payment of Rs.45,73,250/-.
It appears from the record that all the documents filed with the petition have been
signed by Mrs. Priti Bana. who was authonsed to present the petition The petitioner
has also filed copies of the notice under section 433 and 434 of the Companies
Act, 1956 dated 29th March, 2015 and 18th May, 2015 and Demand Notice dated
23rd December. 2016 and also proof of delivery which are “Exhibit-L, Exhibit-M
and Exhibit-N” respectively at page nos 41 to 59 of the petition.
The petitioner has also proposed the name of Shri Arun Kumar Gupta as Interim
Resolution Professional whose registration number and Email 10 as mentioned
is given as under:
Shri Arun Kumar Gupta, P-15, Bentinck Street, Kolkata- 700 001
Registration No.: IBBI/IPA-001/1P-P00013/2016-2017/10037
The petitioner has also certified that Shri Arun Kumar Gupta is fully qualified and
permitted to act as Interim Resolution Professional. The proposed IRP. Shri Arun
Kumar Gupta has also given his consent letter in form no.2 of Insolvency and
Bankruptcy Code (Application to Adjudicating Authority) Rules, 2016 and he has
also certified that no disciplinary proceeding is pending against him with the
Board or Indian Institute of Insolvency Professionals of ICAI, Insolvency
Professional Agency.
On the above basis, it is clear that the Corporate Debtor has committed default for
not making payment of debt of Rs.45,73,2501-. Therefore, the petition is admitted
and Shri Arun Kumar Gupta is appointed as Interim Resolution Professional.
Moratorium is also declared as per provision of section 14 of the Insolvency &
Bankruptcy Code, 2016. Direction is also being issued for issuing public
announcement in terms of section 15 of Insolvency & Bankruptcy Code, 2016. The
petitioner is also directed to serve the copy of the order on the Corporate Debtor.
This Order be communicated to the Financial Creditor as well as Corporate Debtor
in terms of section 7 of the Insolvency and Bankruptcy Code, 2016.
List on 28th April, 2017 for submission of progress report by the Interim
Resolution Professional.
Sd/- Sd/-
(Manorama Kurnari) (Vijai Pratap Singh)
Member(J) Member (J)
Singed on this 20th day of April, 2017.
R.G. SHAW & SONS PVT.LTD.

Name of the Corporate Debtor R.G. Shaw & Sons Pvt. Ltd.
Name of the Financial M/s Naviplast Traders Pvt. Ltd. And Others
Creditors/Applicants
Company Petition No. CP No. 186/2017

Bench NCLT, Kolkata Bench
Amount involved Rs. 3,17,74,253

1. M/s Naviplast Traders Pvt. Ltd. And Others (“Financial Creditors” or “FC”)
disbursed debt totalling to Rs. 3.15 crores on different dates out of which
an amount of Rs. 3,17,74,253/- was outstanding on January 31,2017.
2. Board resolution dated January 16, 2017 which authorised FC to initiate
the Corporate Insolvency Resolution Process under Section 7 of the Code
was filed by it along with the copy of bank statement evidencing the loan
amount granted by each financial creditor, dishonour of cheques issued
towards repayment of loan and receipt of part of loan and interest.
3. The FC also annexed copies of letters received by all other financial
creditors from R.G. Shaw & Sons Private Limited (“Corporate Debtor” or
“CD”) evidencing receipt of loan by the CD.
4. The FC proposed the name of Shri Sumit Binani as Interim resolution
5. However, the CD contended that the FC had not filed affidavit in support
of the documents and that the FC had initiated proceedings under
Section 138 of Negotiable Instruments Act on account of dishonoured
cheques.

A. On the basis of documents filed by the FC, the Bench admitted that the CD
had committed a default in making payment of Rs. 3,17,74,253/-
B. The Bench also noted that the petition was in proper Form No. 1 as
prescribed under the Insolvency and Bankruptcy (Application to
Adjudicating Authority) Rules, 2016, was notarised and was also signed
by all the 10 FCs and hence filing of separate affidavit is not required.
C. It was also held that the proceedings under Section 138 of Negotiable
Instruments Act are a different proceeding where liability occurs on account
of dishonoured cheques and this fact also supports the FCs’ case regarding
default committed by CD.
D. The Bench issued the following directions:
i. Appointed Shri Sumit Binani as an Interim Resolution Professional.
ii. Declared moratorium as per the provision of Section 14 of the Code.
iii. Directed issuance of public announcement in terms of Section 15 of
the Code. Issuance of copy of order to the Corporate Debtor.

KOLKATA BENCH
KOLKATA
CORAM :
In the Matter of:
In the Matter of :
-And-
Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016
In the Matter of:
-And-
M/s. Naviplast Traders Private Limited, 4 Fairlie Place, 6th floor, Room No.604,
Kolkata- 700 001;
M/s. Krishna Park Infracon Private Ltd., 78, Bentick Street, 5th floor, Kolkata-
700 001; .
M/s. Rosewood Highrise Private Ltd., 29, Robert Street, 1stfloor, Kolkata- 700
012;
M/s. Crabel Distributors Private Limited, 85, Metcalfe Street, 2nd floor, Kolkata-
700 013;
MIs. Infosoft Global Private Limited, 17 Bangur Avenue, Block-D, Ground floor,
Lake Town, Kolkata - 700 055;
MIs. Kit Commercial Pvt. Ltd., 4/1, Middleton Street, 4th floor, Sikkim House, P .S.
Park Street, Kolkata - 700 071;
M/s. Neer Suppliers Private Limited, Vikash Surya Plaza, Plot No.1, Room NO.105,
Block-CU, ~slfloor, LSC Mkt. Pit, New Delhi-110088;
M/s. Frazer Goods & Supply Pvt. Ltd., Shantiniketan Building, 8 Camac Street,
5th floor, R.No.2: Kolkata - 700017;
M/s. Sumnex Mercantile Pvt. Ltd., 41, N.S. Road, Room No.402, Kolkata - 700
001;
M/s. Shirdi Plywood Private Limited (formerly known as MIs. Shiv Shakti Dealcom
Private Limited), 236A, Badu Road, Nadi Bhag, Tetultala, Madhyamgram, Parganas
North, Kolkata - 700 128;
... APPLICANTS I PETITIONERS
In the Matter of :
-And-
M/s. R. G. Shaw & Sons Private Ltd., 59, Lenin Street, Kolkata - 700013
.. CORPORATE DEBTOR I RESPONDENT
1. Mr. Akhilesh Kumar Srivasiav.a, Advocate
2. Mr. Aakash Sharma, Pr.C.S.
3. Mr. Kanishk Kantar, Advocate For the petitioner
1. Mrs.Manju Bhuteria, Advocate
2. Mr. Sidhartha Sharma, Advocate
3. Ms. Meenakshi Manot, Advocate
4. Ms. Namrata Basu, Advocate For the Respondents
Date of Pronouncing the order: 12.4.2017
ORDER
Per Sri Vijai Pratap Singh, Member(J)
This application has been filed under section 7 of the Insolvency and Bankruptcy
Code and under Rule 4 of the Insolvency & Bankruptcy (Application to
Adjudicating Authority) Rules, 2016 by 10 Financial Creditors jointly represented
by the petitioner no.1, MIs. Naviplast Traders Private Ltd. & Others for initiation
of Corporate Insolvency Resolution Process against the Corporate Debtor on
account of default for not making payments to different creditors total amounting
to Rs.3,17,74,253/-. Details of debt amount of all the creditors has been given in
a chart which is exhibit “B” of the petition at page nos. 33 and 34.
The total amount of debt disbursed by all the ten creditors as given at page no.32,
which is. exhibit “A” of the petition, which shows that the petitioner no.1 granted
debt of Rs.10 lakhs, petitioner no.2 granted debt of Rs.25 lakhs, petitioner No.3
granted debt of Rs.50 lakhs, petitioner no.4 granted debt of Rs.25 lakhs, petitioner
no.S granted debt of Rs.50 lakhs, petitioner No.6 granted debt of Rs.25 lakhs
petitioner no.7 granted debt of Rs.50 lakhs, petitioner no.B granted debt of Rs.50
lakhs, petitioner No.9 granted Rs.10 lakhs and petitioner no.10 granted debt of
Rs.20 lakhs, total amount of debt of Rs.3.15 crores were disbursed to Corporate
Debtors on different dates outstanding amount as on 31.01.2017 of all the Corporate
Debtors in common was Rs.3,17,74,253/-.
The petitioner has also filed copy of the Board Resolution which is Exhibit “C”
which shows that petitioner No.1 vide Resolution dated 16.01.2017 unanimously
passed resolution to initiate Corporate Insolvency Resolution under section 7 of
Insolvency and Bankruptcy Code, 2016. The petitioner has also filed money receipt,
bank statement with financial creditors evidencing the loan amount granted by
each financial creditor to the Corporate debtor, dishonour of cheques issued by
Corporate Debtor towards repayment of loan and payment of interest, receipt of
interest via NEFT and receipt of a part of the loan amount are annexed with the
petition. The petitioner has also annexed copies of letters received by all financial
creditors from the Corporate Debtor evidencing receipt of loan which has been
annexed with the petition. The petitioner has also annexed copies of cheques as
drawn in favour of each financial creditor by the Corporate Debtor towards
repayment of the loan and payment of interest which were dishonoured. Copies
of all these documents relating to all the applicants are Exhibit “C” to “L” (page 35
to 207 of the petition). All the documents which have been filed alongwith the
Petition are notarised by the Notary on dated 10th March, 2017 which bears the
signature and petition has been signed by Chinmoy Guchhait as Director of
Naviplast Traders Pvt. Ltd. who has been authorised by the Board Resolution to
present the petition under section 7 of the Insolvency and Bankruptcy Code, 2016
for initiating corporate insolvency process. On the basis of documents filed by the
petitioner, it appears that the Corporate Debtor has committed default in making
payment of Rs.3,17,74,253/-
It appears from the record that all the documents which have been filed are
notarised by Notary Public, Sri P.K. Dutta on 10.03.2017 and the petitioner no.1 who
was authorised to present the petition has signed the petition. The petitioner has
also filed proof of service of application which is at page No.34 which shows that
copy of application was sent by the petitioner to the Corporate Debtor via registered
post on dated 11.03.2017 and receipt is attached with the petition at page No.234.
Ld. Counsel for the Corporate Debtor, Smt. Manju Bhuteria has submitted that the
petitioner has not filed the affidavit in support of the documents. It appears from
the record that the petition is in proper form No.1 as prescribed under the Insolvency
and Bankruptcy Code (Application to Adjudicating Authority) Rules, 2016 and has
been notarised. The petitioner No.1 has signed on behalf of all the Corporate
Creditors and petition has been jointly presented by the 10 petitioners and every
company has passed the Resolution for initiating Corporate Insolvency Process
and copies of said Resolution have been filed with the petition.
The petitioner has also proposed the name of Shri Sumit Binani as Interim Resolution
Professional whose registration number and Email 10 as mentioned is given as
under:
Shri Sumit Binani,
2A, Ganesh Chandra Avenue,
Commerce House, Room No.6, 4th floor, Kolkata - 700 013.
Registration No.: IBBIIIPA-001I1P-N00005/2016-17/10025
Email address:ip.sumitbinani@gmail.com
The petitioner has also certified that Shri Sumit Binani is fully qualified and permitted
to act as Interim Resolution Professional. The proposed fRP, Shri Sumit Binani has
also given his consent letter in form no.2 of Insolvency and Bankruptcy Code
(Application to Adjudicating Authority) Rules, 2016 and he has also certified that
no disciplinary proceeding js pending against him with the Board or Indian Institute
of Professionals.
The Ld. Counsel for the Corporate Debtor has also raised the point that the petitioner
has not come with clean hands, so the petition is not maintainable. This point has
been raised on the basis that the petitioner has suppressed the fact that the
petitioners have initiated proceedings under section 138 of the Negotiable
Instrument Act on account of dishonoured cheques.
It is to be made clear that the proceedings under section 138 of Negotiable
Instrument Act is a different proceeding and liability occurs when a cheque is
dishonoured. This fact also supports the petitioners’ case regarding the default
committed by the Corporate Debtor. The petitioner has also filed a copy of the
dishonoured cheque along with the petition. So it cannot be said that the petitioner
has not come with a clean hand and suppressed the important facts.
The application is in proper form No.1 and documents which are required to be
annexed with the said form are all attached with the application. So it cannot be
said that there is need of filing separate affidavit in this regard when all the
documents are notarised by the Notary Public.
On the above basis, it is clear that the Corporate Debtor has committed default for
not making payment of debt of Rs.3,17,74,253/-. Therefore, the petition is admitted
and Shri Sumit Binani is appointed as Interim Resolution Professional. Moratorium
is also declared as per=provision of section 14 of the Insolvency & Bankruptcy
Code, 2016. Direction is also being issued for issuing public announcement in
terms of section 15 of Insolvency & Bankruptcy Code, 2016. The petitioner is also
directed to serve the copy of the order on the Corporate Debtor.
This Order be communicated to the Financial Creditor as well as Corporate Debtor
in terms of section 7 of the Insolvency and Bankruptcy Code, 2016.
List on 28th April, 2017 for submission of progress report by the Interim
Resolution Professional.
(Manorama Kumari) (Vijai Pratap Singh)

Member(J) Member (J)
Signed on this 12 day of April, 2017
M/S GUJARAT NRE COKE LIMITED

Name of the Corporate Debtor/ M/s Gujarat NRE Coke Limited
Applicant


1. M/s Gujarat NRE Coke Limited (“Corporate Debtor” or “CD”) filed the present
application to initiate Corporate Insolvency Resolution Process under
Section 10 of the Code read with Rule 7 of IBC (Application to Bench) Rules,
2016.
2. The CD stated in the application that it had committed default in respect to
the financial assistance from financial creditors and operational creditors.
3. The amount in default for financial/operational creditors is Rs. 808.65
crores. The CD had been making losses as could be seen from Annual
Accounts for the FY 2013-14 and 2014-15.
4. The CD also gave details of its assets and liabilities. While the total assets
of the CD were shown as Rs. 3,849.75 crores, the amount due to secured
and unsecured creditors was shown as Rs. 3,673.21 crores.

A. The Bench took note of the details of default given by the CD in its application
and also the names of Financial Creditors/Operational Creditors.
B. The Bench admitted the application and passed the following order:
i. Appointed Mr. Sumit Binani as an Interim Resolution Professional
(IRP).
Code.
iii. Directed causing necessary Public Announcement in terms of
section 13 of the Code.

KOLKATA BENCH
KOLKATA
CORAM :
Shri V. P. Singh Hon'ble Member (J)
In the matter of :
Application under section 10(1) of the Insolvency and Bankruptcy Code, 2016
And
in the matter of :
M/s. Gujarat NRE Coke Limited,
a listed Public Non-Government Company, limited by shares,
registered under the provisions of the Companies Act, 1956 bearing CIN
L51909WB1986PLCO40098 And having its registered office at 22,
Camac Street, Block C, 5th Floor, Kolkata 700016, West Bengal.
...Petitioner
1. Mr. Jishnu Choudhury
2. Mr. M.S. Tiwari for the petitioner
ORDER
This Company Petition has been filed by Corporate Debtor M/s. Gujarat NRE
Coke Limited in Form 6 under Rule 7 of the Insolvency and Bankruptcy (Application
to Adjudicating Authority) Rules, 2016 and supported by an affidavit to initiate
Corporate Insolvency Resolution Process. The application has been submitted in
Form 6 as provided under the Insolvency and Bankruptcy Code 2016. The applicant
has stated in the application that he has given this application on the basis of
Resolution passed by the Board of Directors dated 21/03/2017 to initiate Corporate
Insolvency Resolution Process before the NCLT. The applicant has also filed the
copy of Board Resolution as Annexure-VII.
The applicant has stated in the petition that the default to Financial Creditors have
been ascertained on the basis of the Corporate Debt Restructuring (CDR) Scheme
approved by the Consortium Lenders of the Company. The applicant has annexed
the names and addresses for correspondence of the Financial Creditors where
default has occurred and mentioned at page 751 of the petition indicating the
default amount year-wise which is part of Annexure VI, Exhibit C(1).
The applicant further annexed the names and addresses for correspondence of
the Operational Creditors where default has occurred and mentioned at page
755 of the petition indicating the default amount year-wise which is part of
Annexure VI, Exhibit C(2).
The particulars of the financial creditors and operational creditors is given in the
table below including secured and unsecured creditors. The amount in default
for financial/operational creditors is shown as Rs. 808.65 Crores at page 16 of
the petition. The date of default with respect to financial creditors is shown at
pages 752 and 753 of the petition along with the dates of default. The details of
operational creditors the amounts in default have been shown at page 755 of the
petition.
Financial Creditor - Rs. 3,698.58 Crores
Operational Creditor - Rs. 181.13 Crores (as on 15/03/2017)
Total - Rs. 3,879.71
The Company has also been making loss as could be seen from the balance-
sheet 2013-14 and 2014-15 on account of its operation Rs. 560.81 crores and Rs.
321.73 crores respectively.
The Company is having a negative cash flow for the year ended 2013-14 at Rs.
482.85 Crores and also in the financial year ended 31.03.2015 it is shown as Rs.
65.49 Crores as mentioned in page 526 of the petition. Theassets and liabilities
has been enclosed vide Annexure VI Exhibit A at pages 695 and 696. The total
assets has been shown as 3849.75 Crores. The amount due to secured and
unsecured has also been shown which amounts toRs.3673.21 Crores.
In the circumstances mentioned above, it is proposed to admit the petition for
initiating the Corporate Resolution Process and declare a moratorium and public
announcement as stated in section 13 of IBC 2016 subject to the consent of the
proposed IRP being obtained in Form-2 under Rule 9 of the Insolvency and
Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The relevant
sections 13 and 14 are reproduced below for the purpose of convenience.
13. Declaration of moratorium and public announcement.
(1) The Adjudicating Authority, after admission of the application under section
7 or section 9 or section 10, shall, by an order-

and
section 16.
14. Moratorium.
moratorium for prohibiting all of the following, namely:-
authority;
moratorium period.
regulator.
date of such approval or liquidation order, as the case may be."
by the Company.
Company has also resolved to appoint Mr. Sumit Binani, Chartered Accountant,
having registration no. IBBI/IPA-001/IP-N00005/2016-17/10025 [e-mail address
(1) sumit binani@hotmail.com and (2) ip.sumitbinani@gmail.com to be appointed
as Interim Resolution Professional for ascertaining the particulars of creditors
and convening a Committee of Creditors for appointment of Resolution
Professional and for evolving a resolution plan.
Shri Sumit Binani has submitted his consent in Form-2 under Rule 9 of the Insolvency
and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.
The applicant/petitioner has also certified the fact that Mr. Sumit Binani is fully
qualified and permitted to act as an Insolvency Professional in accordance with
Code and the Associated Rules and Regulations.
admitted along with the Propsal for appointing an IRP . The Interim Resolution
Professional should convene a meeting of the Committee of Creditors and submit
the resolution passed by the Committee of Creditors.
List the matter on 24th April, 2017.
(S. Vijayaraghavan) (Vijai Pratap Singh)
Member(T) Member (J)
Signed on this, the 7th day of April, 2017
M/S PRECISION ENGINEERS & FABRICATRS PVT. LTD

Name of the Corporate Debtor M/S Precision Engineers & Fabricants Pvt.
Ltd.
Name of Operational Creditor/ M/s Berger Paints India Ltd.
Applicant
Company Petition No. C.P. No.173/2017
Amount involved Rs. 14.26,416 with 18 % p.a. interest

1. M/S. Berger Paints India Limited (“Operational Creditor”/ Applicant) is a
Public Listed Company incorporated under the Companies Act, 1956 and
has its registered office at 129, Park Street, Kolkata whereas the Corporate
Debtor (CD) in the present case is M/s. Precision Engineers & Fabricants
Pvt. Ltd. having its registered office at Shyama Prasad Mukherjee Road,
Flat No. 3D, Merlin Link Kolkata.
2. The Applicant sold gold worth Rs. 15,28,719 to the CD between May to
September,2013. The Applicant was paid an amount of Rs. Rs.5,017.24 for
some earlier supply. Part payment of Rs 33,546.17, Rs. 13,740.00 and Rs.
50,000.00 were made to CD resulting in operational debt of Rs 14.26,416
as principal amount plus Rs. 8,84,490/- interest as on 11.01.2017 charged
@18 % p.a. plus further interest from 12.01.2017 till actual payment.
3. The Applicant claimed that there was an oral contract due to which goods
sold are to be governed by the Sale of Goods Act, 1930 and the Indian
Contract Act, 1872.
4. A demand notice was issued by the Applicant through his counsel on
21.11.2016 u/s 434 of the Companies Act, 1956 for the dues. In response to
this, counsel for CD submitted that his client (i.e. CD) was inclined to pay
the dues but sought time since CD was in stress for some winding up
order. Also CD’s counsel requested the Applicant to withdraw the criminal
case pending before the MM, 18th Court, Calcutta.
5. Another demand notice was issued by the Applicant on 13.01.2017
demanding unpaid operational debt along with the interest of an amount

of Rs 14.26.416 in response to which the CD asked the applicant to consider
the earlier Memorandum of Settlement and withdraw the pending criminal
case.
6. The Applicant filled all the necessary documents like copy of worksheets,
invoices. Memorandum of Settlement, notice of demand, reply letter in
support of his petition.
7. The Applicant didn’t name anyone as Insolvency Resolution Professional

A. The Bench taking note of the application and all the documents annexed
thereto opined that it appears from all the discussions and documents
presented to it that the debtor has committed default and hence the
application is admissible and ordered to initiate the insolvency process.
B. The Bench did not however appoint the Insolvency Resolution Professional
(IRP) and ordered applicant to submit the name of an Interim Resolution
Professional within 7 days from the date of the Order.
C. The Bench declared a Moratorium as contemplated under section 14 of
the Code and ordered necessary announcement to be made by the
Applicant.

KOLKATA BENCH
KOLKATA
CORAM :
Shri S. Vijayaraghavan Hon’ble Member (T)
In the Matter of:
In the Matter of :
-And-
Section 8 and 9 and other applicable Provisions of the Insolvency and Bankruptcy
Code, 2016;
In the Matter of:
-And-
M/s. Berger Paints India Limited, a company, a company incorporated under
the provisions of the Companies Act, 1956 and having its registered office at 129,
Park Street, Kolkata - 700 017, represented by its Officer Administrator Shri Prasanta
Sengupta;
... Petitioner
In the Matter of :
-And-
Precision Engineers & Fabricators Private Limited, a company incorporated
under the provisions of the Companies Act, 1956 and having its registered office
at 166B, Shyama Prasad Mukherjee Road, Flat No.-3D, Merlin Link, Kolkata - 700
026;
.... Respondent
Counsels on Record:
1. Mr. Rohit Jalan, Advocate
2. Mr. Micky Chowdhury, Advocate. For the petitioner
Date of Pronouncing the order:
ORDER
The applicant being a Operational Creditor has filed this application in Form 5 as
provided under section 8 and 9 of the Insolvency and Bankruptcy Code 2016 read
with Rule 4 of the Insolvency and Bankruptcy Code (Application to Adjudicating
Authority) Rules, 2016 to initiate Corporate Insolvency Resolution Process against
Brief facts of the case are such that the Operational Creditor (hereinafter referred
to as “Petitioner”), is a public limited listed Company incorporated under the
Companies Act, 1956 having Identification No. L5143WB1923PLC004793 and
having its registered office at 129, Park Street, Kolkata - 700 017. Precision Engineers
& Fabricators Private Limited (hereinafter referred to as the “Corporate Debtor”)
having Corporate Identity Number U28111WB2005PTC105536, a private limited
company incorporated under the Companies Act, 1956 and having its registered
office at 166B, Shyama Prasad Mukherjee Road, Flat No.-3D, Merlin Link, Kolkata
- 700026.
The Petitioner, in its course of business, had sold goods worth Rs.15,28,719/- and
delivered to the operational debtor between May to September, 2013 under
various invoice numbers. Credit against earlier supply of RS.5,017.24 and part
payment of Rs.33,546.17, RS.13,740.00 and Rs.50,000.00 were made from time
to time, resulting operational debts payable by the Corporate Debtor to the extent
of Rs.14,26,416/- to the Operational Creditor, being the value of goods sold and
delivered alongwith interest @ 18% per annum being the prevalent market rate of
lending from the due date till actual payment. The Petitioner further submitted
that as on 11.01.2017, a total sum of Rs.23,10,906/- being Rs.14,26,416/- being the
principal dues and Rs.8,84,490/- being the interest till 11.01.2017 @18% per annum
together with further interest from 12.01.2017 till actual payment. In this context, a
copy of the worksheet showing workings for computation of default with respective
dates in tabular form has been enclosed with the petition. The petitioner also
submitted that the said sums were payable on the dates mentioned in the
respective invoices and as such the date of invoice is the date of default.
The Petitioner stated that as per the oral contract with the Corporate Debtor, the
petitioner had sold the goods which is governed by the provisions of the Sale of
Goods Act, 1930 and Indian Contract Act,1872. The petitioner annexed the copies
of the following documents along with the petition.
(1) Invoices, (2) Memorandum of settlement dated 3rd November, 2015, (3) Notice
of demand dated 21.11.2016, (4) Reply letter dated 12/12/2016, (5) Notice dated
13/01/2017 issued under Form 3 of the said Code along with evidence of delivery
of the said notice at the registered office of the Corporate Debtor, (6) Reply letter
dated 09/02.2017 against notice dated 13/01/2017 issued under Form 3 of the
said Code and (7) Board’s Resolution dated 09.01.2017.
It is observed that the Petitioner’s Counsel has issued Notice of demand dated
21st November, 2016 under section 434 of the Companies Act,1956 to the
Respondent for not paying the dues as per the Memorandum of Settlement dated
3rd November, 2015. In reply, the Respondent’s Counsel has submitted vide his
letter dated 12th December, 2016 stating that his client was inclined to pay the
dues as per further negotiation as his client was in stress for some winding up
order and also requested to advice his client to withdraw the pending criminal
case being filed before the Metropolitan Magistrate, 18th Court, Calcutta.
The petitioner further issued Demand Noticellnvoice dated 13thJanuary, 2017
demanding unpaid operational debt along with the interest amounting to
Rs.14,26,416/-. In reply to the above Notice dated 13th January, 2017, the
Respondent’s Counsel has submitted vide his letter dated 9th February, 2017 to
the Petitioner to consider the earlier Memorandum of Settlement prospectively
and withdraw the pending criminal case.
It appears that Corporate Debtor has committed default in making payment of
unpaid operational debt of Rs.14,26,416/-. The Petitioner, therefore, has filed this
Petition under section 7 of the IBC, 2016 but has not proposed any name as
Interim Resolution Professional
and
section 16.
14. Moratorium.
moratorium period.
regulator.
date of such approval or liquidation order, as the case may be.”
by the Company.
Corporate Insolvency Resolution Process and declare a moratorium and public
announcement as stated in section 13 of the IBC, 2016. Necessary public
announcement as per section 15 of the IBC 2016 may be made by the applicant
company. On the basis of records available with the applicant, it appears that the
Corporate Debtor has committed default in making payment of unpaid operational
debt of Rs.14,26,416/—. The above order may be communicated to the Operational

Creditor and the Corporate Debtor.
The petitioner has not given the name of any Interim Resolution Professional. So,
the Petitioner is directed to submit the name of Interim Resolution Professional
alongwith his full address and consent within seven days from the date of this
Order.
List the matter on 11.4.2017 for further orders.
(S. Vijayaraghavan) (Vijai Pratap Singh Singh)
Signed on this 4 day of April, 2017
MBL INFRASTRUCTURES LIMITED

Name of the Corporate Debtor MBL Infrastructures Limited
Name of Financial Creditor/ RBL Bank Limited

Applicant

Amount involved 7,26,47,146/-

1. RBL Bank Limited, being the Financial Creditor (“FC”), in the course of its
business of lending, extended financial assistances of Rs. 70 crores in
form of credit facilities to MBL Infrastructures Limited (“Corporate Debtor”
or “CD”) in May 2014.
2. FC entered into a consortium led by State Bank of Mysore and merged
credit facilities with the Consortium and formed a new consortium in or
around June 2014.
3. The credit facilities of CD were enhanced by FC from Rs. 20 crore to Rs. 40
crore, however, the same were not disbursed due to receipt of negative
feedback about CD from reliable sources.
4. The CD defaulted in making the payments. As on 01.03.2017, a sum of Rs.
7,26,47,146/- was outstanding towards principal and interest and payable
by CD. Despite issuance of legal notice by FC, the CD did not make the
payment and accordingly, the application was filed.

A. The Bench, having regard to the documents attached with the application,
correspondences made with the Corporate Debtor and demand notices
issued by Financial Creditor, was of the opinion that Corporate Debtor had
committed default in making payment of credit facilities to the tune of Rs.
7 crores.
B. Accordingly, the Bench passed the following order
i. Admitted the application.
ii. Appointed Mr. Atanu Mukherjee as the Interim Resolution

Professional (IRP).
iii. Declared Moratorium in terms of Section 14 of the Code Directed
causing necessary Public Announcement in terms of Section 13 of
the Code

KOLKATA BENCH
KOLKATA
CORAM :
Shri Vijai Pratap Singh Hon'ble Member (J)
In the matter of :
Application under section 7 of the Insolvency and Bankruptcy Code, 2016 read
with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority)
Rules, 2016
And
In the matter of:
MBL Infrastructures Limited,
having Corporate Identity Number
L27109WB1995PLC073700, a company incorporated under the
Companies Act, 1956 and having its registered office at 2/3, Judges Court
Road, Divine Bliss, 1St floor, Kolkata 700 027, in the State of West Bengal, within
the aforesaid jurisdiction;
And
In the matter of :
RBL Bank Limited,
a Banking Company and having Identification Number U65191
PN1943PL0007308, a company incorporated under the Companies
Act, 1956 and having its registered office at Fist Lane, Shahupuri,
Kolhapur-416 001 and having one of its Zonal Office at 28,
Dr. Gopal Das Bhawan, GF, Barakhamba Road, Connaught Place,
New Delhi - 110 001. ....... Applicant
Versus
MBL Infrastructures Limited,
having Corporate Identity Number
L27109WB1995PLC073700, a company incorporated under the Companies
Act, 1956 and having its registered office at 2/3, Judges Court Road, Divine
Bliss, 1st floor, Kolkata 700 027, in the State of West Bengal, within the
aforesaid jurisdiction ..... Corporate Debtor
1. Ms. Sushmita Banerjee, Advocate
2. Mr. Narayan Debnath, Advocate for the petitioner.
1. Mr. Abhijit Mitra, Sr. Advocate
2. Mr. Samapriya Mukherjee, Advocate
3. Ms. Rajshree Kajaria, Advocate for Respondent
ORDER
The applicant being a Financial Creditor has filed this application in Form 1 as
provided under section 7 of the Insolvency and Bankruptcy Code 2016 read with
Rule 4 of the Insolvency and Bankruptcy Code (Application to Adjudicating Authority)
Rules, 2016 to initiate Corporate Insolvency Resolution Process against the
Corporate Debtor.
Brief facts of the case are such that the Financial Creditor, RBL Bank Limited
(hereinafter referred to as "Applicant"), a Banking Company, having Identification
No. U65191PN1943PLC0007308 and having its registered office at Fsit Lane,
Shahupuri, Kolhapur- 416 001 and one of its Zonal Office at 28, Dr. Gopal Das
Bhawan, GF, Barakhamba Road, Connaught Place, New Delhi - 110 001 is duly
recognised as a banking institution by the RBI.
MBL Infrastructures Limited (hereinafter referred to as the "Corporate Debtor")
having Corporate Identity Number L27109WB1995PLC073700, a public limited
company incorporated under the Companies Act, 1956 and having its registered
office at 2/3, Judges Court Road, Divine Bliss, 1st floor, Kolkata 700 027, in the state
of West Bengal, within the aforesaid jurisdiction.
The Applicant has, in its course of its business of lending, had extended financial
assistance of Rs.70 Crores in form of credit facilities to the Corporate Debtor vide
its sanction letter dated 15.04.2014 at the request of the Corporate Debtor after
fulfilling certain terms and conditions. Both the applicant and Corporate Debtor
executed several documents towards availing the credit facilities in May 2014
and at the request of the Corporate Debtor, the applicant has also disbursed the
credit facilities on 15.05.2014.
The Applicant stated that as per the agreement with the Corporate Debtor, the
Applicant had entered into a consortium led by State Bank of Mysore, and had
merged the credit facilities with the Consortium and formed a new consortium in
or around 27.06.2014. The Corporate Debtor and Consortium Banks have executed
several documents time and again towards availing the credit facilities and Mr.
Anjanee Kumar Lakhotia further extended his personal guarantee for availing the
said credit facilities and for this purpose, the Corporate Debtor has mortgaged/
hypothecated some properties in favour of the Applicant and the other Consortium
Member banks.
The Applicant submitted that on 12.08.2015, at the request of the Corporate Debtor,
the credit facilities were enhanced by the applicant, i.e. Letter of Credit was
enhanced from Rs.20 crore to Rs.40 crore but the same was not disbursed due to
receipt of negative feedback about the Corporate Debtor from reliable sources.
The Corporate Debtor vide letter dated 16.01.2016 assured the Applicant of
complete payment of the dues by 30.01.2016 but the Corporate Debtor failed to
comply with the assurances made to the Applicant. On 17.11.2016, the bank
guarantees were invoked to the tune of Rs.7 crore by the beneficiary, i.e. SICOM
Limited and accordingly the Applicant paid Rs.,7 crore to the beneficiary. The
Applicant vide its letter dated 29.11.2016, demanded the said amount from the
Corporate Debtor, which remains unpaid till date, resulting in accumulation of
huge outstanding. As on 01.03.2017, a sum of Rs.7,26,47,146/-(Rs.7,00,00,000/-
+ Rs.26,47,146/-) towards the principal and interest is outstanding which is
payable by the Corporate Debtor. Later on, the Applicant made correspondence
with the Corporate Debtor regarding the repayment of loans and failing which
recalled all the loan facilities granted to the Corporate Debtor and further called
upon it to make the payment of Rs.7,16,46,626/- along with future interest from
23.01.2017. The applicant through its Advocate called upon the Corporate Debtor
to make the payment of Rs.7,16,46,626/- alongwith future interest. But despite
the said Demand Notice, no payment has been made by the Corporate Debtor.
However, in spite of all efforts taken by the Applicant, the Corporate Debtor has
not responded to make the payment. Therefore, the applicant has submitted this
application in the prescribed Form-1.
In the circumstances, the applicant/Financial Creditor has filed this application to
initiate Corporate Insolvency Resolution Process under the Insolvency &
Bankruptcy Code, 2016. The application is supported by an affidavit of Ms. Monica
Gupta, who is the Assistant Vice President in the applicant company RBL Bank
Limited and she is authorised by the said company to present this petition on this
behalf.
On the basis of documents attached with the application and all the
correspondences with the Corporate Debtor and demand notices, it appears that
Corporate Debtor has committed default in making payment of credit facilities
and credit facilities were extended to the tune of Rs.7,00,00,000/- and charge
was created by way of hypothecation of assets. The applicant has filed the
application under section 7 of the IBC, 2016 and has proposed the name of Mr.
Atanu Mukherjee as Interim Resolution Professional whose address is mentioned
as below.
Mr. Atanu Mukherjee, Advocate
54, Lawyers Chamber,
Supreme Court of India, Delhi- 110 002
Email- atanumukherjea@gmaii.com
Registration No.IBBill PA-002/IP-00088/2016-2017/1115.
The consent letter of the Interim Resolution Professional is attached as Annexure
A-11 with the petition. Smt. Monica Gupta, who has represented this petition on
behalf of the petitioner company, has certified that Mr. Atanu Mukherjee is fully
Insolvency & Bankruptcy Code, 2016.
In this context, it is observed that the Corporate Debtor has written a letter dated
27.12.2016 regarding Loan Recall Notice and Bank Guarantee. They have
submitted that without any reason suddenly RBL Bank Limited opted out of the
Consortium and the enhanced facilities were not disbursed causing cash crunch
and financial difficulties to the company and resultantly caused damages to the
Corporate Debtor by sending damaging communication verbally as well by mail
to the Consortium of banks which resulted in further cash crunch to the company.
The Corporate Debtor vide above letter further submitted that the credit facilities
were used in terms of the consortium arrangement and all the bank accounts
were regular. In fact, despite breach of contract by unilaterally opting out of the
consortium by RBL Bank Limited, the fund based facilities were fully paid off and
the non-fund based facilities were reduced to only Rs.7 crores.
and

section 16.
14. Moratorium.
moratorium period.
regulator.
by the Company.
We hereby appoint Mr. Atanu Mukherjee, Advocate as Interim Resolution
Professional. On the basis of records available with the applicant, it appears that
the Corporate Debtor has committed default in making payment of the loans
amounting to Rs.7 crores and interest of Rs.26,47,146/-. The above order may be
communicated to the Financial Creditor and the Corporate Debtor.
Corporate Insolvency Resolution Process and declare a moratorium and public
announcement as stated in section 13 of the IBC, 2016. Necessary public
announcement as per section 15 of the IBC 2016 may be made by the applicant
company. Shri Atanu Mukherjee is hereby appointed as Interim Resolution
Professional. He will initiate the process as per Rules.
List the matter on 18.4.2017 for further orders.
Signed on this 30th day of March, 2017
REI AGRO CORPORATION LIMITED

Name of the Corporate Debtor REI Agro Corporation Limited
Name of Operational Creditor/ Mr. Surendra Kumar Joshi

Applicant


1. Mr. Surendra Kumar Joshi (“Operational Creditor” or “OC”) filed the
application under section 9 of the Code on the basis of amount claimed to
be in default against M/s REI Agro Limited (“Corporate Debtor” or “CD”)
2. CD was incorporated on 14.09.1994 and has been registered in the Ministry
of Corporate Affairs, Registrar of Companies (ROC) - West Bengal.
3. The OC has filed the application in regard to following defaults:
i. Salary for August 2016 i.e. Rs. 60,650/-
ii. Bonus of Rs. 47,690/- from 10.10.15 to 31.08.2016
iii. Gratuity of Rs. 8,64,408/- from 1.04.1993 to 31.08.16
Thus, the total amount in default as on 31.08.2016 amounted to Rs.
10,20,437/- with respect to the OC.
4. CD in its letter dated 11.09.2016 also acknowledged the debt of Rs.
10,20,437/-
5. The OC had also given a demand notice on 25.01.2017 demanding
payment of unpaid operational debt. In reply thereto, CD vide letter dated
06.02.2017 stated that the CD was suffering badly from the financial crises
due to various reasons which has resulted in erosion of company’s net
worth.
6. The CD stated that it was referred to BIFR but the reference pending before
the BIFR was abated and thus the chance of the CD to revive under SICA
was jeopardised. However, the CD requested for some breathing time
and sought to revive itself under the guidance of Adjudicating Authority

under the Code.

A. In view of the above circumstances, the Bench admitted the petition to
initiate the corporate insolvency resolution process and passed the
following order
i. Declared moratorium under section 14 of the Code
ii. Directed causing of public announcement as per section 13 of the
Code
iii. Appointed Mr. Anil Aggarwal as Interim Resolution Professional.

KOLKATA BENCH
KOLKATA
CORAM :
Shri Vijai Pratap Singh Hon'ble Member (J)
In the matter of :
And
In the matter of:
Application by Operational Creditor to initiate Corporate Insolvency Resolution
Process under Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating
Authority) Rules, 2016;
And
In the matter of:
Surendra Kumar Joshi
74, Burtolla Street, 2nd Chowk,
1st floor, Kolkata 700 007
....Operational Creditor/Applicant
And
In the matter of :
Rei Agro Limited
'Everest House', 46C, Chowringhee Road,
15th floor, Room no.15B, Kolkata 700 071
... Corporate Debtor
Counsels on Record:
1. Mr. Jishnu Chowdhury, Advocate
2. Ms. Swapna Choubey, Advocate For the Applicant
3. Mr. Sidhartha Sharma, Advocate
4. Ms. Namrata Basu, Advocate
1. Ms. Meenakshi Manot, Advocate For the Respondent
ORDER
This Company Petition has been filed by Operational Creditor, Mr.Surendra Kumar
Joshi, supported by an affidavit to initiate Corporate Insolvency Resolution Process
in respect of REI Agro Limited under the Insolvency and Bankruptcy Code, 2016.
The application has been submitted in form 5 as provided under the Insolvency
and Bankruptcy Code 2016. The applicant has stated in the application that he
has preferred this application on the basis of amount claimed to be in default and
the workings for computation of default are (1) Salary for August 2016 Rs.60,650/
-, (2) Bonus from 1.10.15 to 31.08.2016 Rs.47,690/-, (3) Leave from 1.10.15 to 31.08.16
Rs.47,690/-(4) Gratuity from 01.04.1993 to 31.08.2016 - Rs.8,64,408/-, total amount
due being Rs.10,20,437/- from the Operational Debtor and date of default being
31.08.2016. It has been stated in the application that the corporate debtor is in
default of about Rs.10,20,437/- with respect to operational creditor which is at
Annexure-5 (page 35) of the application. The particulars of the operational Debtor
are mentioned in Part-IV of the application.
In this context, the applicant has given demand notice on 25.01.2017 in form no.3
under clause (a) of sub-rule (1) of rule 5 to the operational debtor demanding
payment of an unpaid operational debt amounting to Rs.10,20,437/, which is at
Annexure-4 with the application. The applicant has also issued Form of notice
dated 25th January, 2017 with which invoice demanding payment is to be attached
in Form no.4 (page no.32 of the application) to the operational debtor. The
operational debtor, i.e. REI Agro Limited vide their letter dated 11.09.2016 has also
acknowledged the debt of Rs.10,20,437/- to be paid to the applicant which is at
Annexure 1 (page 9) of the application.
In response to the demand notice dated 25th January, 2017 given by the applicant,
the operational creditor vide their letter dated February 6, 2017 has written to the
applicant that the company is badly suffering from financial crisis and due to
various reasons, it has resulted in erosion of the company's net worth and has
been referred to BIFR and the reference pending before the BIFR has been abated
and revival of the corporate debtor under the relevant provision of SICA Act has
been jeopardised and everything is at standstill. However, in consultation with
the company's legal advisors, the company is seeking their guidance to revive
the company under the guidance of the Adjudicating Authority under the IBC,
2016. Finally, they sought some breathing time and assured the operational creditor
that the payment of all dues will be made.

and
section 16.
14. Moratorium.
authority;
(d) the recovery of any property by an owner or lessor where
such property is occupied by or in the possession of the corporate debtor.
moratorium period.
date of such approval or liquidation order, as the case may be. "
by the Operational Creditor.
The applicant has also proposed to appoint Mr. Anil Agarwal, FCA to be appointed
as Interim Resolution Professional and subm'Itting a resolution plan to NCLT as
required under the IBC Act. In accordance with rule 9 of the Insolvency and
Bankruptcy (Application to Adjudicating Authority) Rules, 2016, Mr. Anil Agarwal
has submitted his consent as stipulated in Form-2 of the NCLT Rules. The details
and registration number of I.R.P. given in the Petition, are as under:
Mr. Anil Agarwal
Chartered Accountants,
9, Binoba Bhave Road, Flat no.2G,
Behala, Kolkata 700 038
anil@dvaonfine.in
Regn. No.I BBI/IPA-001 /I P-00621 /2016-2017/1372
The applicant/petitioner has also certified the fact that Mr. Anil Agarwal is fully
qualified and permitted to act as an Interim Resolution Professional in accordance
with Code and the Associated Rules and Regulations.
accepted and Mr. Anil Agarwal is hereby appointed as Interim Resolution
Professional. He will initiate the process as per the Rules.
Urgent copy of the order may be issued upon compliance of all necessary
formalities.
List the matter on 03/03/2017 for further orders.
Signed on this 27th the day of February, 2017
SREE METALIKS LIMITED

Name of the Corporate Debtor Sree Metaliks Limited
Name of Financial Creditor/ Srei Equipment Finance Ltd.
Applicant


1. Sree Metaliks Limited (“Corporate Debtor” or “CD”) was incorporated on
28.11.1995 as a Public Limited Company.
2. Srei Equipment Finance Ltd., (“Financial Creditor” or “FC”), is a Non-Banking
Financial Company engaged in the business of equipment financing.
3. FC, in the course of its business of lending, extended financial assistance
of Rs. 108.26 crores in the form of loan to CD vide various loan agreements.
4. Since the CD failed to repay the loan amount, the FC terminated the loan
agreement and obtained an award in its favour in view of arbitration
clause in the loan agreement.
5. In the above circumstances, FC filed the present application.

A. The Bench observed that considering the records available with the FC, it
appears that the CD had committed default in payment of loan amount of
Rs. 108.26 crores.
B. The Bench passed the following order:
i. Admitted the application.
ii. Appointed Shri Vinod Kumar Kothari as the Interim Resolution
Professional (IRP).
iii. Declared Moratorium in terms of Section 14 of the Code.
iv. Directed making of necessary Public Announcement under Section

13 of the Code.
Subsequent Developments
- The CD challenged the order dated 30.01.2017 passed by the Bench before
the NCLAT where, the CD, during the arguments submitted that the CD
had no objection to the admission of Insolvency applicaiton if the IRP
appointed by the Bench was changed which was agreed by the FC.
Accordingly, the appeal was disposed off vide order dated 21.02.2017.
- Thereafter, vide order dated 24.02.207, the Bench appointed Shri S. M.
Gupta as the IRP to chair the meeting of Committee of Creditors to be held
on 27.02.2017.
- Vide order 09.03.2017, it transpired that the Committee of Creditors had
not agreed to the appointment of IRP (Shri S. M. Gupta) as the Insolvency
Professional and accordingly, Shri Kuldeep Verma was appointed as the
IP.
- In the meanwhile, CD also approached the Hon’ble High Court of Calcutta
by way of Writ Petition (Civil) No. 7144 of 2017 assailing the vires of section
7 of the Code on the ground that the Code does not afford any opportunity
of hearing to a CD in the application filed under section 7 of the Code and
thus, violates the principles of natural justice.
The Hon’ble High Court, vide its judgment dated 07.07.2017, even though
rejected the challenge to the vires of section 7 of IBC, yet, it held that, since
a proceeding for declaration of insolvency of a company has drastic
consequences for a company and may end up in its liquidation, therefore,
when NCLT receives an application under section 7 of the Code, it must
afford a reasonable opportunity of hearing to the CD as section 424 of the
Companies Act, 2013 mandates it to ascertain the existence of default as
claimed by FC and NCLT is thus obliged to afford a reasonable opportunity
to CD to contest claim of default by filing written objection or other
documents as NCLT may direct and must provide reasonable opportunity
of hearing to CD prior to admitting the application under section 7 of the
Code.
Court-II
KOLKATA BENCH
KOLKATA
C.P. No. 16 / 2017
Present: 1. Hon'ble Member (3) Shri Vijai Pratap Singh
2. Hon'ble Member (T) Shri S. Vijayaraghavan
ATTENDANCE-CUM-ORDER SHEET OF THE HEARING ON 24th February, 2017, 10.30
A.M
Name of the Company Shree Equipment Finance Ltd.
-Versus-
Shree Metaliks Ltd. & Ors.
Under Section 7 Insolvency

Sl. Name & Designation of Authorized Appearing on behalf of Signature with
No. Representative (IN CAPITAL date
LETTERS)
Nittu Poddar, PCS Applicant, Shri Equipment 24.2.2017

Financie Ltd.
ORDER
Ld. Pr. CS for the applicant mentioned the matter today.

The Pr. CS of the petitioner has given a copy of Hon'ble National Company Law
Appellate Tribunal's order in C.A. (AT) (Insolvency) No. 3 of 2017 wherein it was
stated that respondents will provide another name of IRP who will function during
the rest of the period and as may be ordered by the NCLT. The Pr. CS for the
petitioner has stated that Committee of Creditors is desirous of appointing Interim
Resolution Professional in this case and have suggested the name of of Sri S. M.
Gupta, who is a registered IRP under Registration No. IBBI/IPA-002/IP-00137/
2016-17/1200 and he has given his consent in terms of Insolvency and Bankruptcy
(Application to Adjudicating Authority) Rules, 2016 and submitted Form 2 of the
Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.
In view of the urgency of the petitioner as the Committee of Creditors shall meet
on 27/02/2017 Sri S.M. Gupta is appointed as Interim Resolution Professional
and he will act as an interim IRP for conducting the meeting of the Committee of
Creditors, i.e., scheduled to be held on 27/02/2017. He will be assisted by the

erstwhile IRP Shri Vinod Kr. Kothari who will make available all necessary
documents to enable Shri S.M.Gupta, Pr. CS, who will be chairman of the
Committee of the Creditors which may also nominate Resolution Professional for
carrying out further proceedings under this petition.
Urgent photo copy of the order may be provided, if applied for, subject to
compliance.with all necessary formalities.
NICCO CORPORATION LIMITED

Name of the Corporate Debtor/ NICCO Corporation Limited
Applicant

Amount Involved Rs. 405 crores

1. With the coming into force of the Sick Industrial Companies (Special
Provisions) Repeal Act, 2003 and consequent dissolution of BIFR, NICCO
Corporation Limited (“Corporate Debtor” or “CD”), filed a reference under
section 10 of the Code for initiation of Corporate Insolvency Process in
terms of Eighth Schedule to the Code within 180 days of the
commencement of the IBC.
2. It was stated in the reference that the CD is in default of about Rs. 320.42
crores with respect to the financial creditors and about Rs. 84.58 crores
with respect to operational creditors totalling to more than Rs. 405 crores.
The application was duly accompanied by list of creditors and the amount
of default committed with respect to the amount due.
3. The CD had been making loss, as could be seen from the Annual Accounts
for the FY 2014-15 on account of its operation. For the FY 2015-16, there
were accumulated losses of Rs. 26,646.52 lakhs as compared to Rs.
21,081.02 lakhs at the end of March, 2015. Further, the CD was having
negative cash flow for the financial year ended 31.03.2016.

A. The Bench, taking note of the above defaults, list of creditors and losses
incurred by CD, observed that the figures revealed that there is little
possibility of the company paying back the principal amount of
borrowing in its entirety as well as the interest accrued thereupon
from its operations.
order:
i. Appointed Mr. Kunal Banerjee as the Interim Resolution Professional

(IRP).
ii. Declared Moratorium in terms of Section 14 of the Code.
13 of the Code.

KOLKATA BENCH
KOLKATA
CORAM :
Shri V. P. Singh Hon'ble Member (J)
In the matter of :
And
In the matter of:
Nicco Corporation Limited,
an existing company within the meaning of the Companies Act, 2013 and
having its registered office at Nicco House, 2, Hare Street, Kolkata- 700 001
.....Petitioner
Counsels on Record:
1. Mr. Jishnu Chowdhury
2. Mr . Rahul Auddy for the petitioner
Date of the hearing 16.01.2017
ORDER
This Company Petition has been filed by Corporate Debtor M/s. Nicco Corporation
Ltd. supported by an affidavit to initiate Corporate Insolvency Resolution Process.
The application has been submitted in form 6 as provided under the Insolvency
and Bankruptcy Code 2016. The applicant has stated in the application that he
has given this application on the basis of Resolution passed by Board of Directors
dated 16.12.2016 to initiate Corporate Insolvency Resolution Process before the
NCLT. The applicant has also filed the copy of Board Resolution as Annexure-Ill.
The applicant has also submitted a detailed note before the BIFR in Annexure-IV,
wherein it is mentioned that as per proviso to section 4 of SICA Repeal Act,
company in respect of which such reference stands abated may make a reference
to the NCLT under the Insolvency and Bankruptcy Code 2016 within 180 days from
thecommencement of the Insolvency and Bankruptcy Code 2016. It has been
stated in the application that reference made to the BIFR in view of the proviso to
section 4 of SICA Repeal Act stands abated and he is at liberty to submit application
within 180 days from the commencement of Insolvency and Bankruptcy Code
2016 to NCLT, The applicant has also submitted a list of financial creditors and
operational creditor which is annexure 5A and 5B respectively. It has been stated
in the application that the company is in default of about Rs.320.42 crores with
respect to financial creditors. The particulars of the financial creditors and
operational creditors is given in the table below including secured and unsecured
creditors.
Financial Year 2015-16
Financial Creditor - Rs.3,204,198,192
Operational Creditor - Rs. 845,851,105
Total - Rs.4,050,049,297
Company has also been making loss as could be seen from the balance-sheet
2014-15 on account of its operation. Accumulated losses at the end of the financial
year 2015-16 also shows accumulated loss of Rs.26,646.52 lakhs compared to
Rs.21,081.02 lakhs at the end of March, 2015. The company is having a negative
cash flow for the year ended 31.03.2016 and also in the financial year ended
31.03.2015. The applicant has also given a list of creditors regarding the default
committed with respect to amount due to the creditors (both financial as well as
operational creditors), as required under section 10 of the IBC, 2016. The figures
reveal that there is little possibility of the company paying back the principal
amount of borrowings in its entirety as well as the interest accrued thereupon
from operations of the company In the circumstances mentioned above, we
admit the petition for initiating the Corporate Resolution Process and declare a
moratorium and public announcement as stated in section 13 of IBC 2016. The
relevant sections 13 and 14 are reproduced below for the purpose of convenience
and
section 16.
14. Moratorium.
moratorium period.
regulator.
by the Company.
Company has also resolved to appoint Mr. Kunal Banerjee, Cost Accountant to be
appointed as Interim Resolution Professional and submitting a resolution plan to
NCLT as required under the IBC Act which is at Annexure- III of the application.
Shri Kunal Banerjee has submitted his consent as stipulated in Form-2 of the
NCLT Rules. The details and registration number given in Petition, is as follows:
Mr. Kunal Banerjee
Shome & Banerjee
5A, Nurulla Doctor Lane,
2nd floor, Kolkata - 700 017
banerjee.kunal(a)gmail.com
I B B I /I PA-03/2016-17/ 12
The applicant/petitioner has also certified the fact that Mr. Kunal Banerjee is fully
Code and the Associated Rules and Regulations
accepted and Shri Kunal Banerjee, is hereby appointed as Interim Resolution
Professional. He will initiate the process as per the Rules aQ4 kst the matter on
24.01.2017 for further orders.
Signed on this 18th day of January, 2017
MUMBAI BENCH 363
MUMBAI BENCH
MUMBAI BENCH 365
HDO TECHNOLOGIES LIMITED
Name of the Corporate Debtor HDO Technologies Limited
Name of Financial Bank Of India

Creditor/Applicant
Company Petition No. 720/I&BP/NCLT/MAH/2017
Bench NCLT, Mumbai Bench

Amount Involved Rs. 162,31,99,387


1. Bank Of India (“Financial Creditor” or “FC”) had sanctioned credit facilities
to the extent of Rs. 147.44 crores in the form of working capital loan,
funded interest term loan(FITL) on working capital term loan(WCTL), cash
credit and non-fund based facilities on August 06, 2014 to HDO
Technologies Limited(“Corporate Debtor” or “CD”).
2. The sanction letter provided for the repayment of working capital term
loan in 24 quarterly instalments beginning from the quarter March, 2014
and ending in quarter December 2019, repayment of FITL on WCTL in 10
equal quarterly instalments commencing from quarter March, 2014 and
ending in quarter June, 2016.
3. The statement of accounts produced by the FC in respect of CD revealed
that the account of CD was classified as non-performing asset (NPA) on
December 31, 2014.
4. The FC sent a letter to the CD on April 11, 2017 disclosing the total
outstanding amount and the assets pledged as collateral security as on
March 31, 2017 indicating that the account was classified as non-
performing asset since October 01, 2013.
5. The CD acknowledged and confirmed the letter and conceded to the
initiation of Corporate Insolvency Resolution Process (CIRP).
6. The FC proposed the name of Mr. Amit Gupta as Interim Resolution
365

A. The bench, on perusal of the documents filed by the FC observed that CD
had committed a default in making payment.
orders:
i. Appointed Mr. Amit Gupta as Interim Resolution Professional.
Code which shall have effect from 28.04.2017 till the completion of
the corporate insolvency resolution process or until the resolution
plan is approved by Bench or until a liquidation order is passed.
iii. Directed causing of public announcement of corporate insolvency
resolution process to be made immediately under section 13 of
Code.
MUMBAI BENCH 367
BEFORE THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI

BENCH, MUMBAI
C.P. NO. 720/I&BP/NCLT/MAH/2017
Coram: B. S. V. Prakash Kumar, Member (Judicial)
V. Nallasenapathy, Member (Technical)
In the matter of under Section 7 of the Insolvency and Bankruptcy Code, 2016 and
Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority),
Rule 2016)
1. Bank of India
Star House, C-5, "G" Block,
Bandra Kurla Complex Bandra East
Mumbai - 400 051
... Applicants/Financial Creditor
2. HDO Technologies Limited
Door-Oliver House
Link Road Chakala Andheri East
Mumbai - 400 099
Counsel for the Financial Creditor: Mr. Himanshu Vidhani, Advocate i/b Khaitan &
Co.
Counsel for the Corporate Debtor: Mr. Raj Mehta, Advocate, i/b RKM Legal Services.
ORDER
(Heard Pronounced on 28-04-2017)
Per V Nallasenapathy, Member (Technical)

This is an insolvency and bankruptcy Petition for initiation of insolvency resolution
process by a financial creditor Bank of India, Andheri Large Corporate Branch,
Mumbai - 51 against the corporate debtor HDO Technologies Limited on the
ground that the corporate debtor has defaulted in making payment for the various
credit facilities sanctioned by the bank to the extent of Rs.162,31,99,387 as on 31-
03-2017.
2. The financial creditor has stated that on 06-08-2014 it has sanctioned credit
facilities to the extent of Rs.147.44 crores, the break up being working capital term
loan Rs.41.56 crores, Funded Interest Term Loan (FITL) on Working Capital Term
Loan (WCTL) 2.08 crores, cash credit 30 crores, LC 24 crores and bank guarantee
49.80 crores. The sanction letter indicates that the working capital term loan is
repayable in 24 quarterly instalments after the Moratorium period of 12 months
from cut-off date i.e. 12 months from 31-12-2012. The total tenure of the loan is 7
years i.e. one year Moratorium and 6 years of repayment and accordingly the
instalment starts from the quarter March 2014 and ending in quarter December
2019. It further provides that the FITL shall be repayable in 10 equal quarterly
instalments after moratorium period of 12 months from cut off date i.e. 12 months
from 31-12-2012, thus commencing from quarter March 2014 and ending quarter
June 2016. The statement of account produced by the financial creditor reveals
that the account of corporate debtor was classified as non-performing asset on
31-12-2014. The financial creditor has sent a letter dated 11-04-2017 addressed
to the corporate debtor disclosing the position of account as on 31-03-2017 and
sought for the acknowledgement of balance wherein the corporate debtor has
confirmed the position of account as on 31-03-2017.
3. The financial creditor on 03-04-2017 sent a letter to the corporate debtor
stating the position of the account as on 31-03-2017 disclosing the sanctioned
limit, principal outstanding as on 31-03-2017 and interest up to 31-12-2014,
uncharged interest from 01-01-2015 to 31-03-2017 and the total outstanding
indicating that the account is classified as non-performing asset since 01-10¬2013.
Further, it discloses various assets that were given as principal security and
collateral security in favour of the financial creditor. The said letter was
acknowledged and confirmed by the corporate debtor.
4. The counsel appearing on behalf of the corporate debtor states that his client
concedes initiation of the Insolvency Resolution Process.
5. As to the Petition filed by the Financial Creditor, this Bench, on perusal of this
documents filed by the Creditor, observed that the Corporate Debtor defaulted in
making payments and the Financial Creditor placed the name of the Insolvency
Resolution Professional to act as Interim Resolution Professional, having this
Bench noticed that default has occurred and there is no disciplinary proceedings
pending against the proposed resolution professional, therefore the Application
under sub-section (2) of section 7 is taken as complete, accordingly this Bench
hereby admits this Application declaring Moratorium with the directions as
mentioned below:
(a) That this Bench hereby prohibits the institution of suits or continuation of
MUMBAI BENCH 369

(b) That the supply of essential goods or services to the corporate debtor, if
moratorium period.
(c) That the provisions of sub-section (1) of Section 14 shall not apply to such
(d) That the order of moratorium shall have effect from 28.04.2017 till the
passes an order for liquidation of corporate debtor under section 33, as
the case may be.
(e) That the public announcement of the corporate insolvency resolution
Code.
(f) That this Bench hereby appoints Mr. Amit Gupta, A/701, Gundecha
Symphony, Veera Desai Road, Andheri West, Mumbai - 400 053, email:
caamith.gupta@gmail.com, Registration No. IBBI/IPA- 001 /IP-P00016/
2016-17/10040 as interim resolution professional to carry the functions as
mentioned under Insolvency & Bankruptcy Code.
6. Accordingly, this Application is admitted.
7. The Registry is hereby directed to communicate this order to the Financial
sd/ sd/-
V. NALLASENAPATHY B. S. V. PRAKASH fcUMAR
LOHA ISPAAT LIMITED
Name of the Corporate Debtor Loha Ispaat Limited
Name of Operational Dilip M. Rathod

Creditor/Applicant


Amount Involved Rs. 6,78,55,132 along with interest @ 18%
p.a. on Rs. 5,43,83,208

1. The operational creditor (“OC”) Mr. Dilip M. Rathod (proprietor of Bright
Steel Processors) had filed the petition claiming that Lohaa Ispaat Limited
(“Corporate Debtor” or “CD”) had defaulted in repaying a sum of
Rs.6,78,55,132 and interest @ 18% p.a. on the principal sum of Rs.
5,43,83,208.
2. The OC had enclosed the copies of purchase orders, invoices, delivery
notes and balance confirmation by the CD in support of his claim.
3. The OC also enclosed its account statements maintained with Dombivali
Nagar Sahkari Bank Limited, Dadar branch for the period from 18-04-2015
to 13-04-2017 wherein it was disclosed that a sum of Rs. 17,50,000 was
received from CD.
4. The OC also sent a demand notice on January 04, 2017 to the corporate
debtor calling upon it to pay a sum of Rs. 6,78,55,132 along with the
interest @ 18% p. a. on the principal sum of Rs. 5,43,83,208 to which no
reply was sent by the CD.
5. The CD also conceded to the initiation of Corporate Insolvency Resolution
Process (CIRP).
6. The CD proposed the name of Mr. Amit Gupta as Interim Resolution
MUMBAI BENCH 371

A. The bench, on perusal of the petition filed by the OC observed that there is
a debt as defined in Section 3(11) of the Code and a default as defined in
orders:
Code.

BENCH, MUMBAI
C.P. NO. 724/1 & BP/NCLT/MAH/2017
Coram: B. S.V. Prakash Kumar, Member (Judicial)
Rules 2016.
1. Dilip M. Rathod
Proprietor of Bright Steel Processors
501, Shiv Parvati,
Cabin No.8,14th Road,Khar West,
Mumbai - 400 052
... Applicant/Operational Creditor
2. Loha Ispaat Ltd.
S.No.2/4/5 & OTH Village
Ransai Khopoli Pen Road
Taluka Khalapur
District Raigad - 410 203
Counsel for the Financial Creditor: Mr. Kunal Parekh
Counsel for the Corporate Debtor: Mr. Jayesh Gawde
ORDER
(Heard and pronounced on 28-04-2017)
Per V. Nallasenapathy, Member (Technical)

1. The Operational Creditor namely Mr. Dilip M. Rathod, Proprietor of Bright Steel
Processors, has filed this Operational Creditor Petition stating that the Corporate
Debtor Company, Lohaa Ispat Ltd. has defaulted in repaying a sum of
Rs.6,78,55,132 as on 31-03-2016 and also stated that he is entitled to realize the
said amount along with interest @ 18% on the principal sum of Rs.5,43,83,208
and hence filed this Petition under Section 9 of the I&BP Code r/w Rule 6 of
Insolvency and Bankruptcy (Application to adjudicating authority) Rules, 2016 for
initiation of Corporate Insolvency Resolution process.
2. The operational creditor has enclosed the copies of Purchase Orders, invoices
MUMBAI BENCH 373
and delivery notes in support of his claim. Further he has enclosed the confirmation
of balance by the corporate debtor and as on 31st March 2017 a sum of
Rs.6,78,55,132.21 is the balance confirmed/acknowledged by the corporate debtor.
The operational creditor enclosed its accounts statement with Dombivali Nagar
Sahakari Bank Limited, Dadar Branch for the period from 18-04-2015 to 13-04-
2017, wherein it was disclosed that on 03-02-2016 a sum of Rs. 17,50,000 was
received from the corporate debtor. The operational creditor sent a demand
notice on 04-01-2017 to the corporate debtor calling upon to pay within 15 days of
receipt of the letter, a sum of Rs.6,78,55,132 due as on 31-03-2016 with interest @
18% p.a. on the principal balance sum till the date of payment, failing which
appropriate legal proceedings will be initiated. The corporate debtor has not
responded to the said notice.
4. This Petition clearly reveals that there is a debt as defined in Section 3(11) of I&B
Code 2016, also there is default in this case within the meaning of Section 3(12) of
I&B Code, 2016 and the corporate debtor having named the Interim Resolution
Professional with his consent, there being no disciplinary proceedings against,
this Bench hereby admits this petition filed under Section 9 of I & B Code, 2016,
declaring moratorium with consequential directions as mentioned below:
(a) That this Bench hereby prohibits the institution of suits or continuation of
(b) That the supply of essential goods or services to the corporate debtor, if
moratorium period.
(c) That the provisions of sub-section (1) of Section 14 shall not apply to such
(d) That the order of moratorium shall have effect from 28-04-2017 till the

the case may be.
(e) That the public announcement of the corporate insolvency resolution
Code.
(f) That this Bench hereby appoints Mr. Amit Gupta, Registration No. IBBI/IPA-
001 /IP-P00016/2016-17/10040, A/701, Gundecha Symphony, Veera Desai
Road, Andheri West, Mumbai 400 053, email: caamith.gupta@gmail.com
as Interim Resolution Professional to carry the functions as mentioned
under Insolvency & Bankruptcy Code.
5. Accordingly, this Petition is admitted.
Sd/ Sd/-
V. NALLASENAPATHY B. S. V. PRAKASH KUMAR
MUMBAI BENCH 375
NEELKANTH TOWNSHIP AND CONSTRUCTIONS PVT. LTD.
Name of the Corporate Neelkanth Township and Constructions

Debtor/Applicant Pvt. Ltd.
Name of the Financial Urban Infrastructure Trustee Limited

Creditor/Applicant
Company Petition No. CP No. 69/I&BP/NCLT/MAH/2017

Amount involved Rs. 51 Crores

1. Urban Infrastructure Trustee Limited (“Financial Creditor” or “FC”) had filed
the application earlier vide CP/21/I&BP/2017 whereas the Bench
dismissed the application due to variation between claim amount and
the default amount with a liberty to the FC to file fresh petition restricting its
claim to Rs. 51 Crores for which record is available showing Neelkanth
Township and Construction Pvt. Ltd. (“Corporate Debtor” or “CD”) defaulted
in redeeming the debentures as agreed.
2. The FC has filed fresh application limiting its claim to Rs. 51 Crores. Now
the present application is filed stating that the CD, in consideration to the
debt of Rs. 51 Crores given by the FC, issued certificate dated 26.12.2007
comprising of 1,27,000 zero percent optionally fully convertible debentures
of Rs. 100 each of aggregate value of Rs. 1,27,000; certificate dated
15.02.2008 comprising of 1,24,000 zero percent optionally fully convertible
debentures (OFCDs) of Rs. 100 each of the aggregate value of Rs.
1,24,00,000; and another certificate dated 30.03.2009 comprising of
48,49,000 one percent optionally fully convertible debentures of Rs. 100
each of the aggregate value of Rs. 48,49,00,000, with terms and conditions
in respect of rate of interest, conversion, redemption, payment of
debentures on the back of each of the certificates stating as regards the
debenture certificate for Rs. 1,27,000 debentures they shall be redeemed
within 60 months from the date of allotment (i.e. 25.12.2012) as regards
the debenture certificate for Rs. 1, 24,000 debentures, they shall be
redeemed within 60 moths from the date of allotment (i.e.14.02.2013 and
as regards 48, 49,000 debentures, they shall be redeemed on April 30,

2011 with a redemption premium on the date of maturity.
3. The CD has defaulted in respect of the above said OFCDs and the same is
acknowledged in the Balance Sheet of the CD. The CD raised objections
for admission on various grounds such as no evidence of proof of default,
non-payment of sufficient stamp duty, debt being time barred etc.

A. The Bench while admitting the petition discussed the following:
i. Whether enough evidence as mandated u/s 7 of the Code has
been placed;
ii. Whether deficiency of stamp duty will invalidate the debenture
certificate;
iii. Whether the debt is time barred;
iv. Whether the pendency of arbitration proceedings between parties
will have bearing on adjudication of this application
v. Whether the applicant can file the application as FC as he is also
one of the shareholders of the company.
B. Whether enough evidence as mandated under Section 7 has been placed.
(a) The Bench analysed that three kinds of documents are required to
prove default:
– Information Utility records
– Financial contract
– Court order adjudication non payment of debt.
(b) The FC has produced the debenture certificate showing financial
contract and the financial statements of the CD reflecting non-
payment.
(c) Hence the records produced by FC is sufficient.
C. Whether deficiency of stamp duty will invalidate debenture certificate?
Since CD is a Private Limited Company and also defaulted in making
repayment after maturity, it cannot be considered as marketable
security and it cannot in anyway be considered as security asking
stamp duty.
D. Whether the debt is time-barred? Since qualification in the Director’s Report
MUMBAI BENCH 377
of CD is covered as acknowledgment of debt. It cannot be treated as time-

barred debt.
E. Whether pendency of arbitration proceeding between parties will take
bearing on adjudication of the application? Since this case is covered u/s
7 of the Code, pendency of Section 21 proceedings under Arbitration Act
will not have any bearing on this case.
F. Will the FC being a shareholder can file this application? There is no legal
bar for FC to be shareholder.
G. The Bench admitted the application and stated that other directions would
follow within 14 days.

BENCH, MUMBAI
Rule 2016)
URBAN INFRASTRUCTURE TRUSTEE LTD. ... Applicant
V/s.
NEELKANTH TOWNSHIP AND CONSTRUCTION PVT. LTD. ..
CORPORATE DEBTOR
Applicant Counsel: Mr. Arif Doctor, Counsel a/w Ms. Nirali Chopra, Advocates for
the Applicant.
Corporate Debtor Counsel: Ms. Chaitrika Patki, Advocates for the Corporate Debtor.
ORDER
(Heard & Pronounced on 21-04-2017)
Per B S V Prakash Kumar Member (Judicial)

This Bench having pronounced the order of admission in the open court after
hearing this Application; the reasons for passing such order are as follows.
2. The financial creditor filed this CP against the corporate debtor, viz.
Neelkanth Township and Construction Pvt. Ltd to initiate Corporate Insolvency
Resolution Process u/s 7 of Insolvency and Bankruptcy Code, 2016 (I&BC)
stating that the corporate debtor defaulted in redeeming the debenture
certificates issued by the corporate debtor on 26.12.2007, 13.2.2008 and
30.3.2009 on the dates of maturity mentioned in the debenture certificates
issued by the corporate debtor.
3. It is pertinent to mention that this financial creditor had filed CP 21/I&BP/2017
seeking the relief as sought now, but whereas this Bench, by looking at the
variation between the claim amount and default amount, dismissed that
application with an observation that application was filed showing claim amount
as Rs.226,16,79,437 basing on the record and information disclosing default for
repayment of principal amount of Rs.51 crores. While dismissing the above
application, this Bench gave liberty to the financial creditor to file fresh application
MUMBAI BENCH 379
restricting its claim to Rs.51 crores to which record is available showing the
corporate debtor defaulted in redeeming the debentures as agreed.
4. In pursuance of the liberty given above, the financial creditor has now filed this
Company Application limiting its claim to Rs.51 crores as against the default
showing in the records placed by the creditor. Now the present Application is
filed stating that corporate debtor, in consideration to the debt of ?51crores given
by the financial creditor, issued certificate dated 26.12.2007 comprising of 1,27,000
zero percent optionally fully convertible debentures of ?100 each of the aggregate
value of Rs.1,27,00,000;certificate dated 15.2.2008 comprising of 1,24,000 zero
percent optionally fully convertible debentures (OFCDs) of Rs.100 each of the
aggregate value of Rs.1,24,00,000; and another certificate dated 30.03.2009
comprising of 48,49,000 one percent optionally fully convertible debentures of
Rs.100 each of the aggregate value of ^48,49,00,000, with terms and conditions
in respect to rate of interest, conversion, redemption, payment of debentures on
the back of each of the certificates stating as regards the debenture certificate for
1,27,000 debentures, they shall be redeemed within 60 months from the date of
allotment (maturity date would be 25.12.2012);as regards the debenture certificate
for 1,24,000 debentures, they shall be redeemed within 60 months from the date
from the date of allotment (maturity date would be 14.02.2013); as regards the
debenture certificate for 48,49,000 debentures, they shall be redeemed on 30th
April 2011 with a redemption premium on the date of maturity. Since the corporate
debtor has defaulted in repayment of the aggregate principal amount of Rs.51c
rorestowards OFCDs on the respective dates of maturity, and for the same being
acknowledged in the balance sheets of the corporate debtor for the financial year
ended 31.03.2012, 31.03.2013, 31.03.2014 and unaudited balance sheets of
financial year ended 31.03.2015 and 31.03.2016 showing that OFCDs has matured
and the same are overdue, the financial creditor filed this company Application
for initiation of Insolvency Resolution Process.
5. The financial creditor further submits that the corporate debtor company has
only three shareholders, i.e., the financial creditor, and two individual promoters,
out of these three; it is this financial creditor, who made 98% of the funding to the
corporate debtor company through these OFCDs subscribed by the financial
creditor.
6. On the application moved by the financial creditor, the corporate debtor raised
objections for admission of this Application on the ground that there is no evidence
of proof to show that the corporate debtor committed default and no record has
been placed to specify the default purported to have been committed. The corporate
debtor further submits that since sufficient stamp duty has not been paid over the
debenture certificates, they cannot be taken into consideration to pass any order
as those certificates have been hit by Section 35 of Indian Stamp Act, 1899. The
corporate debtor has gone further saying that since three years limitation for
seeking remedy basing on debenture certificates is expired since the date of
maturity, this petition is liable to be dismissed. The Corporate Debtor counsel
says that default showing in the Balance Sheets does not amount to
acknowledgment of debt. The counsel appearing on behalf of the corporate
debtor further submits that since this claim has already been disputed under
Section 21 of Arbitration and Conciliation Act, 1996, no order could be passed
simply by looking at the claim made in this application. The last objection of the
corporate debtor counsel is since this applicant has been in a dual capacity as a
shareholder of the debtor company and also as a financial creditor, this financial
creditor cannot make any claim against the debtor company wherein this applicant
itself is continuing as a shareholder.
7. On hearing the submissions of either side, the points for consideration are as
follows:
1. Whether enough evidence as mandated u/s 7 of the Code has been
placed by the applicant for admission of this company Application or not.
2. Whetherdeficiency of stamp duty will invalidate the debenture certificates
or not.
3. Whether the debt is time barred or not.
4. Whether the pendency of arbitration proceeding between the parties will
have any bearing on adjudication of this application or not.
5. Whether the applicant herein can file this application as a financial creditor
when the applicant is continuing as one of the shareholders of the
Company.
Point .1: -Whether enough evidence as mandated u/s 7 of the Code has been
placed by the applicant for admission of this company Application or not
8. It is a fact that the applicant herein subscribed for issuing debenture certificates
mentioned above, on consideration, the corporate debtor issued debenture
certificates on the dates mentioned above and the same has not only been
showing in the debenture certificates placed before this Bench but also in the
Balance Sheets of the debtor company for the years 2012 to 2016 reflecting that
the amounts in respect to the debenture certificates fell overdue. It is not the case
of the corporate debtor company that the debenture certificates have not been
issued and the money against them has not come to the company, and it is also
not the case of the corporate debtor it is not reflecting in the balance sheets of the
corporate debtor company. In the earlier application dismissed with a liberty to
MUMBAI BENCH 381
the applicant to claim for the principal amount, the corporate debtor did not raise
any objection stating that record of default has not been recorded with information
utility and record of evidence of default is not as specified under the Board
Regulations governed by section 240 of this Code.
9. However, the corporate debtor counsel has submitted that an application u/s
7 could be filed only when the record of default is recorded with information utility
or such other record or evidence of default as may be specified. He says that
section 240 sub section 2 (f) envisages that the other record or evidence of default
under clause (a), under any other information under clause (c), of sub section 3 of
section 7 shall be taken into consideration as mentioned in the Regulation-8 of I
& B Board of India (Insolvency Resolution Process for Corporate Persons)
Regulations. In pursuance of the said provision, for there being Regulation 8(2)
saying existence of debt due to the financial creditor has to be proved on the
basis of either on the records available on the information utility or other relevant
documents including (i) a financial contract supported by financial statements as
evidence of the debt, (ii) a record evidencing that the amounts committed by the
financial creditor to the corporate debtor under a facility has been drawn by the
corporate debtor; (iii) financial statements showing that the debt has not been
repaid; or an order of a court or tribunal that has adjudicated upon the non-
payment of a debt, if any, satisfaction under any of the heads is sufficient.
10. In conjunction to the same, the corporate debtor referred rule 4 of I&B (application
to adjudicating authority) Rule 2016 to say that the documents accompanied with
Form-1 shall be as specified in the Insolvency & Bankruptcy Board of India (Insolvency
Resolution Process for Corporate persons) Regulation 2016. He further submits the
use of words "record or evidence of default" appearing in section 7(3)(a) cannot in
any manner be read to mean any other document or any other evidence except as
specified in the Regulations, whereby the procedure laid under the Rules and
Regulations cannot be waived of in granting relief under this section.
11. When this proposition raised by the corporate debtor counsel placed as against
the record of record placed by financial creditor, it is very much evident that the
financial creditor filed debenture certificates issued by the corporate debtor on
receipt of consideration of ?51crores from the financial creditor and also annual
reports for F.Y. 2011-12, 2012-13, 2013-14 and also unaudited annual reports for
the F.Y. 2014-15 and 2015-16 reflecting the corporate debtor company issuing
debenture certificates to the money received thereafter consistently showing the
same in the annual report and also notes of the financial statement stating that
the company failed to make payment to the debenture holder despite the
debentures matured on the respective dates as mentioned above. Therefore, the
corporate debtor counsel cannot now say that record or evidence of default as
specified under the regulation and rules has not been produced.
12. The Regulation 8 only says that the Financial Creditor has to place either the
record available with an information utility or relevant documents including a
financial statement showing evidence of debt and records showing that facility
has been availed by the corporate debtor and also the record showing financial
statement showing that the debt has not been repaid or order of court or tribunal
that has been adjudicated upon the non-payment of the debt. So there are
three kinds of showing is required to prove default, one is recording by the
information utility, since the information utility has not come into existence it
can't be an argument of the corporate debtor that since information utility has
not yet been created, this Bench cannot pass an order. Second option is that this
Bench can pass an order by looking at the financial contract showing the claim
as debt, a record evidencing the amounts committed by the financial creditor to
the corporate debtor under a facility has been drawn by the corporate debtor, if
that evidence is also not available then third option is the financial creditor can
show any court order adjudicating non-payment of a debt. Since these categories
have been disjointed by using the word "or", if the financial creditor is able to
produce any of these three records showing default, then this Bench has
invariably to consider that default of payment of debt has been proved. Here in
this case for the financial creditor has produced the debenture certificate
showing financial contract and thereafter financial statement s of the company
reflecting the payment above mentioned as remained over-due till date of filing
this company application.
13. In view of that evidence let in by the financial creditor, we believe that the
record placed by the financial creditor is sufficient enough to prove that the
corporate debtor has defaulted in repayment of the aggregate principal amount
of ?51 crores to which OCDs have been issued by the corporate debtor.
Point 2: Whether deficiency of stamp duty will invalidate the debenture certificate
or not.
14. Whether argument advanced by the corporate debtor counsel is that the
debenture certificates issued by the Corporate Debtor are not duly stamped as
required under the provisions of the Indian Stamp Act 1899 and/or the
Maharashtra Stamp Act 1985 conferring it as security. To justify this argument, the
corporate debtor counsel relied upon Sahara India Real Estate Corporation Limited
and Others v. Securities and Exchange Board of India and Another (2013) Sec.l to
say that it is a hybrid security as the same is convertible into equity because,
according to the aforesaid case, OFCDs have been characteristics of shares as
well as debentures falling within the definition of securities section 2 (h) of the
SCR Act, which continue to remain debentures till they are converted. Because,
thereby convertible debentures are to be treated as securities marketable.
MUMBAI BENCH 383
15. To this argument, the financial creditor counsel has submitted that debentures,
being a marketable security, they are governed by Indian Stamp Act 1899. It is
true that debentures are marketable security when such security is marketable in
nature, but the corporate debtor being a private limited company, these OCDs are
not marketable security whereby they do not require to be stamped either under
Article 27 of the Schedule I of the Indian Stamp Act or under Section 74 of
Maharashtra Stamp Act.
16. Since it is evident that the corporate debtor company is a private limited
company, for these debentures cannot be transferred like in a public limited
company, these debentures cannot be called as marketable security and since
the corporate debtor company already defaulted in making repayment after
maturity date it can't in any way be considered as a security asking stamp duty.
Hence this Bench has not found any merit in the argument of the Corporate
Debtor counsel on this point.
Point No.3: Whether the debt is time barred or not.
17. The corporate debtor counsel argued because this three debenture certificates
were due for redemption as far back as 2011, 2012 and 2013, since this application
is filed in the year 2017, this claim is ex-facie time barred, hence this Tribunal
ought not entertain or proceed with or decide the same. He further submits that
the purported acknowledgment by the corporate debtor in the Annual Returns is
subject to the qualification contained in the Directors report, which clarified to the
Notes on Account contained in the auditor's report. Since the said
acknowledgement being qualified by the Directors report, it can't be treated as
an admission for extension of limitation basing on section 18 of the Limitation act.
18. Looking at the argument of the corporate debtor counsel, it is clear that it is not
his case that the debenture certificates have not been issued. It is also not his
case that admission of default is not present in the financial statements. The only
twist that is given to that admission is that it is a qualified admission for it has
been mentioned in the director's report that it is in dispute. As to this point it need
not be newly propound to say that the admission appearing gin the financial
statement of the company is an acknowledgement covered by section 18 of the
limitation act, an acknowledgement need not be given to the financial creditor
stating that debt is owed to him. If such debt is shown as due in the financial
statements of the company which are rem in nature, it is to be construed as an
acknowledgement of default. Since there has been express admission that the
company has defaulted in repayment of principal toward the money received by
issuing debenture certificates, this debt cannot be called as time barred debt.
Thereby this bench has not found any merit in the argument taken by the corporate
debtor counsel.
Point No.4: Whether the pendency of arbitration proceeding betiveen the parties
ivill have any bearing on adjudication of this application or not.
19. The corporate debtor counsel argues that section 21 of Arbitration and Conciliation
Act 1996 in relation to the same debentures pending before Hon'ble High court of
Bombay; therefore, the financial creditor cannot raise this dispute before this Bench
on the same issue pending before the Hon'ble High Court of Bombay.
20. Before answering this point, we believe it is pertinent to mention what sections
63 and 231, 238 of the Code are saying. On perusal of these three sections, it is
evident that no civil court shall have jurisdiction in respect of any matter in which
the adjudicating authority is empowered by or under this court to pass any order,
thereby it is clear that pendency of any proceeding before any court will not have
any bearing on the proceedings initiated under this Code provided that dispute is
covered under the respective section of this Code. Since this case is covered u/s
7 of the Code, pendency of section 21 proceedings under Arbitration Act will not
have bearing on this case. Hence, we do not find any merit in the argument
advanced by the corporate debtor counsel.
Point No.5: Whether the applicant herein can file this application as a financial
creditor when the applicant is continuing as one of the shareholders of the Company.
21. Since this court has not said anywhere if the financial creditor happens to be
shareholder as well, the shareholder in the capacity of financial creditor cannot
initiate insolvency resolution process, since it is the case of the financial creditor
that 90% of the funding arisen by the company is only through this claim, this
applicant claim cannot be shut on the ground the applicant continuing as
shareholder. As there is no legal bar against this applicant to make his claim as
a financial creditor, this Bench cannot read into such proposition to deprive the
right of this applicant. Therefore, we do not find any merit in the argument of the
corporate debtor.
22. When a Company is unable to pay the debt or refuse to pay the debt, the
financial creditor or the operational creditor, as the case may be, can initiate
insolvency proceedings since the corporate debtor defaulted in repaying the
debt admittedly showing in the financial statement of the debtor Company, this
application deserves admission.
23. In view of the reasons above, this Bench admitted this petition. The order for
appointment of Insolvency Resolution Professional and other consequential
directions will follow within fourteen days from the date of admission.
Sd/- V. NALLASENAPATHY Member (Technical)
Sd/- B. S.V. PRAKASH AKUMAR Member (Judicial)
MUMBAI BENCH 385
HINDUSTAN DORR-OLIVER LIMITED
Name of the Corporate Debtor Hindustan Dorr-Oliver Limited
Name of Financial Bank of India

Creditor/Applicant



1. Bank Of India (“Financial Creditor” or “FC”) had sanctioned credit facilities
to the extent of Rs. 660.55 crores in the form of working capital loan,
funded interest term loan(FITL), cash credit and non-fund based facilities
on July 15, 2014 to Hindustan Dorr-Oliver Limited(“Corporate Debtor” or
“CD”).
2. The sanction letter provided for the repayment of working capital term
loan in 24 quarterly instalments beginning from the quarter March, 2014
and ending in quarter December 2019, repayment of FITL on WCTL in 10
equal quarterly instalments commencing from quarter March, 2014 and
ending in quarter June, 2016.
3. The statement of accounts produced by the FC in respect of CD revealed
that the account of CD was classified as non-performing asset (NPA).
4. The FC sent a letter to the CD on April 03, 2017 disclosing the total
outstanding amount and the assets pledged as collateral security as on
January 10, 2013.
5. The CD acknowledged and confirmed the letter and conceded to the
initiation of Corporate Insolvency Resolution Process (CIRP).
6. The FC proposed the name of Mr. Amit Gupta as Interim Resolution

A. The bench, on perusal of the documents filed by the FC observed that CD
had committed a default in making payment.
orders:
Code.
MUMBAI BENCH 387

BENCH, MUMBAI
Coram: B.S.V. Prakash Kumar, Member (Judicial)
Rule 2016)
1. Bank of India
Star House, C-5, "G" Block Bandra Kurla Complex Bandra East
Mumbai - 400 051 ... Applicants/Financial Creditor
2. Hindustan Dorr-Oliver Limited
Dorr-Oliver House
Chakala Andheri East
Mumbai - 400 099 ... Corporate Debtor
Counsel for the Financial Creditor: Mr. Himanshu Vidhani and Ms. Sanika
Gokhale, i/b Khaitan & Co.
Counsel for the Corporate Debtor: Mr. Raj Mehta, i/b RKM Legal Services.
ORDER

1. This is an insolvency and bankruptcy Petition for initiation of insolvency resolution
process by a financial creditor, Bank of India, Bandra East, Mumbai-400 051
against the corporate debtor, Hindustan Dorr-Oliver Limited, on the ground that
the corporate debtor has defaulted in making payment of Rs.856,52,57,199 as on
31-03-2017, for the various credit facilities sanctioned by the bank.
2. The financial creditor has stated that on 15-07-2014, it has sanctioned credit
facilities to the extent of Rs. 660.55 crores, the break up being working capital
term loan Rs.152.87 crores, Funded Interest Term Loan (FITL) on Working Capital
Term Loan (WCTL) Rs.8.54 crores, cash credit 104 crores, and non-fund based
facilities such as LC, bill discounting, invoice discounting etc. to the extent of 396
crores. The sanction letter provides for the repayment of working capital term
loan in 24 quarterly instalments after the Moratorium period of 12 months from
cut-off date i.e. 12 months from 31-12-2012, the total tenure of the loan is 7 years
i.e. one year Moratorium and 6 years of repayment and accordingly the instalment
starts from the quarter March 2014 and ending in quarter December 2019. The
repayment schedule for FITL on WCTL is repayable in 10 equal quarterly instalments
after Moratorium period of 12 months from cut-off date i.e. 12 months from 31-12-
2012, the total tenure of the loans shall be of 3.5 years, one year of Moratorium
and 2.5 years of repayment, thus commencing from quarter March 2014 and
ending quarter June 2016. The statement of accounts produced by the financial
creditor in respect of the corporate debtor reveals that the account of the corporate
debtor was classified as non-performing asset on 30-09-2014.
3. The financial creditor on 03-04-2017 sent a letter to the corporate debtor
stating the position of the account disclosing the sanctioned limit, principal
outstanding as on 31-03-2017 and interest up to 31-12-2014, uncharged interest
from 01-01-2015 to 31-03-2017 and the total outstanding indicating that the account
default/cut off/NPA date as 10-01-2013. Further, it discloses various assets that
were given as principal security and collateral security in favour of the financial
creditor. The said letter was acknowledged and confirmed by the corporate debtor.
documents filed by the Financial Creditor, observed that the Corporate Debtor
defaulted in making payment and Financial Creditor placed the name of the
Insolvency Resolution Professional to act as Interim Resolution Professional, having
this Bench noticed that default has occurred and there is no disciplinary
proceedings pending against the proposed resolution professional, therefore
the Application under sub-section (2) of section 7 is taken as complete, accordingly
this Bench hereby admits this Application declaring Moratorium with the directions
as mentioned below:
a. That this Bench hereby prohibits the institution of suits or continuation of
execution of any Judgment, decree or order in any court of law, tribunal,
b. That the supply of essential goods or services to the corporate debtor, if
MUMBAI BENCH 389

moratorium period.
c. That the provisions of sub-section (1) of Section 14 shall not apply to such
d. That the order of moratorium shall have effect from 21.04.2017 till the
the case may be.
e. That the public announcement of the corporate insolvency resolution
Code.
f. That this Bench hereby appoints Mr. Amit Gupta, A/701, Gundecha
Symphony, Veera Desai Road, Andheri West, Mumbai - 400 053, email:
caamith.gupta@gmail.com, Registration No. IBBI/IPA-001/IP- P00016/
2016-17/10040 as interim resolution professional to carry the functions as
6. Accordingly, this Application is admitted.
Sd/- Sd/-
SWIFT SHIPPING AND FREIGHT LOGISTICS PVT.LTD.
Name of the Corporate Swift Shipping and Freight Logistics Pvt.

Debtor/Applicant Ltd.

Amount Involved Rs. 14 crores

1. M/s Swift Shipping and Freight Logistics Pvt. Ltd. (“Corporate Debtor” or “CD”)
filed an application under Section 10 of the Code saying that it has committed
default in discharging its liabilities. The Board of Directors, in its meeting on
18.01.2017, resolved to initiate the proceedings under the Code.
2. The shareholders in the AGM held on 18.01.2017 also gave consent for
initiating insolvency resolution process.

A. The CD filed audited financial statements for the years ending on 31.03.2014,
31.03.2015 and 31.03.2016 and the provisional financial statements as on
23.03.2017. The Balance Sheet as on 31.03.2016 disclosed an accumulated
loss of around 14 crores. Mere reading of financials reveals that CD cannot
meet its liabilities which are far in excess of the assets.
B. The financial statements also reveal that there are no operations in the
company for past two years. The conclusion that CD committed default in
paying liabilities is clearly established.
order
i. Appointed Mr. Uday Vinod Chandra Shah as an Interim Resolution
Professional (IRP).
ii. Declared a Moratorium as contemplated under Section 14 of the Code.
iii. Directed causing of Public Announcement of Corporate Insolvency
Resolution Process to be made immediately, under Section 13 and
15 of the Code.
MUMBAI BENCH 391

BENCH, MUMBAI
C. P. NO. 249/1 & BP/NCLT/MAH/2017
Coram: B.S.V. Prakash Kumar, Member (Judicial) &
In the matter of under Section 10 of Insolvency and Bankruptcy Code, 2016 and
Rules 2016)
And
Swift Shipping and Freight Logistics Pvt. Ltd.
.... Corporate Debtor /
Corporate Applicant.
Applicants' Counsel: Ms. Shraddha Jha a/w. Utkarsh Srivastava i/b. Bharucha &
Patners, Advocates for the Applicant.
ORDER
(Heard & Pronounced on 19.04.2017)

This Company Petition is filed by M/s Swift Shipping and Freight Logistics Private
Ltd (Corporate debtor) U/s 10 of the I.B Code 2016 saying that the corporate debtor
has committed default in discharging its liabilities. The Board of Directors of the
corporate debtor in the meeting held on 18-1¬17 resolved to initiate proceedings
under IB Code. The shareholders of the company in the AGM held on 18-1-17
given their consent for initiating insolvency resolution process by the corporate
debtor.
2. The Corporate debtor disclosed that the payables work out to Rs.5,42,36,093
and receivables is Rs.92,11,106. The addresses of the creditors and debtors were
disclosed in the petition. The audited financial statements for the years ending on
31-3-14, 31-3-15,31-3-16 and the provisional financial statements as on 23-3-17
were enclosed to the petition. The Balance Sheet as on31-3-2016 discloses an
accumulated loss of around Rs.14 crores. Mere reading of the financials clearly
reveals that the corporate debtor cannot meet its liabilities which are far excess
of the assets. The financial statements also reveal that there are no operations in
the company for the past two years. The financial statements disclosed in the
petition leads to a clear conclusion that the corporate debtor committed default in
paying its liabilities, as contended by the corporate debtor.
3. The corporate debtor has disclosed Mr. Uday Vinodchandra Shah, 4th Floor,
Deepak Building, R. B. Mehta Road, next to Canara Bank, Ghatkopar East, Mumbai
-77 Registration Number: IBBI/IPA-001/IP-00088/2016- 17/1138, as Interim
Resolution Professional who has given his consent in form no.2 and also stated
that there are no disciplinary proceedings against him
4. On reading the petition and the supporting documents annexed with the
petition, this Bench is of the view that the corporate debtor has committed default
and the petition contains the particulars as required u/s 10 of I&B Code 2016,
hence, this Bench hereby admits this Petition, declaring moratorium with
consequential directions as mentioned below:
moratorium period.
(iv) That the order of moratorium shall have effect from 19.04.2017 till the
the case may be.
Code.
(vi) That this Bench hereby appoints, Mr. Uday Vinodchandra Shah, 4th Floor,
Deepak Building, R. B. Mehta Road, next to Canara Bank, Ghatkopar East,
Mumbai-77, Registration Number: IBBI/IPA-001/IP- 00088/2016-17/1138,
MUMBAI BENCH 393

Sd/- Sd/-
V. NALLASENAPATHY B. S.V. PRAKASH KUMAR
M/S MAGNA OPUS HOSPITALITY PVT. LTD.
Name of the Corporate Debtor M/s. Magna Opus Hospitality Private

Limited
Name of the Operational Mr. Sanjaya Kumar Ruia
Creditor/Applicant
Company Petition No. 65/I& BP/NCLT/MB/MAH/2017

Amount Involved Rs. 40.73 lakhs

1. Mr. Sanjaya Kumar Ruia (“Operational Creditor” or “OC”) has affirmed
through an affidavit dated 29.03.2017 thatM/s. Magna Opus Hospitality
Private Limited (“Corporate Debtor” or “CD”) had defaulted in payment of
professional services of Rs. 2,29,345 and also defaulted in the payment of
Advisory services charges of Rs. 38,44,389 aggregating to a total sum of
Rs. 40,73,734.
2. The OC had affirmed in the affidavit that he had tried to serve the petition
to CD on 21.03.2017. The OC had tried to serve by hand but the Directors of
the CD refused to take delivery.
3. The OC had also attempted to serve the petition through Registered Post
but the Postal department returned the Registered Post letters with the
remark “Refused”.
4. The OC had also informed that a criminal case u/s 138 of the Negotiable
Instruments Act was filed before the Hon’ble Magistrate J.M.F.C., Mumbai
on 03.03.2017.
5. As per the direction of this NCLT Bench given on 31.03.2017, the OC again
dispatched copy of the cover letter, copies of demand notice and copy of
petition through speed post registered letter on 01.04.2017 vide receipt.
6. Under such circumstances when the CD had chosen not to defend by not
responding to any of the notices, it was held that he had nothing to say in
defence.
MUMBAI BENCH 395
7. The OC had stated that that being a Chartered Accountant, he had provided
professional services and the amount outstanding is in the nature of
“professional fees”.

A. The first question raised was whether “Professional Fees” falls under the
definition of “Operational Debt” as defined u/s 5(21) of the Code. It was
observed that “Operational Debt” means a claim in respect of the provision
of goods or “services” including employment or a debt in respect of
repayment of dues arising under any Law. The term “Services” is not defined
in the Code and hence its definition was examined under different lights
viz. Black Law Dictionary, Dictionary, Consumer Protection Act and the
Bench held that the impugned debt falls within the ambit of “Operational
Debt”.
B. The Bench drew its attention on a mandate letter dated 07.17.2017 for
assigning Advisory Services by the CD wherein it was referred that the CD
intended to raise approximately Rs. 1400 lakhs and for that purpose, it
intended to appoint the OC for Advisory Services as well as for providing
assistance in fund raising. The OC claimed that a credit facility from Bank
of India had been duly assisted and business loan was sanctioned for Rs.
8,19,70,000. The OC had raised invoice in this matter.
C. The Bench took note of Section 3(11) & (12) of the Code relating to “debt”
and “default” respectively and stated that a debt is in existence and a
default has been committed.
D. The Bench admitted the application and passed the following orders:
i. Appointed Mr. Sushil Kumar Gupta as the Interim Resolution
Professional (IRP) and directed him to perform the duties assigned
under Section 18 of the Code.
ii. Declared moratorium in terms of section 14 of the Code which shall
have effect from the date of this order.
iii. Directed the IRP to cause public announcement in terms of Section
13 of the Code.

MUMBAI BENCH, MUMBAI
COMPANY PETITION N0.65/I&BP/NCLT/MB/MAH/2017
APPLICATION BY OPERATIONAL CREDITOR TO INITIATE CORPORATE INSOLVENCY
RESOLUTION PROCESS UNDER THE CODE
(Under rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating
Authority) Rules, 2016).
CORAM: SHRI M.K. SHRAWAT MEMBER (JUDICIAL)
Mr. SANJAYA KUMAR RUIA
Sanjay Ruia & Associates B-3/1/1:3, Sector-2, Vashi
Navi Mumbai - 400073
...Petitioner.
Versus
M/S. MAGNA OPUS HOSPITALITY PRIVATE LIMITED,
A-415/415, 2nd Floor, Vashi Plaza, Sector-17,
Vashi, Navi Mumbai - 400 703
...Respondent.
PRESENT ON BEHALF OF THE PARTIES
FOR THE PETITIONER
Mr. Sanjaya Kumar Ruia along with Mr.Harem P. Shah for Petitioner.
ORDER
Date of Hearing : 11th April, 2017
Date of Pronouncement: 12th April, 2017.
1. This Petition has been filed by the Petitioner on 27th of March, 2017 under the
provisions of Insolvency and Bankruptcy Code, 2016 in the capacity of “Operational
Creditor”.
2. The Petitioner has affirmed through an Affidavit dated 29th March, 2017 that
M/s. Magna Opus Hospitality Private Limited is a “Corporate Debtor/Operational
Debtor" who had defaulted in payment of Professional Services of Rs. 2,29,345
and also defaulted in payment of Advisory Services Charges of Rs. 38,44,389/. In
this Affidavit the Petitioner has affirmed that he had tried to serve the Petition
(Form No. 5) to the Operational Debtor on 21st March, 2007. Through the said
Affidavit it is stated that the Petitioner tried to serve by hand but the Directors of the
Operational Debtor refused to take the delivery. The Petitioner has also attempted
to serve the Petition through “Registered Post”, details are as under:-
MUMBAI BENCH 397
a. Vide Postal Receipt No. EM722428095IN dated 22/03/2017 to Magna

opus Hospitality Private Limited, A-415/417, Vashi Plaza, Sector-17, Vashi,
Navi Mumbai - 400703.
b. Vide Postal Receipt No. EM72242808IIN dated 22/03/2017 to Mr. Rohit
Prem Chhabra at 802/6, Sagar Darshan, Sector-19, Nerul, Navi Mumbai -
400706.
c. Vide Postal Receipt No. EM722427965IN dated 22/03/2017 to Mrs. Rajani
Rohit Chhabra at 802/6 Sagar Darshan, Sector-19, Nerul, Navi Mumbai -
400706.
3. The Postal Department has returned the Registered Post Letters with the remark
“Refused". The Petitioner in the said Affidavit has also informed that a Criminal
Case No. 9033/2016 u/s 138 of the Negotiable Instruments Act was filed before
the Hon’ble Magistrate J.M.F.C., C.B.D. Belapur, Navi Mumbai on 3rd March,
2017. The Petitioner has also sent information through e-mail as detailed below:
“11. I have also send a copy of the email from my mail address
casaniavruia@amail. com to Rohit.chhabra@holidaykitty.com.
Rohit. chhabrat&magnapus.com
Rajani.chhabra@holidaykitty.com. on 31st March,2017. The copy of the email
sent to the directors of Magna Opus Hospitality Private Limited is enclosed with
the affidavit."
4. When the matter was posted for hearing on 31st of March, 2017 before this
Bench, it was directed to serve Notice by any permissible mode of service i.e.
either by hand, Speed Post/ Registered Post intimating the next date of hearing
i.e. 11.04.2017. The Petitioner has made compliance as intimated below
“8. As per the direction of the Hon 'ble Bench during the last hearing on 31st
March,2017, I have again dispatched the copy of the Cover Letter as final
bearing on 11/04/2017 before the Bench with copies of Demand Notice in Form
3 and Form 4 of NCL T and the copy of Petition in Form 5 along with the annexure
through Speed Post Registered Letter on 1st April, 2017 vide receipt and the
speed post track report is attached with the affidavit."
5. Under the circumstances when the “Operational Debtor" had chosen not to
defend by not responding any of the Notices it is hereby held that he had nothing
to say in defence.
6. The Operational Creditor has stated that being a Chartered Accountant he had
provided Professional Services and the impugned amount outstanding against
the “Operational Debtor” is in the nature of “Professional Fees”. The first question
which is raised during the course of hearing is whether the ‘Professional Services
shall fall under the definition of “Operational Debt” as defined u/s 5(21) of the I &
BP Code. The definition is as under
“(21) “Operational debt" means a claim in respect of the provision of goods or
Government, as State Government or any local authority."
7. Thus the Definition of “Operational Debt” means a claim in respect of the
provision of goods or “services” including employment or a debt in respect of
repayment of dues arising under any Law. The term used in this definition Services
has not been defined under this Code. However, the expression “Service” as per
Blacks Law Dictionary is, “the act of doing something useful for a person or
company, usually for a fees". Another meaning as per the Dictionary is, “an
intangible commodity in the form of human effort, such as labour, skill or advice”.
Likewise, meaning of “Service Charge” as per the Dictionary is a Charge assessed
for performing a service. If we examine the expression “service” in other provisions
of an Act, namely Section 2 in the Consumer Protection Act, 1986, then it means
service of any description which is made available to potential users and includes,
but not limited to, the provision of facilities in connection with banking, financing,
insurance, transport, processing, supply of electrical or other energy, boarding or
lodging or both, housing construction, entertainment, amusement or the purveying
of news or other information, but does not include the rendering of any service
free of charge. This term “service" has also been defined that any activity
carried out by a person for another, for consideration.
8. Without going much in detail as also keeping brevity in mind I hereby hold that
a Professional Service provided by a Chartered Accountant definitely fall under
the expression “Services” as incorporated in the definition of “Operational Debt
U/s 5(21) of the Code. Once it is hereby held that the impugned debt falls
within the ambits of “Operational Debt” hence to be adjudicated under the
provisions of Section 8 and Section 9 of the Code.
9. Prima Facie the documents attached with the Petition have demonstrated that,
the Petitioner has audited the accounts of the Debtor Company. In addition to the
said Professional Service my attention is drawn on a Mandate Letter dated 7th
July, 2017 for assigning Advisory Services by the “Debtor Company” namely Magna
Opus Hospitality Private Limited, Vashi, Navi Mumbai referred as “Sponsor” of
One Part and Sanjay Ruia and Associates on the Other Part as “Advisor”. The said
Mandate Letter has referred that “Sponsor” intended to raise approximately Indian
Rupees 1400/- Lakhs and for that purpose and intends to appoint the Petitioner
for Advisory Services and for providing assistance in Fund raising. The claim of
MUMBAI BENCH 399
the Petitioner is that, a Credit Facility from Bank of India, Belapur Branch has been
duly assisted and thereupon Business Loan was sanctioned by sanctioning Credit
Facility of Rs. 8,19,70,000/- (Rupees Eight Crores Nineteen Lakhs Seventy Thousand
only). Thereupon the Petitioner had raised Invoice/Debit Note which is the subject
matter of this Petition.
10. In the light of the above factual matrix it is hereby held that there is an existence
of “debt” as defined under Section 3(11) of the Code, means a liability or
obligation in respect of a claim which is due from any person and includes a
financial debt and operational debt. Further it is held that “default” exists as
defined under section 3(12) of the Code means non-payment of debt when
whole or any part or instalment of the amount of debt has become due and
payable and is not repaid by the debtor or the corporate debtor, as the case
may be.
11. Once it is established as per the foregoing paragraphs that there was an
existence of ‘ Default’ then the provisions of Section 8 of the Code shall come into
operation. It is prescribed that an Operational Creditor on occurrence of a default
deliver a Demand Notice of unpaid Operational Debt or copy of an Invoice
demanding payment of the amount involved in the default to the Corporate Debtor
as prescribed. Although in Sub-section (2) of Section 8 a Corporate Debtor is
authorized to establish the existence of a dispute within a period of 10 days on
the receipt of the Demand Notice, but in the present case the “Operational Debtor”
had not responded at all. Due to this reason the provisions of Section 9 of the
Code shall come into operation.
12. As per the provisions of Section 9(1) of the Code after the expiry of the period of
10 days, from the date of delivery of the Demand Notice if the Operational Creditor
does not receive payment from the Corporate Debtor and there is no Notice of
Dispute then the Adjudicating Authority shall initiate Corporate Insolvency Resolution
Process. This Section further prescribes [vide Section 9(4)] that an Operational Creditor
initiating a Corporate Insolvency Resolution Process under the Section may propose
an Insolvency Professional to act as Interim Resolution Professional. The Petitioner
has intimated the name of C.A. Mr. Sushil Kumar Gupta, l-A, Ground Floor,
Ramchandra Niwas, Plot No. 21-22, Sector 12-A, Opp. Kalash Udyan, Koparkhairane,
Navi Mumbai-400 709, casusilgupta@gmail.com IBBI/IPA-001/IP-00469/2016-
17/1624 who has given his consent along with the Certificate that there is no
Disciplinary Proceedings against him. Mr. Sushil kumar Gupta, CA is hereby
appointed as an “Interim Resolution Professional" to initiate the Insolvency
Resolution Process.
13. As a consequence, once the process has been initiated, the provisions of
Moratorium as prescribed under Section 14 of the Code shall be operative
henceforth with effect from 11.04.2017 shall be applicable by prohibiting institution

of any Suit before a Court of Law, transferring/encumbering any of the assets of
the Debtor etc. However, the supply of essential goods or services to the “Corporate
Debtor” shall not be terminated during Moratorium period. It shall be effective till
completion of the Insolvency Resolution Process or until the approval of the
Resolution Plan prescribed under Section 31 of the Code.
14. That as prescribed under Section 13 of the Code on declaration of Moratorium
the next step of Public Announcement of the Initiation of Corporate Insolvency
Resolution Process shall be carried out by the Petitioner immediately as specified.
15. That the Interim Resolution Professional shall perform the duties as assigned
under Section 18 of the Code and inform the progress of the Resolution Plan and
the compliance of the directions of this Order on 20th July 2017 to this Bench.
16. The Petition is “Admitted” and disposed of on the terms directed hereinabove.
Sd/-
M.K. SHRAWAT
MEMBER (JUDICIAL)
Date: 12th April, 2017.
MUMBAI BENCH 401
M/S SHARON BIO-MEDICINE LIMITED
Name of the Corporate Debtor M/s Sharon Bio-Medicine Limited

Name of Financial Culrross Opportunities SP &Peter Beck and
Creditor/Applicant Partnersh

Amount Involved

1. On 15.02.2007, M/s. Sharon Bio-Medicine Limited (“Corporate Debtor” or
“CD”) authorised the issue of USD 1,50,00,000 zero percent convertible
bonds which was approved by the shareholders of the Corporate Debtor
on 15.03.2009. Culrross Opportunities SP (applicant no. 1) holds 18.18% of
bonds while Peter Beck and Partners (applicant no. 2) (collectively referred
to as FCs) holds 67.88% of bonds aggregating to 86.06% share of the
issued bonds.
2. A trust deed dated 27.07.2007 was executed between the CD and Deutsche
Trustee Company Ltd. (trustee). A supplementary trust deed was executed
on 05.02.2014. The supplementary trust deed provided, inter alia, that the
bond holders approved, assented and agreed irrevocably to subscribe to
new bonds which will be issued by CD in lieu of the accrued interest
amount on the outstanding bonds constituted in terms of the Principal
Trust deed.
3. The supplementary trust deed was executed in lieu of non-payment of
interest on outstanding bonds constituted in terms of the Principal Trust
deed. Even after execution of Supplementary Trust deed, the CD failed to
pay interest to bond holders i.e. FCs which fell due on 01.06.2014.
4. Financial Statement of CD confirms the existence of financial debt in respect
of the outstanding interest payment on the issued bond.
5. FCs provided that the maturity date of Bonds was 30.11.2012 and
Supplement Trust Deed was executed on 05.02.2014 before the limitation
period of the bond is over. The first interest payment fell due on 01.06.2014
and FCs filed the application on 31.03.2017, hence the debt has not become
time barred as per the provisions of the Limitation Act, 1963.
6. FCs even served demand notice to the CD in respect of the payment of the
outstanding interest. But the CD neither made any payment nor replied to
the demand notice issued by the bondholders.

A. The Bench observed that on careful reading of the application, the Bench
was of the view that the application is in compliance of the provisions of
section 3(11), 3(12), 5(7), 5(8)(C) and 7 of the Code.
B. Accordingly, the Bench admitted that application and passed the following
directions:
i. Appointed Mr. Dinkar T. Venkatasubramanian as Interim Resolution
Professional.
Code. However, it was clarified that supply of essential goods or
services to corporate debtor, as specified, shall not be terminated or
suspended or interrupted during moratorium period.
resolution process to be made immediately under section 13 and
15 of Code.
MUMBAI BENCH 403

Rule 2016)
1. Culrross Opportunities SP.
2. Peter Beck and Partners
... Applicants
V/s.
M/s. Sharon Bio-Medicine Limited
Applicants' Counsel: Mr. Sharan Jagtiani, Counsel, a/w. Mr. Arjun Gupta,
Advocates i/b. Nishith Desai Associates for the Applicant.
Corporate Debtors' Counsel: None appeared.
ORDER

1. This Company Petition is filed by M/s. Culrross Opportunities SP (hereinafter
called as PI) and M/s. Peter Beck and Partners (herein after called as P2) against
the corporate debtor M/s. Sharon Bio-Medicine Limited a Company incorporated
under the Companies Act, 1956. This Petition is filed under Section 7 of IB Code,
2016 for initiation of corporate insolvency resolution process.
2. The Petitioners submit that the Board of Directors of the Corporate debtor, on
15-2-2007, authorised the issue of USD 1,50,00,000 zero percent convertible
bonds subject to an over allotment option for up to USD 4,50,00,000, which was
approved by the shareholders of Corporate Debtor by a Resolution on 15-3-2009.
The Company circulated an offering circular which forms part of the prospectus
for the bonds, which contained the objections, risk factors, times of investment
etc.
3. The petitioners are the registered holders of a certain portion of the USD
1,50,00,000 zero percent convertible bonds issued by the corporate debtor.

P1 holds 18.18 percent and P2 holds 67.88 percent of the bonds as stated at para
184 of the petition. P1's and P2's ownership of the bonds is evidenced by the
Trade confirmations submitted by the petitioners' counsel.
The petitioners further submits that annexure A-l Trust-deed dated 27-7¬2007
was executed between the corporate debtor and Deutsche Trustee Company
Ltd., (Trustee) constituting USD 1,50,00,000 zero percent unsecured foreign currency
convertible bonds 2012 (subject to overallotment option up to USD 4,50,00,000 of
bonds), convertible into equity shares of the corporate debtor.
4. The petitioners further state that the corporate debtor came forward to execute
a Supplemental Trust deed for the Principal trust deed executed on 27-7-2007
and accordingly issued Annexure-A-2 notice to the bond holders.
A Supplemental Trust deed was executed on 5-2-14 between the corporate debtor
and the trustee. The said Supplemental Trust deed relates to principal trust deed
dt.27-7-2007 in respect of USD 1,65,00,000 zero convertible bonds due 2012
issued by the issuer is shown in the Annexure-F of the written submissions.
5. The Supplemental Trust deed says that the bond holders by a written Resolution
consented to amend the Principal Trust deed and directed the Trustee to concur
for such amendments and execute the Supplemental Trust deed, in order to
concur in and give effect to modifications and waivers. It further says that the
bondholders approved, assented and agreed irrevocably to subscribe to new
bonds which will be issued by the corporate debtor in lieu of the accrued interest
amount on the outstanding bonds constituted in terms of the Principal Trust deed.
6. Clause 2 of the Supplemental Trust deeds reads as below;
"2.2. The bonds shall bear interest from I December, 2013 (the "Interest
Commencement Date") at the rate of 5.35% per annum of the principal amount
of the Bonds payable semi-annually in arrears on 1 June and 1 December in
each year (each such date for the payment of interest, an "Interest Payment
Date"). The first Interest Payment Date will be 1 June 2014 and the first such
interest payment will be in respect of the period from and including the interest
Commencement Date to but excluding the first Interest Payment Date and the
last such payment being made on the Maturity Date for the period ofl June
2017 through and including the Maturity date.
7. According to the Supplemental Trust deed the first interest payment on the
bonds fell due on 1-6-2014. The Supplemental Trust deed clearly shows that it
was executed in lieu of non-payment of interest on the outstanding bonds
constituted in terms of the Principal Trust deed. Subsequent to the execution of
Supplementary Trust deed also, the corporate debtor failed to pay interest to the
MUMBAI BENCH 405
bond holder which fell due on 1-6-2014 as envisaged in the Supplemental Trust
deed.
8. The Petitioners state that they constitute 86.06% of the holders of bonds and
the bond holders passed a written resolution on 11.08.2016 waving and / or
discharging the trustee of the bonds of all obligations in respect of initiating the
winding up proceedings against the Company and accordingly they are entitled
to take this insolvency resolution process.
9. The communications between the Reserve Bank of India and State Bank of
India's Overseas Branch at Cuffa Parade (Authorised dealer) enclosed to the
petition clearly reveals that, Reserve Bank of India has no objection for the
extension of the maturity period of zero coupon FCCBs of USD 1,65,00,000 issued
by the corporate debtor, up to 4-12-2017.
10. The Financial creditors enclosed 27th annual report of the corporate debtor at
annexure G of the written submissions wherein the financial debt was shown as
"other loans and advances-FCCB", under the sub heading unsecured creditor,
which was classified as long term borrowings. The Director's report which form
part of the annual report under the heading significant events during period
ended 31-3-2016 reads as below;
"(ii) DEBT RESTRUCTURING: -
Company's Debt was restructured under the JLF Mechanism in 2014-15.
Meetings and discussions with banks took place during the period under review
but no major changes were occurred.
(iii) FOREIGN CURRENCY CONVERTIBLE BONDS: -
The company had issued 165 Nos. of Zero Coupon Foreign Currency Convertible
Bonds ofUS$ 1, 00,000 each aggregating to US$ 16.5 Million on 27, November
2007. These Bonds are convertible Bonds at the option of bond holders into
equity shares of Rs. 10/- each fully paid at the conversion price of Rs. 315/- per
share initially but now conversion price has been reset to Rs. 228.04/- per
share, subject to the terms of issue, with a fixed exchange rate of Rs. 39.15
equal to US$ 1.00 within 5 years and 7 days from the date of issue.
The bondholders have agreed to extend the bonds for the further period of 5
years. Bondholders have agreed to extend the period between one year to five
years and interest to be paid between LIBOR + 3.50% - 5% per annum, as per
the ECB guidelines. The bondholders have given their consent as stated above
and the company authorize dealer has submitted the documents to Reserve
Bank of India (RBI), accordingly. The Company is still in process of issue of new
Bonds of US$ 8.046 Million from 30, November 2013. However, application for
this B series bonds have been filed to RBI. These Bonds are convertible Bonds
at the option of bond holders into equity share of Rs.2/- each fully paid at the
conversion price of Rs.28.85/- per share, subject to the term of issue within 3
years from the date of issue".
11. The financial creditor says that the foreign currency convertible bonds is a
financial debt, the existence of which is proved by the Principal Trust deed dated
27-7-2007 along with the Supplemental Trust deed executed on 5-7-14. Further
the financial statement of the corporate debtors confirms the existence of financial
debt.
12. The Supplementary Trust Deed executed on 5-7-14 provides that the first
interest payment date is on 1-6-14 and since the said due is not paid to the bond
holders till date, the Petitioners say that there is default and hence the petitioners
have filed this petition for Insolvency Resolution Process against the corporate
debtor.
13. The corporate debtor by a letter dated 29-4-14 addressed the Deutsche Trustee
Company limited, the trustees of the bond holder, referring to the payment advice
dated 22nd for USD 30,00,000 as partial payment on the bonds with accrued
interest up to 30.04.14. The Corporate Debtor further acknowledge on 30.04.2014
that this payment is due on the Bonds on 30.04.2014 as per the revised terms and
conditions of the bonds. The letter further states that the said partial payment plus
accrued interest can be paid on 31.07.14.
14. The counsel for the petitioners cited (i) Bajan singh Samra v. Wimpy International
Ltd., 185(2011) DLT 428, (ii) Shreeram Durgaprasad v. Sail Soap Stone Factory & Ors.
1982, MhLJ 912, (iii) J.G. Glass Ltd. v. Indian Bank and Anr. 2002 (104(1)) Bom LR
234, and (iv) Bengal Silk Mills Co. v. Ismail Golam Hossain Ariff, AIR 1962 Cal. 115,
to say that the debt shown in the Balance Sheet of the corporate debtor is an
acknowledgement of liability. The counsel further cited (i) S.F.Mazda v.
Durgaprasad AIR 1961 SC 1236 and (ii) Khan Bahadur Shapoor Freedom Mazda v.
Durga Prasad Chamaria & Ors. (1962) 1 SCR 140, to say that the letter dated 29-4-
14 written by the corporate debtor to the trustee amounts to an acknowledgement
of debt u/s 18 of the Limitation Act and the period of limitation should accordingly
be calculated afresh.
15. The Petitioners submit that the maturity date of Bonds was 30.11.2012, the
Supplemental Trust Deed was executed on 05.02.2014, before the limitation period
of the bond is over, the first interest payment fell due on 01.06.2014 and this
Petition is filed on 31.03.2017, hence the debt is not barred by limitation.
16. The Annexure A-9 legal notice dt.25-4-2016 issued by M/s Nishith Desai
Associates on behalf of the majority bond holders in which the petitioners are
MUMBAI BENCH 407
constituents demanding payment from the corporate debtor, clearly shows that
demand was made and the corporate debtor preferred not to make any payment
and also there was no reply from the corporate debtor to the said notice.
17. The petitioners served a copy of the petition to the respondent corporate
debtor on 3-4-2017. Two emails were sent to the respondents. Further the
petitioner has sent a letter to the corporate debtor stating that the case will be
mentioned on 7-4-2017, however, the corporate debtor has not appeared before
this Bench.
18. The petitioner named Mr. Dinkar T. Venkatasubramanian, Ersnt & Young LLP,
6th Floor, Worldmark-1 IGI Airport Hospitality District, Aerocity, New Delhi- 110037,
dinkar.venkatasubramanian@in.ey.com . Registration No. IBBI/IPA-001/IP-
P00003/2016-17/10011, as interim resolution professional who was given his
written consent as required under Rule 9 of Insolvansy and Bankrupy (Application
to Adjudicating Authority) Rules 2016.
19. On careful reading of the petition, this Bench is of the view that the petition is
in compliance of provisions of Sections 3(11), 3(12), 5(7), 5(8)(C) and 7 of IB Code
2016, and admits this petition declaring moratorium with consequential reliefs as
below:
moratorium period.
(iv) That the order of moratorium shall have effect from 11-04-2017 till the

the case may be.
Sd/- Sd/-
V. NALLASENAPATHY B. S.V. PRAKASH KUMAR
MUMBAI BENCH 409
M/S UTTAM GALVA STEEL LTD.
Name of the Corporate Debtor M/s Uttam Galva Steel Ltd.
Name of Operational 1. M/s DF Deutsche Forfait AG

Creditor/Applicants 2. Misr Bank Europe GmbH

Bench NCLT, Mumbai Bench, Mumbai

I. Background
1. The present application is filed under Section 9 of the Code by Operational
Creditors (collectively referred to as “OCs”) viz. M/s DF Deutsche Forfait AG
(“Deutsche”) and Misr Bank Europe GmbH (“Misr Bank”) against Uttam
Galva Steels Limited (“Corporate Debtor” or “CD”) stating that CD defaulted
in making payment of USD 16,542,886.33 (inclusive of interest till
28.02.2017) equivalent to Rs. 110,40,30,876/- towards 20,000 tons of Prime
Steel Billets supplied by German Company named AIC Handels GmbH
(“AIC”).
2. This debt was initially assigned by AIC to Deutsche by entering into a
Discount Agreement. Deutsche, in turn, subsequently assigned a part of
this debt to Misr Bank.
II. Brief Facts of the case

1. Uttam Galva (“Corporate Debtor” or “CD”) is engaged in manufacturing
steel rolls and also dealing with import and export business in relation to
steel.
2. On 16.08.2013, CD entered into a Sales Contract with AIC for purchase of
20,000 MT of Prime Steel Billets (hereinafter “Goods”) at the rate of $540
per MT agreeing that the shipment of goods would be made in September,
2013 and agreed money would be payable in 180 days from the Bill of
Lading.
3. Accordingly, on 16.09.2013, AIC shipped 19,976 MT of Goods and Bill of
lading dated 16.09.2013 was issued. On 18.09.2013, AIC issued an invoice
for a sum of USD 10,787,040 for the Goods supplied.

4. CD had to make the payment by 15.03.2014 (maturity date after 180 days)
5. CD also sent confirmation that the Goods had been duly received along
with the documents thereby accepting faultless performance of AIC. Thus,
CD irrevocably and unconditionally had undertaken to pay AIC as per the
invoice waiving all rights of objection and defence.
6. On 07.10.2013, AIC issued a letter of notification to CD informing that AIC
had entered into a Forfeiting Agreement [an agreement where the exporter
uses financial assistance of an entity to enable it to receive cash
immediately by selling its (exporters’) receivables i.e. the amount which
importer owes to exporter) at a discount and eliminates the risk by making
sale without recourse.] with Deutsche whereby it assigned its entire debt
with present and future rights, claims and CD duly acknowledged and
confirmed the same.
7. On 27.12.2013, Deutsche sent a notification to CD that part of receivables
due to it, which were to mature on 15.03.2014, had been unconditionally
assigned to Misr Bank. This assignment was also acknowledged by CD.
8. On default of CD to make payment, Deutsche and Misr Bank issued notice
dated 08.12.2016 u/s 433 and 434 Companies Act, 1956 which was replied
by CD raising allegations like, Goods delivered to third party i.e. Aartee
Commodities Ltd. (“Aartee”), subsequent assignment to Misr Bank not
valid. However, no suit was filed by CD.
9. After the Code come into force, Statutory Notice under section 8 of the
Code was issued to CD on 28.02.2017 calling CD to pay USD 16,542,886.33
i.e. a principal sum of USD 10,787,040 and interest of USD 5,755,846.33
(totalling to USD 16,542,886.33 equivalent to Rs. 110,40,30,876/-)
10. On 03.03.2017, CD’s advocates replied by denying all claims with a caveat
that they were in process of obtaining detailed instructions from CD and
would reply in due course.
11. On 11.03.2017, CD again replied stating that its obligations under the Sales
Contract were dependent on payment of Aartee and CD has already filed
a civil suit on 10.03.2017 before the Hon’ble High Court of Bombay.
12. Thereafter, Deutsche and Misr Bank filed the present application on the
ground that no suit or arbitration proceedings were pending before
issuance of notice under Section 8 of the Code
MUMBAI BENCH 411
III. Objections of Uttam (“Corporate Debtor” or “CD”)

CD objected to the admission of the application on the ground that –
i. The application is not maintainable since CD raised notice of Dispute
within 10 days after receipt of Notice u/s 8 of the Code.
ii. Affidavit not filed by OCs under section 9(3)(b) stating that no notice has
been given by CD relating to dispute of unpaid operational debt (however,
when reply was infact given by CD, there was no need for OCs to file
affidavit that no reply has been given by CD)
iii. Deutsche and Misr Bank are not Operational Creditors.
iv. The application should be rejected u/s 9(5)(ii)(d) once Notice of Dispute
has been received by OCs
v. OCs never initiated any recovery proceedings though the alleged debt is
of March, 2014 until present application is filed.
vi. Disputed questions of facts are involved requiring adjudication by Trial
Court and the adjudication in summary manner cannot be done.
vii. Sales Contract is governed by English Law thus, requiring consent of CD
for any modification
viii. Interest on principal amount is highly arbitrary and not admitted by CD.
ix. Power of Attorney (“POA”) given to file this case has not specifically
authorized the persons to initiate proceedings under the Code.
IV. Grounds of Admission and Details of the Order

A. Discussion of the term ‘Dispute’
i. The Bench observed that the issue is whether the word ‘includes’
appearing in definition of “Dispute” in section 5(6) of the Code is
extensive as generally understood or would it only mean “Suit” or
“Arbitration Proceedings”.
ii. The contention of CD was that the word ‘dispute’ had to be
understood as ‘mere denial to the claim’. According to CD, the
definition of dispute is inclusive definition enlarging scope to the
extent it can travel and that the word “and” in section 8(2)(a) of the
Code is to be read as “or”.
iii. The Bench took help of Section 2 of the Code which stated that
definition has to be taken in the way it is defined as long as the
context otherwise does not require. CD’s contention was rejected
on the ground that, one, defining section will not govern the
substantive section, and, two, definition has to be construed in the
context of substantive section, not otherwise.
iv. The Bench observed that “if reply is given denying the claim despite
default occurrence is clear, does it mean that no application can be
filed by any operational creditor even though the operational creditor
makes the case of default occurrence? If that is so, it will virtually
ousting operation creditor filing any case under Section 9” .
v. The Bench relied upon South Gujarat Roofing Tiles Manufacturers
Association vs. State of Gujarat (1976) 4 SCC 601 wherein it was held
that even the word ‘includes’ can be used in the sense of ‘means’.
vi. In the present case, CD’s figures had gone into minus, Profit and
loss statement as on 31.03.2016 reflected Profit After Tax as Rs.
1551.51 crores. There was no indication that the company could pay
its debts or could be revived.
B. “Existence of Dispute”
i. The Bench noted that existence of dispute would mean pendency of
either suit or arbitration proceedings before receipt of Section 8 of
the Code from the Operational Creditor.
C. Power of Attorney not authorized to initiate proceedings under the Code
i. The counsel for CD had relied upon an order dated 30.03.2017 of
the Special Bench, NCLT at Guwahati which held that an Attorney
had exceeded his power by filing case under Section 7 of the Code
basing on POA given 2 years before.
ii. However, the Bench noted that in the present case, two POAs were
executed by OCs just 2 months before filing of the present application
authorizing the attorney to demand outstanding amount from CD
and also to initiate proceedings including winding up proceedings.
iii. The winding up jurisdiction in respect to Section 433(e) of the
Companies Act, 1956 were metamorphosed into insolvency
proceedings under the Code and thus, the application could not be
rejected on this ground.
D. Locus of OCs to file the application
i. The Bench noted that the OCs had locus to file the present application
since the debt has been properly assigned to Deutsche and
thereafter, Deutsche assigned part of debt to Misr Bank.
MUMBAI BENCH 413
ii. As to doctrine of privity of contract, there need not be any separate

contract between Applicants and Corporate Debtors once debt is
assigned and then, the third party will come into shoes of original
Operational Creditor.
E. Sales Contract is governed by English Law
i. It was held that it was for the CD to show that the English Law was
applicable and it has not been done so. Further, CD has not shown
that confirmation of assignment is a requisite under the Indian Law.
F. Bills of Exchange along with interest would become “Financial Debt” not
“Operational Debt”
i. Financial debt is money borrowed to repay on future date along
with interest. The money is lent for value addition to the money as
agreed between parties
ii. Operational debt is normally based on an agreement to pay for the
goods or services: it does not mean that interest cannot be claimed
in the times to come.
iii. The difference in these transactions is one given to get interest over
the money, the second transaction happens in business operations,
in both cases money is involved, as days go by after truncation ,the
time value of money will be there.
V. Final Order
The Bench admitted the application and initiated insolvency process
against CD.
Subsequent development
Before the NCLAT, both the parties jointly prayed for time for settling claims. In the
mean time to enable parties to settle their claims it was directed not to appoint an
Interim Resolution Professional till the next date. The matter was posted for
May 19, 2017.

C.P. NO.45/I&BP/NCLT/MAH/2017
Coram: B. S.V. Prakash Kumar, Member (Judicial) &
Rules 2016.
Between
M/s. DF Deutsche Forfait AG and Anr.
... Applicant/ Operational Creditor
V/s.
M/s. Uttam Galva Steel Ltd.
For Applicants : Mr. Shyam Kapadia i/b. Mr. Sonu Tandon, Advocates for the
Applicant/operational Creditor.
For Corporate Debtor : Shri. Janak Dwarkadas, Sr. Counsel, Shri. Ravi Kadam, Sr.
Counsel, a/w. Mr. Dhiraj Mhetre, Ms. Smiti Tewari, Advocates for the Respondent/
Corporate Debtor.
ORDER
(Pronounced on 10.04.2017)
Per B.S.V. Prakash Kumar
It is a company petition filed u/s 9 of Insolvency and Bankruptcy Code 2016 (IB
Code) by operational creditors viz. DF Deutsche Forfait AG (called as Deutsche) &
Misr Bank Europe GmbH (called as Misr Bank) against a corporate debtor company
viz. Uttam Galva Steels Limited (referred as Uttam whose financial statements
have already slipped into brackets) stating that Uttam defaulted in making payment
of USD 16,542,886.33 (inclusive of interest till 28-02-2017) equivalent to
Rs.110,40,30,876.44 towards 20,000 tons of prime steel billets supplied by a
Germany Company namely AIC Handels GmbH (called as AIC). This debt was
initially assigned to Deutsche by entering into a discount agreement by AIC,
thereafter Deutsche, in turn, subsequently assigned part of this debt to Misr Bank
by Deutsche. When Uttam failed to pay off the amount despite statutory notice u/
s 8 of IB Code has been received by it on 03.03.2017, after completion of 10 days
MUMBAI BENCH 415
from the date of receipt of notice by Uttam, Deutsche and Misr Bank, on 14th
March 2017, filed this company petition u/s 9 of IB Code for initiation of Insolvency
Resolution Process by declaring Moratorium with consequential directions as
set out under sections 13, 14, 15, and 16 of IB Code.
Brief background of this litigation:

2. The corporate debtor (Uttam) is in steel rolls manufacturing dealing with export
and import business in relation to steel, in furtherance of it, on 16th August 2013,
Uttam entered into a Sales Contract (Annexure-4) with AIC for purchase of 20,000
metric tons of Prime Steel Billets at the rate of $540 per MT, which would come to
$10,800,000 (+/- 10% depending on the exact quantity supplied) agreeing that
shipment of the goods be in the month of September 2013 and the agreed money
should be payable in 180 days from the Bill of Lading(Annexure-6) date. It is
further agreed that payment to be made in effective USD by two Bills of Exchange
each with face value of USD 5,400,000 (+/- 10%) to the order of seller i.e., AIC
drawn on and accepted by Uttam, maturing on the payment date, payable at a
payment domicile acceptable to AIC in Mumbai, it is also said that it would be
governed and construed in accordance with English Law and if any dispute in
between, it is by arbitration in accordance with Swiss Rules of International
Arbitration of the Swiss chambers of commerce by further saying that AIC is
entitled to pursue payment obligation of Uttam in the form of inter alia bills of
exchange before any competent court where a specially abbreviated form of
legal procedure exists.
3. As per the sale contract, AIC on 16th September 2013 shipped 19,976 MT of
Prime Steel Billets. A Bill of Lading dated 16th September 2013 came to be issued,
then on 18th September 2013, AIC issued an invoice (Annexure-5) for a sum of
USD 10,787,040 for the billets in quantity of 19, 976, 40 MT supplied to Uttam at a
rate of USD 540 per MT. A reference was made to two Bills of Exchange dated
18.9.2013 drawn by AIC on Uttam, one (Annexure-7) for USD 5, 387,040 and
another (Annexure-8) for USD 5,400,000 to pay on 15th March 2014 (maturity date
after 180 days) against these two Bills of Exchange and Uttam unconditionally
accepted the Bills.
4. Besides this, Uttam sent confirmation (Annexure-13) stating that the shipment
to Chttagong Port Bangladesh has been duly executed by AIC under the sale
contract dated 16.8.2013 and received all documents under the contract, therefore
buyer (Uttam referred to itself as buyer) accepted AIC (seller) faultless performance
without any reservation by confirming that there exists no further obligation or
liabilities of seller (AIC), Uttam further confirmed that the amount set out in the
invoice represents 100% of the purchase price, therefore buyer (Uttam) irrevocably
and unconditionally has undertaken to pay AIC as set out in the invoice waiving
all rights of objection and defence and buyer would effect the payment at maturity
without any deduction for and free of any taxes, charges, impost, levies or duties
present or future of any nature whatsoever in effective USD. It further stated that
this confirmation should form an integral part of the contract governed by English
Law and Arbitration as mentioned in the sale contract.
5. In the process of risk management, AIC entered into a discount (forfaiting)
agreement which means, financing used by exporters that enables them to
receive cash immediately by selling their receivables (the amount an importer
owes the exporter) at a discount, and eliminate risk by making the sale without
recourse, meaning the exporter has no liability regarding possible default by the
importer on paying the receivables. The forfaiter is the individual or entity that
purchases the receivables, so the importer is then obligated to pay the receivables
amount to the forfaiter. A forfaiter is typically a bank or a financial firm that
specializes in export financing.
6. On 7th October 2013, AIC issued a letter of notification (Annexure 11) to Uttam
informing that AIC had entered into forfeiting agreement (Annexure-10 dated 9/
10th of October 2013) with Deutsche stating that it had assigned the entire debt
with present and future rights, claims and demands to it by endorsing the bills of
Exchanges, as against that notification, Uttam acknowledged and confirmed the
agreement between AIC and Operational Creditor.
7. On 27th December 2013, Deutsche sent a notification (Annexure 14) to Uttam
notifying that part of receivables due to it under the sales Contract and Bills of
Exchange which were to mature on 15th March 2014 has been unconditionally
assigned to Misr Bank through another Forfating Agreement (Annexure 12) dated
27.12.2013. It is pertinent to say that this further forfaiting to Misr Bank has not
been confirmed by Uttam.
8. When Uttam failed to make payment even after maturity date 15.3.2014 had
been passed by, a protest was recorded on 19.4.2014 as required under law.
9. As Uttam failed to make payment of the above debt even after maturity date,
Deutsch and Misr Bank were constrained to issue notice dated 8th December
2016 u/s 433 and 434 of the Companies Act 1956, to which, Uttam replied raising
various allegations such as goods delivered to third party i.e., Aartee Commodities
Ltd, subsequent assignment to Misr Bank by Deutsch is not valid, but this Uttam
had not raised any law suit on any of the issues until statutory notice u/s 8 of the
Code issued by them.
10. In the meanwhile, having IB Code come into force, Deutsch and Misr Bank
issued statutory notice (Annexure 2) of demand u/s 8 of IB Code on 28th February
2017 calling upon Uttam to pay a sum of USD 16,542,886.33 i.e., a principal sum
MUMBAI BENCH 417
of USD 10,787,040 and interest of USD 5,755,846.33. On 3rd March 2017, a reply
(Annexure 3) came from Uttam denying all claims with a caveat that advocates
were in the process of obtaining detailed instructions from the corporate debtor
and would reply in due course.
Another reply notice dated 11th March has been sent by Uttam to the Deutsch and
Misr Bank through e-mail (Annexure - Al in additional affidavit) stating that its
obligations under the sales contract were dependent on payment by Aartee
Commodities Ltd. and Uttam already filed a suit before Honorable High Court of
Bombay on 10th March 2017. But this Bench has not noticed any such averment
of payment by Uttam is dependent upon payment by Aartee in any of the
correspondence with either AIC or Deutsch or Misr Bank until Uttam wrote reply
to the notice given by present operational creditors.
11. Since Deutsche & Misr Bank, on receipt of reply from Uttam on 3.3.2017 and
second reply on 11.3.2017 informing the operational creditors that Uttam filed suit
in respect of this claim against the creditors before Honorable Bombay High
Court subsequent to receipt of the notice u/s 8 of the Code, noticed that no suit or
Arbitration proceedings filed before receipt of notice u/s 8, they have filed this
company petition u/s 9 of IB Code for initiation of insolvency resolution process
by declaring Moratorium with consequential directions as set out under sections
13, 14, 15, and 16 of IB Code.
Objections of Uttam:
12. On the date of hearing, Senior Counsel Sri Janak Dwarak Das appearing on
behalf of Uttam raised objection to admitting this petition arguing, one - this
petition is not maintainable for the debtor company timely raised notice of dispute
within 10 days after receipt of the notice u/s 8, two - an affidavit has not been filed
as enunciated u/s 9 (3) (b) stating that there is no notice has been given by
Corporate debtor (Uttam) relating to the dispute of unpaid operational debt, hence
petition is incomplete (when reply has been given there could not be any occasion
to the operational Creditor to file an affidavit saying that no reply has been given),
three - that Deutsche & Misr Bank are not operational creditors of Uttam, four - the
petition is bound to be rejected u/s 9 (5) (ii) (d) once notice of dispute has been
received by Deutsche & Misr Bank, here notice was received by the petitioners
within 10 days from the date of receipt of notice u/s 8, five since Deutsche & Misr
Bank never initiated any recovery proceedings though the alleged debt is payable
since March 15, 2014 until this petition u/s 9 has been filed, six since disputed
questions on fact are involved in respect to Deutsche further assigning to Misr
Bank has not been confirmed by Uttam and it has to be tried by Trial Court not as
summary proceeding u/s 9, moreover since sales contract is governed by English
Law, it has to be tried before court of law, if any modification is made to the
contract, under clause 18 of the Sales Contract, it has to be with the consent of
Uttam only, seven interest on the principal amount is not admitted by Uttam,
therefore claim including 18% interest is arbitrary figure which is not substantiated
by any document, eight - the counsel argued that since Power of Attorney given
to file this case has not specifically authorized to initiate proceedings under IB
Code, it has to be dismissed basing on the order dated 30.3.2017 passed by
special Bench on reference; lastly - the counsel says Uttam is listed company
providing employment to 1400 people and it has impeccable track record, hence
this Insolvency Resolution Process cannot be thrust upon a company like this.
Discussion:
13. As to 14 days' time, we must say that this case has come for hearing within 14
days but whereas the corporate debtor itself argued several times, of course
petitioners side also argued and filed written submissions, not once, twice, indeed
first time written submissions from Uttam came before this Bench on 1St April
2017, second time submissions came on 5th April 2017, later, for there being
several issues to be addressed, this Bench also took three four days' time for
passing orders. This Bench cannot simply pass it on to some other forum saying
there are many issues to be addressed when answers to all factual aspects are
available in the material placed by the petitioners and as to legal issues, when
no evidence is required to decide those issues, we firmly believe that onus lies
upon this Bench to decide all these issues.
14. Before going into merits of the petition, two three issues one must bear in
mind, one - as such there cannot be any pleadings part in the Forms to be filed to
initiate action u/s 7, 9,& 10, except giving information column wise; two - no
pleading or defending party, the terminology like petitioner/respondent or plaintiff/
defendant is not present under this Code, most of the procedure is inbuilt in the
Code itself, therefore this has been named as Code, not as Act; three - by reading
the Code, it will not give an impression that it is an adversarial proceeding and no
such law is existing in India saying that court proceedings in India shall be
adversarial only, therefore we have to go by what law says, we can't read into
something that is not present; four - we cannot hang on to conventional approach
which has become inherent in us that a legal proceeding shall be adversarial
only, we are governed by a democratic system, henceforth we have to go by the
mandate given by legislature. There are countries where legal system is
inquisitorial. Of course a system can be something different from the existing
systems like adversarial or inquisitorial, may be, if something other than these
two systems is good, then if legislature says it is good for the country, then we
have to follow. We have to grow along with changing times to come out of
bottlenecks suffocating the system.
MUMBAI BENCH 419
Owing to the time constraint, since issues are overlapping, instead of point wise,
we have dealt with them together, which is as follows:
By now everybody is by heart with the provisions of section 7,8 9 and 10 of the
Code, therefore it is needless to say that reply has to be given to the notice under
section 8 of the code within 10 days of receipt of the notice, no doubt Uttam gave
reply on the very next day of receipt of the notice denying the averments of the
notice u/s 8, but without any averment of any suit or arbitration pending since
before receipt of notice u/s 8.
15. According to the definition of "dispute" in section 5 (6) of the Code, which is as
follows:
"Section 2: In this Part the context otherwise requires, -
(6) "dispute" includes, a suit or arbitration proceedings relating to
(a) the existence of the amount of debt;
(b) the quality of goods; or
(c) the breach of representation or warranty;"
16. On perusal of this definition, it is evident dispute includes a suit or arbitration
proceeding, now the point for determination is as to whether the word "includes"
is extensive as generally understood or in any other way. If we go through section
7, 8, 9 and 10 of this code, this word "dispute" nowhere appears except in section
8 and 9, therefore this definition primarily meant for application when notice is
issued by the operational creditor u/s 8 and when case is filed by an operational
creditor u/s 9 of the Code, therefore the definition has to be understood in a
meaningful way to cater the intent and purpose behind sections 8 & 9, not
otherwise.
17. To know how it is to be understood, we must also read part of section 8 and
section 9, which goes as follows:
"8. Insolvency resolution by operational creditor -(1) An operational creditor
may, on the occurrence of a default, deliver a demand notice of unpaid
operational debtor copy of an invoice demanding payment of the amount
involved in the default to the corporate debtor in such form and manner as may
be prescribed
(2) The corporate debtor shall, within a period of ten days of the receipt of the
notice of the operational creditor-
(a) existence of a dispute, if any, and record of the pendency of the suit or
arbitration proceedings filed before the receipt of such notice or invoice

in relation to such dispute;
"9. Application for initiation of corporate insolvency resolution process by
operational creditor-
(1) After the expiry of the period of ten days from the date of delivery of
the notice or invoice demanding payment under sub-section (1) of
section 8, if the operational creditor does not receive payment from
the corporate debtor or notice of the dispute under sub-section (2) of
section 8, the operational creditor may file an application before the
Adjudicating Authority for initiating a corporate insolvency resolution
process.
2 ............................................
3 ............................................
4 ............................................
5 ............................................
6 ............................................”
18. The corporate debtor counsel says the word dispute has to be understood as
mere denial to the claim as dispute. The definition to dispute is inclusive definition
enlarging the scope to the extent it can travel, therefore inclusion of pendency of
suit or arbitration will not curtail the inclusivity of the definition.
19. Now the test is how to understand this definition, is it to be said that wherever
denial to assertion is present in the reply within ten days, it is to be construed as
dispute? Or, is it to be understood that dispute is qualified and restricted as dispute
only when suit or arbitration is pending since before receipt of notice u/s 8?
20. In the definition, at the beginning of section 2 itself, it is mentioned that
definition has to be taken in the way it is defined as long as the context otherwise
does not require, suppose context demands to take it otherwise, this definition
will become sub-silentio in the said context, of course this definition, it is nowhere
explicitly looking that this definition is exhaustive. The word 'etc.' is also not
added to apply ejusdem generis rule.
21. If we see section 8, which is precursor to invoke section 9, it is evident that
upon notice u/s 8 from the operational creditor to the debtor on the ground of
default occurrence, if the debtor fails to reply to the notice within 10 days stating
dispute is in existence on the footing of suit or arbitration pending or if the debtor
fails to repay the unpaid debt within 10 days, then if the notice of the dispute as
stated under sub section (2) of section 8 of the code is given to the creditor and
MUMBAI BENCH 421
other compliances, the operational creditor gets cause of action to file application
u/s 9.
22. The argument of the debtor counsel is since the debtor disputed the debt
within 10 days by giving reply within 10 days to the creditors, it has to be construed
as dispute on two grounds, one the definition for dispute is inclusive, two - the
word "and" in sub section 2 (a) of section 8, has to be read as "or" so as to
harmonize with the inclusive definition to the word "dispute".
23. We respectfully disagree with this view; definition has always to be harmonized
with the context in which it is said in the substantive section, not otherwise. This
caution is very much implicit in section 2 itself saying it has to be understood as
defined unless context otherwise, therefore two things are clear, one - defining
section will not govern the substantive section, two - definition has to be construed
in the context of substantive section, not otherwise. When a word is defined, it
has to be understood meaningfully, if definition is only to say dispute includes suit
or arbitration, no definition needs to be given, because pendency of suit or
arbitration always connotes dispute, this need not be said separately, indeed
dispute is genesis, pendency of suit or arbitration is species. No doubt it is true
that word "includes" is normally considered as extensive, but there are situations
to read "includes" as "means" to enable the courts to achieve the purpose of
legislation. “If reply is given denying the claim despite default occurrence is
clear, does it mean that no application can be filed by any operational creditor
even though the operational creditor makes the case of default occurrence?
If that is so, it will be virtually ousting operational creditor filing any case
under section 9. If this scenario emerges, then it will be nothing but throwing this
law into dust bin. We all know how much time is taking for logical end to winding
up proceedings, by the time company liquidation happens, not even bones remain
to creditors. All this exercise under new Code is to maximization of value of
assets in a time bound manner to promote entrepreneurship and availability of
credit, to balance the interests of all the stake holders.
24. If we start looking at this as draconian law gobbling the companies and
branding orders under this law as harsh, then we remain where we are, perhaps
will go down further, yes, one can understand to get conversed to new law and to
see fruits of it, it will take time, but just for the sake of this reason, we cannot wish
away the mandate of this nation come through Parliament.
25. In this situation, we cannot resist ourselves from giving an illustration that is
aptly similar to the present controversy. It is like a snake charmer playing out a
cobra without fangs for entertaining people, tomorrow, if a claim under section 8
is considered as "dispute" by looking at bare denial, sections 8 and 9 will become
exactly like a cobra without fangs in the basket of a snake charmer. But I strongly
believe, it is not the idea of Parliament to make this law to mere show up, had it
been so, the Parliament would not have wasted its valuable time in including
sections 2(6), 8 and 9 in the statute book.
26. Though there are many decisions of the Hon'ble Supreme Court holding that
the word "includes" is extensive in nature, there are equally many number of
cases saying that this word has to be understood in the context it is applied.
27. In this line, in South Gujarat Roofing Tiles Manufacturers Association vs.
State of Gujarat, (1976) 4 SCC 601, it has been held that there could not be any
inflexible rule that the word "includes" should be read always as a word of
extension without reference to the context, in the said case the word includes has
been used in the sense of "means", this is only construction that the word can
bear in the context. In that sense, "include" is not a word of extension, but limitation,
it is exhaustive of the meaning which must be given to potteries industry for the
purpose of Entry
28. The use of word "includes" in the restrictive sense is not unknown. So, the
manufacturer of Mangalore Pattern Roofing Tiles is outside the purview of Entry
22.
29. Likewise, in N.D.P. Namboothiripad vs. Union of India (2007) 4 SCC 502,
it has been held that the word "includes" has different meanings in different
contexts. It can be used in interpretation clauses either generally in order to
enlarge the meaning of any word or phrase occurring in the body of a Statute, or
in the normal stand sense to mean "comprises" or "consists of" or "means and
includes depending on the context".
30. In another case in between Karnataka Power Transmission Corporation
and another vs. Ashok Iron Works Pvt. Ltd. (2009) 3 SCC Page No.240 in
para 17, it has been held as follows: -
"It goes without saying that interpretation of a word expression must depend
on the text and the context. The resort to the word "includes" by the legislature
often shows the intention of the legislature that it wanted to give extensive and
enlarged meaning to such expression. Sometimes, however, the context may
suggest that the word "includes" may have been designed to mean "means".
The setting context and object of an enactment may provide sufficient guidance
for interpretation of word "includes" for the purpose of such enactment.”
31. If we see definition to "a person" in General Clauses Act, it says "person" shall
include any company or association or body of individuals whether incorporated
or not.
32. The normal meaning of a "person" is a living person, whereas if the statute
MUMBAI BENCH 423
feels necessary to include some other categories which on their own do not fall
under a particular category, then an inclusive definition will be given to include
other categories, the same is the thing happened to the definition of "a person".
Likewise, if any dispute that normally does not fall within the definition of "dispute",
then such items not falling within the definition dispute will be shown as included
so as to enlarge the meaning of dispute. A dispute pending in a suit or arbitration
can never be said as different from the general word "dispute". The dispute in a
suit or arbitration is inherently included in the definition of the word "dispute ".
Therefore, if at all the suits and arbitration proceedings pending to be said as
included in a dispute, it need not be shown as included, because the category of
the dispute in a suit and arbitration will automatically fall within the ambit of
dispute. Henceforth, the only meaning that could be drawn out from the word
"includes" is that the dispute means the dispute pending in a suit or arbitration
proceeding, whereby in the light of the ratio given by Hon'ble Supreme Court,
here the word "includes" in the definition of "dispute" has to be read as "means"
not as "includes". So, the word dispute is qualified as the dispute in a suit or
arbitration pending not otherwise.
33. In the above discussion we have noticed what is meant by a dispute, now let
us see what is meant by the existence of dispute in sub-section 2 of section 8 of
the Code. In Section 8 it has been said when notice is given u/s 8 (1) of the Code,
the corporate debtor shall, within a period of 10 days of the receipt of demand
notice, bring it to the notice of the operational creditor that dispute is in existence
by way of suit or arbitration proceeding before the receipt of notice under Sub-
section 1 of Section 8 of the Code. If we go by this section, existence of dispute
means pendency of either suit or arbitration proceeding before the receipt of
section 8 notice from the operational creditor, it has to be understood that pending
of suit or arbitration proceeding alone will amount to existence of dispute. In
Clause (a) of Sub Section 2 of Section 8, it has been said that the corporate debtor
must bring two things to the notice of the operational creditor, one -existence of
dispute "and" record of pendency of the suit or arbitration proceeding before
receipt of section 8 notice. In point no. 1 "existence of dispute" has to be understood
as dispute pending in a suit or arbitration proceeding as mentioned in definition
to "dispute", in point No.2 "it has been said what dispute will become considered
as "existence of dispute". It can be "existence of dispute" only when pendency of
suit or arbitration proceeding in existence before receipt of notice, it does not
matter to invoke section 9 if the suit or arbitration proceeding filed subsequent to
receipt of section 8 notice. Indeed, section 8 is a cause of action section to section
9, if cause of action does not arise under section 8, no grievance could be invoked
under section 9, section 9 is an application to file a case if at all the information
that is required under section 9 is given, thereby any provision in section 9 of the
Code cannot be considered as a governing provision to find out as to any cause

of action arose for filing a case under section 9. For that reason only, in sub
section 1 of section 9, a provision is made to file an application, in sub section 2
a provision is made to file an application in such form and manner as prescribed,
in sub section 3, a provision is made to guide as to what documentation is to be
filed along with the form under sub section 1 of section 9, when it comes to sub
section 4, it is a provision enunciating to propose a resolution professional, it has
been further said when an application is to be admitted and when an application
is to be rejected, lastly in sub section 6 it has been said that insolvency resolution
process will be commenced once application is admitted under sub section 5 of
section 9. Thereby whether case is made out to file application u/s 8 is to be seen
going back to section 8 but not under section 9, whereby if at all any provision
appears inconsistent with cause of action section that is section 8, that provision
has to be read in harmony with cause of action section. Cause of action section
will never be harmonized to a procedural aspect mentioned in section 9.
34. In the given situation, this debtor company figures have gone into minus, P &L
statement as on 31st March 2016 of the company reflects profit after tax has gone
down to -1551.51crores. This company has not paid single rupee to these creditors
in the last three years, it is admitted on record millions of dollars' worth goods
purchased from them in the year 2013 by this company showing itself up as
purchaser giving all kinds of undertakings waiving right of defence. Now, it says
that these goods were delivered to some third party, not to it. It is in between the
debtor and that third party, what business these creditors have with that third
party, it does not appear in any documentation and that third party is privy to any
transaction.
35. These are the figures showing on the website of Uttam signed by Managing
Director of the company on 9th February 2017.
Reconciliation of profit between Quarter 9 months Year
Ind-AS and previous IGAAP for Ended Ended Ended
earlier periods and as at
31.03.2016
Name of Adjustments 31.12.2015 31.12.2015 31.03.2016
Net Profit as per IGAAP (424.50) (418.56) (1551.51)
Capital Incentive from 12.63 42.91 58.61

Government of Maharashtra
Other Comprehensive Income (2.33) (73.64) 489.40
Total Comprehensive Income (414.20) (449.29) (1003.50)

as per Ind-AS
MUMBAI BENCH 425
36. Nowadays, corporate world is running on credit facility, if we ask to ourselves,

how many companies are doing business with their own money, then surely it
will be negligible in number, daily many startups coming, some doing, some
failing, the reasons may be myriad. If companies are funded by creditors and
mostly run on their money, can it be said that shareholders of the company are
real owners, or creditors? Don't creditors have a right at least to realize their
money before company is fully sunk into? It is not that, every case coming to NCLT
has been allowed or every case dismissed; NCLT has been applying its judicial
discretion to find as to whether company is solvent enough to discharge its
obligations towards creditors, some admitted, some dismissed, because every
situation is fact sensitive, therefore adjudication is subject to the facts of the case.
37. In view of this, the principles and doctrines relevant in service jurisprudence
and courts dealing purely with law in issue cannot be bulldozed upon fact finding
courts, every decision turns on its facts. In Service Tribunals, mostly cases are
dealt with basing on flouting some government order of memorandum, therefore
cases filed on a particular order will logically end in the same manner, there, this
rule of following coordinate Bench order is applicable. Here it can't be seen as
strait-jacket formula to pass same order which other coordinate Bench has
passed, may be facts looking alike, but when gone into those facts some difference
will be there which changes the fate of the case. As to court of record, mostly they
decide cases either at second appellate stage or on writ side, where facts will not
have any role to play in such situations, law can't be changed from case to case,
obviously outcome may be the same.
38. The objection of the corporate debtor is that so many complexities are existing
in this dispute, for which since they have filed a suit before Hon'ble High Court of
Bombay after receipt of notice, therefore taking pendency of the suit filed
subsequent to receipt of section 8 notice, this IB petition is to be dismissed. But
the argument of the corporate debtor counsel not being in consonance with the
mandate of the statute u/s 8, this petition can't be dismissed going by the argument
of the counsel of Uttam because filing of a suit or arbitration proceedings
subsequent to receipt of notice u/s 8 will not amount to existence of dispute as
stated u/s 8 of IB Code.
39. Under any stretch of imagination, the argument of the corporate debtor counsel
does not make out any case to construe the corporate debtor filing a suit over this
claim subsequent to receipt of notice as dispute in existence, henceforth this
point is decided against the corporate debtor.
40. The corporate debtor counsel made a thumping argument saying that since
this very Bench dismissed an operational creditor case (M/s Kirusa Software Pvt.
Ltd v. M/s Mobilox Innovations Pvt. Ltd dated 27, January 2017) on the ground the
claim is disputed in the reply, it is right, it happened in the formative days when
this Code has come into existence, moreover this point that dispute means
pendency of suit or arbitration, to our remembrance, had not been argued by the
counsel of operational creditor, frankly speaking that was not noticed by us. It
does not mean a miss out in one case can become a ratio to repeat the same
mistake again and defeat the object of enactment. For this reason, is it that this
case has to be sent to Larger Bench? In corporate cases, time is money; this
Tribunal must render justice one way or other as expeditiously as possible so that
money stuck in unyielding asset can be released to fund it meaningfully. To
effectuate the objects of this code, larger picture is to be visualized.
41. The corporate debtor counsel referred an order dated March 1St 2017 passed
by NCLT Principal Bench, New Delhi in One Coat Plaster and Others vs. Ambience
Pvt. Ltd. and Mls. Shivam Construction Company and Others vs. Ambience
Pvt. Ltd. and Philips India Limited vs. Goodwill Hospital & Research Centre
Limited to say that if at all notice of dispute has been received by the operational
creditor or there is a record of dispute in the information utility the petition shall be
rejected by reading the definition of dispute as inclusive and the word "and" in
clause (a) of sub section 2 of section 8 as "or" in the light of section 9 (5) (ii) (d).
42. With all humility, we cannot agree with the submission of the corporate
debtor counsel to rely on the Coordinate Bench order because the reasoning
given in this case is based on the ratio legis enunciated in section 8 and 9.
43. Moreover, we have noticed that enough material is there to say that purchase
order is present, invoices are present, bill of lading is present, bill of exchanges
are present, on the top of all these, confirmation of forfaiting in favor of Deutsche
is present, and acknowledging further assignment of part of the debt to Misr Bank
is also present. Moreover, the debtor has not denied any of these documents
except saying English law alone is applicable. The alarming situation in this case
is, this company is consistently in losses, in fact profit after tax is showing to the
loss of 1557crores by 31stMarh 2016. If any delay is made in passing this order,
itwill become nothing but defeating the purpose and object of this Code.
44. The corporate debtor counsel argued that Special Bench at Guwahati passed
order dated 30.3.2017 stating that attorney holder exceeded his power by filing
case under section 7 of the Code basing on a power of attorney given two years
before, by the time Insolvency and Bankruptcy Code was not even contemplated.
45. At eleventh hour, the corporate debtor counsel placed an order dated 30-03-
2017 passed by Special Bench of NCLT at Guwahati on a direction given by the
Hon'ble President of NCLT to decide the matter regarding passing of different
orders in a CP 37/2017 u/s of Insolvency and Bankruptcy Code 2016 by Division
Bench, NCLT at Kolkata in relation to an issue as to whether Power of Attorney in
MUMBAI BENCH 427
question had specifically empowered Shri Srinjoy Bhattacharjeet to do variety of

acts which included the power to initiate resolution process under IB Code, 2016
as well.
46. Since this point goes to the root of maintainability, this point has also been
elaborately discussed.
47. Before going into the above decision of NCLT Guwahati, we mention that
Deutsche & Misr Bank, separately and independently have given power of attorney
to one Pankaj Sachdeva and Vandana S. Saxena on 20th September, 2016 and
11th October,2016 to ask or demand the outstanding amount from the present
corporate debtor i.e. Uttam Galva Steels Limited along with overdue interest
and costs thereon and also to file and/or defend suits, to sign and verify all the
plaints including winding up petitions, pleadings, written statements, affidavits,
petitions, objections to file execution applications to undertake proceedings,
appeals, review, revisions, writ petitions and to furnish evidence and to make
statements and to file all sorts of applications and to prosecute all legal
proceedings, memorandums of appeal, petitions and to do all other legal matters
in all the courts/tribunals including the board for Industrial and Financial
Reconstructions (BIFR) and the Appellate Authority for Industrial and Financial
Reconstruction (AAIFR), from the lowest to the highest concerning any matter in
respect of the said outstanding amount and the said petitions/appeals, to engage
advocates and technical counsel for the conduct of the proceedings for recovery,
except to settle compromise, compound or withdraw the said petition, suits,
appeals, reviews, revisions, petitions without obtaining a written consent from
the operational creditors, and to appeal in the courts, file civil or criminal review
or revisions or appeals or originals.
48. Since the corporate debtor counsel raised an objection that power of attorney
is invalid since the power of attorney has not been reflecting to initiate this
insolvency proceeding under IB Code. To find out as to whether such argument
stands in the light of the coordinate bench, the purport of the power of attorney
has been depicted to look into as to whether the power of attorney falling within
the definition given in Section 1-A of The Powers of Attorney Act 1882 and also the
ratio laid down in the order given by the coordinate Bench. The discussion below
is purely to consider as to whether the power of attorney in the present case is
valid or not.
49. By looking at the aforesaid order passed by our learned brother sitting at
Guwahati, it appears that in Kolkata Bench, one Member has stated that General
Power of Attorney was given on 20-10-2014 to initiate proceedings before any
court of law including NCLT, but this power of attorney cannot be treated as a
specific power of attorney to initiate corporate insolvency resolution process
under IB Code 2016. Since the power of attorney must be strictly construed, the
rationale behind the principle being that the powers given are not abused by the
agent and its actions are restricted within and only to the extent the power
indicated or given.
50. As against the aforesaid observation, another member of the same Bench
held that the power of attorney mentioned above clearly mentions that the legal
manager is empowered to initiate proceedings under NCLT which automatically
includes its role as an adjudicating authority under IBC. In case, this is insistent
upon in every petition under IBC, involving a financial creditor that the petition be
filed on the basis of a specific power of attorney on a board's resolution, it will
defeat the very purpose of IBC, which is for speedy resolution of insolvency
cases. He also further held that the facts of the outstanding loan and the defaults
have been established by the operational creditor and the same has not been
denied by the corporate debtor henceforth the same deserved to be admitted.
51. To say that the power of attorney in the case supra cannot be said to have
authorized the attorney to initiate a corporate insolvency resolution proceeding
u/s 7 of the Code, Guwahati Bench holds that since it is a new act coming to
existence in the year 2016 with enormous changes with a complete new regime,
therefore it can't be said that the power of attorney holder can go beyond the
covenants under power of attorney by relying upon PM DasappaNayanimVaru
vs. RamabhaktulaRamaiah (AIR 1952 Madras 559) and Coramandel International
Limited vs. Cheamcel Biotech Limited (2011) 166 Comp Cas 676 (AP High Court).
52. When this Bench has gone through PM Dasappa supra it is evident that the
donors themselves filed OS 314/1943 on the file of District Munsif of Tirupati
against Ramabhaktula, thereafter due to their inconvenience, the donors had
appointed a donee to conduct on their behalf the entire proceedings which had
to be taken in the said suit on the file of the court of the District Munsif of Tirupati,
to give effect the special power of attorney executed and delivered by them as of
consent. When District Munsif returned the plaint on the ground said suit was
beyond the pecuniary jurisdiction of that court, the plaint so returned was
represented in the subordinate judge's court, then on the contention raised by
the defendants that no power was conferred on the donee to engage an advocate
or conduct a suit in the subordinate judge's court, the said subordinate judge
dismissed the suit on which an appeal was filed wherein Hon'ble High Court
dismissed his plea stating that the document having conferred on the donee to
conduct a particular suit in a particular court, because it does not expressly
engage the attorney for the purpose of conducting the litigation generally in
respect of the plaint schedule. As there was no either explicit or implicit power to
the attorney to file before the subordinate court, if the contention raised by the
MUMBAI BENCH 429
appellant was accepted, it would be nothing but court introducing new words
into the power of attorney and confer a new power upon him. Since the plaintiff
expressly authorized the attorney to conduct particular suit in a particular court,
the Hon'ble High Court held that it could not hold that it intended to empower the
attorney to conduct that suit in any other court. In view of this reason, the appeal
was dismissed.
53. As to other judgment passed by the Hon'ble High Court of Andhra Pradesh in
Coramandel supra, the reasoning given for not considering power of attorney to
file winding of proceedings is that the power of attorney was authorized to sign
and verify plaints written statements petitions, vakalats, claims and objections
and the memorandums of all kind in any court in India but not included to file
winding-up proceedings, thereby the Hon'ble High Court has not allowed that
power of attorney to use for filing winding up proceedings on the ground that the
proceedings under 433 of the Act 1956 cannot be equated to suits or for that
matter suits for recovery of money because lis in winding up proceedings is not
merely between the petitioning party and the company sought to be wound up,
once the winding petition is admitted the creditors contributories, shareholders
etc. to seek redress in the proceedings and even oppose the winding up. It was
further held that the proceedings under Companies Act for winding up are entirely
different, a special remedy and a proceeding not to the parties alone, their range
is wide and all steps taken on winding up proceedings are in public interest.
54. The rationale behind the finding by Guwahati is, power of attorney must be
strictly construed and that the powers given are not to be abused by the agent
and his actions are restricted within and only to the extent the power is indicated
are given.
55. In the two cases relied on by Guwahati Bench, as to Madras case, the principals
had given power to the attorney to proceed with the suit already initiated by them,
they had not said to him to proceed any further beyond the said suit already filed
by them. It is purely a special power limited to a special action, therefore, that
special power could not be equated or generalized to say that the person
authorized is also empowered to file before another court of law where
proceedings would be different, therefore the special power cannot be construed
as a generalized power. It is an exclusive power given not to include any other
power. The ratio to the facts of it is correct, because the power given to the
attorney was to continue with suit initiated by the principals, not beyond it,
henceforth, the governing ratio where anybody transgresses the special power
given to them, it will be undoubtedly abuse of power. If we come to the ratio
decided in Coramandel supra, there the principle endowed upon the attorney is
the power to institute suits but not to winding proceedings, since the winding up
proceedings are by nature different with far implications, the Hon'ble High Court
has held that the power given to file suits cannot be elongated to initiate winding
up proceedings because it is not a lis between two parties, it involves other
creditors, contributors and many other stake holders including public interest.
56. In the case given to us, the creditors authorized the attorney to ask or demand
the outstanding amount from Uttam and also to initiate proceedings including
winding up proceedings before the courts/tribunals, the only power that is kept to
themselves is in the event of compromise, it has to happen with the written
consent of the creditors.
57. Now let us come to see what the definition given in The Powers of Attorney
Act says: -
"In this Act, "power-of-attorney" includes any instrument empowering a
specified person to act , or and in the name of the person executing it."
58. On reading this section, it appears that four elements are important in a
power of attorney to know as to whether any action of attorney is in excess to the
power given to him or not.
1. There shall be an instrument.
2. There shall be an empowerment to the attorney to do an act or acts.
3. Attorney shall be a specified person.
4. Such action must be for and in the name of the person executing it.
59. All these elements are present in the two powers of attorney, the only rationale
to be seen is any excess power has been exercised in moving a case under
section 9 of this code, which we have not seen anywhere.
60. Here the creditor companies, simultaneously on 20th September 2016 and
11th October 2016, empowered Mr. Pankaj & Mrs. Vandana to demand the dues
outstanding from the corporate debtor i.e. Uttam Galva Steels Limited and to
initiate legal proceedings including winding up proceedings before the courts/
tribunals, therefore the intention of the creditors is clear and their authorization is
very clear that the attorneys can initiate winding up proceedings as well. The
point for consideration is to see whether the attorneys proceeding beyond the
power given to him or not. When power was given to the attorneys to initiate
proceedings for liquidation by filing winding up petition in the months of September
and October 2016, an action under 1956 Act for winding up proceedings was very
much available, for that reason alone notice was given under section 434 of the
Act 1956, but by the time the attorneys to initiate proceedings of winding up,
winding up jurisdiction in respect to 433 (e) of the Act 1956 were metamorphosed
MUMBAI BENCH 431
into insolvency proceedings under IB Code. In a situation like this, can the
application filed under section 8 be simply rejected on the ground since winding
up proceedings have become insolvency proceeding and the authority given to
winding up proceedings cannot be considered as authority to initiate insolvency
proceedings? In fact, this insolvency proceeding against companies had originated
from 271-(1)(a) of 2013, therefore, when company is unable to pay, the party has
either to proceed under 433 & 439 of the old Act, or under new provision come in
the place of 433 (e) of the Act 1956. It is not said in the power of attorney that the
attorney holders shall proceed under the Companies Act 2013 alone or under
1956 Act, in fact the creditors categorically mentioned to initiate winding up
proceedings when the parties unable to repay the debts. It is not said by the
creditors that the attorneys shall directly file winding up proceedings, before
filing winding up proceedings, the creditors authorized the attorneys to ask or/
demand the repayment of the outstanding amount by Corporate debtor, if the
corporate debtor fails to repay, then only the creditors can initiate proceedings
under winding up. It is not that power of attorney was given years before. It is
hardly given two months before initiating this proceeding, since it is a foreign
company it will take its own time to reach this power of attorney to the attorney
holders thereafter to ask the debtor for repayment, if the debtor has failed to
repay, then to make a demand and then to give a statutory notice as envisaged u/
s 8 thereafter to initiate proceedings u/s 9 of the IB Code. All these steps will take
about 1 to 2 months to initiate proceedings under this Code. By navigating through
all these documentation, we have not seen anywhere that the attorneys
transgressed their power to initiate insolvency proceedings. A change of name
will not become change of game. This relief under section 9 of the Code was
available to the operational creditors under section 433 (e) of the Act 1956. Indeed,
the proceedings pending under section 433 (e) of the Act 1956 have been
transferred to NCLT to treat them as IB petitions. Therefore, it is not pragmatic,
especially in commercial proceedings to go back to square one and then again
initiate proceedings from the beginning. Here the debtor company is already in
losses and if at all any further delay happens, if the creditors are not in a position
to realize their dues or at least to make out something from the residue, this
process of restarting the proceedings in the name of want of authority will become
hindrance forever in realizing its debt.
61. In winding up proceedings once enquiry is done liquidator will directly be
appointed for liquidation, the better part in IB Code is there will be a resolution
process to find out as to whether a distressed company can survive if further
funds are infused, if at that juncture also, the company fails, then only the action
for liquidation will trigger. Therefore, the nature of insolvency proceedings under
IB Code cannot be seen as something different from the winding up proceedings.
Maybe it is looking new to us but the outcome is one and the same, the main
object behind insolvency proceedings for reorganization and insolvency resolution
of the companies and individuals in a time bound manner for maximization of
value of the assets of the said companies or said persons to promote
entrepreneurship availability of credit and balance of interest of all the
stakeholders. In a scenario like this, if we narrow down our perception that
company will be closed, business will go down if at all insolvency proceedings
are initiated, then it will become nothing but diluting the force of the Code.
Assuming that workers will suffer if it goes to IRP, what ultimately happens is the
company will die on its own, by that time nothing will come even to workers also,
therefore we have not seen any logic in the argument that company shall not go
to IRP.
62. When we read either the statute or a covenant between the parties, courts
will normally discover what the law or covenant is rather than to make the law or
to make the covenant, the courts will only read what a statute actually states and
will not read into the words which are not in the statute. One must not be lost sight
of that ratio legis is as important as ratio decidendi, ratio legis is rather more
important than ratio decidendi. When sovereign law was not in existence,
common law was prevalent, in those timings, destiny and direction to English
Country was the ratio decided by the courts to give certainty and predictability to
the society to run, but when law is promulgated, the bottom line for certainty and
predictability is ratio legis, when any ambiguity is there in law, if law is interpreted
in such a way so as to carry the object of the litigation, then it will become
purposive interpretation. The purposive approach is to promote the general
legislative purpose underlying the provision, but not to crucify the statutory
provision by labeling reliefs in the Code as harsh remedy.
63. In Haryana Financial Corporation and Another vs. Jagadamba Oil Mills
and another (2002) 3 SCC 496, it has been held as follows :
"Courts should not place reliance on decisions without discussing as to how
the factual situation fits into with the fact situation of the decision on which
reliance is placed. Observations of courts are not to be read as Euclid Theorems
nor as provisions of the statute. These observations must be read in the context
in which they appear. Judgments of courts are not to be construed as statues.
To interpret words, phrases and provisions of statute, it may become necessary
for judges to embark upon lengthy discussions but the discussion is meant to
explain and not to define. Judges interprets statutes they do not interpret
judgments. They interpret words of statues; their words are not to be interpreted
as statues. In London Graving Dock Co. Ltd. vs. Horton (1951) to All ER 1(HL),
Lord MacDermot observed:
MUMBAI BENCH 433
"The matter cannot, of course, be settled merely by treating ipsissimaverba of

Willes, J., as though they were part of an Act of Parliament and applying the
rules of interpretation appropriate thereto. This is not to detract from the great
weight to be given to the language actually used by that most distinguished
judge".
64. All that is said in the above finding is the words in a judgment is not to be
treated as if it were a statutory definition, it will require qualification in new
circumstances. There is always a peril in treating the words of a speech or a
judgment as if they were words in a legislative enactment and it is to be
remembered that judicial utterances are made in the setting of the facts of a
particular case, if any deviation to the statute is exfacie apparent in any judgment,
law governing a particular situation is to be taken abreast. A ratio in a judgment
cannot be torn out of context and apply it in a situation where it is not fitting.
65. Here in the present case, the power of attorney was given only two months
before filing this case mentioning what are the actions the attorney holders to
take up, against whom it is to be taken up, therefore it can’t be said that since it is
not a winding up proceeding, this power of attorney cannot be used to file
insolvency proceeding IB Code. The nature of proceedings under winding up as
well as insolvency is more or less same. The procedure is slightly different; the
object is to liquidate the assets that are owed to the creditors, as we said earlier;
in insolvency proceedings one more step taken into consideration is restructuring
which was earlier considered by SICA. If Debtor Company is unable to make
payment, what is wrong in notifying it to the public? Here the corporate debtor
has not come forward making any payment to the creditors in 180 days ‘maturity
time given. Thereafter, almost three years are over. Still this company has not
made any payment to the creditors, now has come forward making allegations
that power of attorney is not valid, bill of exchange is not valid, forfaiting to the
second creditor is not valid but it is nowhere said that the AIC has not sent the
goods to the destination ordered by this debtor in the purchase order. It is also not
the case of the debtor that goods were not reached to the destination; in fact, he
accepted bill of exchanges and thereafter confirmed the forfaiting agreement in
between the first creditor and the AIC.
66. The Counsel for the Corporate Debtor relied upon S. I. Rooplal & Another v.
Lt. Governor through Chief Secretary Delhi (2000) 1 SCC 644 that if the earlier
judgment of another coordinate bench of the same tribunal is to be held as
incorrect by subsequent Bench of the same tribunal, then it ought to have been
referred to a larger bench so that the difference of opinion between the two
coordinate benches on the same point could have been avoided. This is a
fundamental principle which every presiding officer of a judicial forum ought to
know, for consistency in interpretation of law alone can lead to public confidence
in our judicial system. This point has already been answered in the above paras.
67. The Corporate Debtor Counsel submits that Deutsche and Misr Bank do not
have any locus to maintain this petition as claim purportedly payable by the
Debtor separately is based on two separate claims by two separate claimants,
thereby this claim is defective in so much as it seems to claim two complete
distinct unconnected debts, and there is no privity of contract between Uttam and
Deutsche as much as in between Uttam and Misr Bank, besides this, the
assignment by Deutsche to Misr Bank has not been confirmed by Uttam therefore,
these two petitioners cannot be recognized as Operational Creditors within the
meaning of the Code.
68. The argument of the Corporate Debtor counsel does not stand good for two
reasons (1) the debt has been properly assigned to Deutsche and thereafter
Deutsche assigned part of the debt to Misr Bank, since the assignment of debt in
our country need not be confirmed by the Corporate Debtor, it cannot be said that
this Petition is defective, it is two Operational Creditors, who shared debt in
between, filed this Company Petition against the debt raised out of one transaction,
apart from that since it is only to initiate the insolvency resolutions process, for no
prejudice being caused to the Corporate Debtor, this Petition in any sense cannot
be treated as defective. As to doctrine of privity of contract, there need not be any
separate contract in between the Petitioners and Corporate Debtor, once that
debt is assigned to somebody else, then that third party will automatically come
into the shoes of the original operational creditor as stated in the definition to
operational creditor. Therefore, this argument of absence privity of contract between
Deutsche, Misr Bank and Uttam has no merit.
69. The Corporate Debtor Counsel has developed an argument saying that a
Petition under section 9(5)(i) of the Code could be admitted only when, inter alia,
no notice of dispute has been received by the Operational Creditor or there is no
record of dispute in the information was received. He further says Corporate
Debtor having sent a notice of dispute on 3.3.2017 itself that is within 10 days from
the date of receipt of notice, as envisaged under section 9(5)(ii)(d), the Company
Petition by an order shall be rejected.
70. This argument will remain looking plausible, if the word “dispute” is meant as
a dispute arising out of assertion and denial, but if the definition of the word
“dispute” is taken as pendency of suit or arbitration proceeding in respect to the
debt claim mentioned in the Petition, then there would not be any argument to
the Debtor Counsel to justify his arguments.
71. If we read the sections 5(6), 8 and 9 together, we can visualize the consistency.
When the word “dispute” means pendency of suit or arbitration, then “dispute in
MUMBAI BENCH 435
existence” in section 8 means suit or arbitration proceedings pending since

before the receipt of notice under section 8, on this logic, the receipt of notice of
dispute under section 9(5)(ii)(d) will obviously become a notice of dispute reflecting
pending of suit or arbitration proceedings in respect to the debt claim since
before receipt of notice under section 8 of the code. Then next point to be seen is
as to whether this understanding is advancing the purpose and object of the
Code or not. A provision has been envisaged for an Operation Creditor to initiate
Insolvency Resolution process. If section 8 mandate is understood by reading
dispute as mere assertion and denial, then no Operational Creditor can file a
petition once the Corporate Debtor sends a reply notice saying that he is denying
the claim raised by the Operational Creditor. The outcome of such situation is the
doors of IB Code will remain closed for ever to any Operational Creditor. It is quite
natural as and when operational creditor sends notice, the Corporate Debtor,
whether he is in a position to pay or not, unless colluded, will simply send a reply
saying that it is disputing the claim raised by the operational creditor. This
eventuality raises a dispute without any support of pending suit or arbitration
proceedings, which will become detrimental for enforcing the mandate of this
Code. As we already said, one should not start looking at the IB proceedings as
harsh. Here in this case, the Debtor company failed to pay for three years since
now, after three years, it is saying that Operational Creditor cannot file this case
as it remained silent from March 15, 2014. Can it be an argument to say that since
the Operational Creditors did not initiate any proceedings until before filing this
Insolvency Petition, they are not supposed to pursue the remedies available to
them before the case is hit by limitation? It can’t be like that. Therefore, this Bench
has not found any reason in the argument of the Corporate Debtor Counsel.
72. The Corporate Debtor Counsel raises another argument saying that since this
sales contract in between the Seller (AIC) and the Corporate debtor is governed
by English Law, the Petitioner cannot proceed without dealing with English law, to
which he relied upon Hari Shanker Jain v. Sonia Gandhi AIR 2001 SC 3689,
which is not relevant to the present case.
73. In a reply to the same, the Counsel for the Operational Creditors has relied
upon Malaysian International Trading Corporation vis. Megha Safe Deposit
Vault Pvt Ltd. (MANU/MH/0229/2006); Aksh Optifibre Ltd. vis. Evonik Degussa
GmbH (MANUIMH/136112014); The Bank of New York Mellon vis. Zenith Infotech
Ltd. to say that if any party says that English Law is differing from Indian Law, it is
their bounden duty to prove foreign law is contrary to Indian Law, if they failed to
prove it, it has to be presumed that Indian Law is applicable. Therefore, it is not
open to the Corporate Debtor to say that as to confirmation in relation to assignment
requires the acknowledgement of the Corporate Debtor cannot be construed as
law governing this case. Henceforth we have not noticed any merit in the argument
of Corporate Debtor. However, since Deutsche Bank is party to the proceeding,

and confirmation in respect to that assignment has been agreed upon by Uttam,
without prejudice, Deutsche can very well proceed, but this case need not go to
that extent, because the counsel of the debtor has not shown that confirmation of
assignment is a requisite under Indian law.
74. The Corporate Debtor Counsel vehemently argued that these petitioners
cannot claim interest over the operational debt by showing two Bills of Exchange
given as collaterals, he says, if it is claimed basing on Bills of Exchange along
with interest, then it would become a financial debt, not an operational debt.
75. If we go through the definition of “financial debt”, it means that a debt along
with interest is disbursed against the consideration for the time value of money
and with an inclusive list specifying as to what category of debts will become
financial debt. When it comes to operational debt, it is a claim made against the
goods supplied or services rendered. There are two types of debts, one operational
debt another financial debt, so debt has to fall either under financial debt or
operational debt, there cannot be a debt other than these two types. If it is a debt
against the company, it has to invariably fall either under financial debt or
operational debt and it has to be read as either financial debt or operational debt,
it can’t be said that a debt against company for a, b, c reasons can’t be either
financial debt or operational debt. The bottom line in respect to obligation is, a
man should repay the value, either in cash or kind, to what he has taken, for this;
we have to apply law in such a way that claimant is provided remedy. The
premise for claim is whether “A” has taken something from “B” with a promise to
pay back the value or not, if it is prima facie evident that claim has to be paid, then
to see what law is applicable to ensure that it is repaid, but not to dismiss the
claim on the ground it is not in accordance with law. Legal proposition is to be
searched and applied to promote the cause not to negate the cause. We need
not say that procedural justice is always subservient to substantial justice.
76. When we see the basic difference to financial debt and operational debt, it is
clear that financial debt is money borrowed to repay on future date along with
interest, here the money is lent for value addition to the money as agreed between
the parties, whereas operational debt is normally based on an agreement to pay
to goods or services, it does not mean that interest cannot be claimed in the times
to come, it is a normal practice that trade payables are payments deferred for a
fixed time, if the party fails to repay within the fixed time, then interest will be
claimed over operational debt as well, the same happened over here as well.
The corporate debtor himself said in the written submissions that there is email
dated April 10,2014 from the corporate debtor in respect to payment of interest,
since collaterals are Bills of exchange, even otherwise also, basing on collaterals
MUMBAI BENCH 437
entitled to interest at the rate of 18% u/s 80 of the Negotiable Instruments Act. The
difference in these two transactions is one given to get interest over the money;
second transaction happens in business operations, in both the cases money is
involved, as days go by after transaction, the time value of money will be there.
For that reason, it is nowhere said that the operational creditor is barred from
claiming interest. Suppose goods are supplied three years before, the debtor is
supposed to return in 6 months, if it is not paid in 6 months maturity period, does
it mean that since it is operational debt, the creditor cannot claim interest when
the payment is delayed beyond the time given to him? On commercial side, the
creditor claiming interest is quite normal and justifying, after all, business always
runs keeping in mind the time value of money, transaction will be operation if
payment is to goods or services, transaction is financial if money is lent in
contemplation of returns in the form of interest. Therefore, goods or services
supplied can’t be seen as not valued in terms of money, one is in kind another is
in cash, that does not mean only cash has value of money and kind has no value
of money.
77. Time value of money definition relates to the value of money in time. How
much will a rupee owned today be worth one year from now, i.e. If Rs.100 affords
a person to purchase say X amount of goods today, how many goods will he be
able to purchase with the same Rs.100, one year from now. Historically it has
been found that the value of money has depreciated over the years, i.e. in one
year from now he will be able to purchase less number of goods than X - that he
was able to purchase a year back. So this is the proposition that has to be taken
into consideration for claiming interest on the value of goods supplied. In this
case, credit has been given free of interest for 180 days, the debtor has not paid,
from the date of maturity, almost three years over, still no payment has come to
the operational creditors.
78. Let us test how far this argument is right, one - it is admittedly true Uttam
accepted two bills of exchange promising to pay the value of goods within 180
days, thereafter Uttam has not made any payment, by now more than three
years and six months are over.
79. For the reasons above and the material available on record showing
compliance under section 9 of the code, this petition is hereby admitted and
Registry is hereby directed to refer it to the Insolvency and Bankruptcy Board to
recommend the name of an IRP to appoint him in this case.
WIND-WAYS PACKAGING PRIVATE LIMITED
Name of the Corporate Debtor M/s Wind-Ways Packaging Private

Limited
Name of Operational M/s Bharat Trading Corporation

Creditor/Applicant
Company Petition No. 64/I&BP/NCLT/MB/MAH/2017

Section involved Section 8 and 9 of IBC, 2016 (Code)
Amount Involved Rs. 37,43,983

1. M/s Bharat Trading Corporation (“Operational Creditor” or “OC”) had raised
sales invoice towards supply of 18,618 kg of Fevicol for an amount of Rs.
37,43,983.
2. The OC had contended that the CD had defaulted in payment of the said
sum.
3. The OC had also contended that several sales invoices were raised during
the period between 06-01-2015 to 31-03-2016. A confirmatory e-mail
confirming the outstanding amount had also been received from the CD
on June 27, 2016. Moreover a confirmation account had also been issued
by CD on April 01, 2016.
4. The OC had issued a demand notice on February 02, 2017 to the CD
pursuant to the requirement under IBC, 2016.

A. The bench, on perusal of the documents filed by the OC and after hearing
the submissions admitted the petition.
B. Accordingly, the Bench passed the following orders:
i. Directed to propose the name of Interim Resolution Professional on
or before April 20, 2017 along with the necessary declarations.
Code.
MUMBAI BENCH 439
BEFORE THE COMPANY LAW TRIBUNAL, MUMBAI BENCH,

MUMBAI
C.P. NO. 64/I&BP/NCLT/MB/MAH/2017
CORAM:
Present: M.K. SHRAWAT Member (Judicial)
In the matter of under Section 8 and 9 of the Insolvency and Bankruptcy Code,
2016 and Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating
Authority), Rules 2016.
BETWEEN
M/s. Bharat Trading Corporation
Applicant/Operational
V/s.
M/s. Wind-Ways Packaging Pvt. Ltd.
Corporate Debtor
For Applicants: Mr. Nithish Bangera, Practising Company Secretary of the
Applicant.
For Corporate Debtor: None present.
ORDER
Heard and pronounced on 07-04-2017
1. The Petitioner is an Operational Creditor. In that capacity submitted the Petition

under consideration on 27-03-2017 under Insolvency and Bankruptcy Code 2016
(Act No. 31 of 2016) (herein below referred as The Code) before NCLT Mumbai
Branch. The “Operational Corporate Debtor” is M/s. Windways packaging Pvt.
Ltd., Hanuman Silk Mills Compound, Opp- Huma Multiplex, Off LBS Marg,
Kanjurmarg (West), Mumbai. The Petitioner/ Operational Creditor raised Sales
Invoice towards supply of 18,618 Kg. of fevicol for an amount of Rs.37,43,983/-.
As per the Petitioner the Debtor had defaulted in payment of the said amount
2. From the Petition under consideration it transpires that several Sales Invoices
were raised for the period 06-01-2015 to 31-03-2016. A confirmatory e-mail
confirming the outstanding amount of the “Corporate Debtor” is dated 27-06-
2016. A confirmation of account has also been issued on 1st April 2016 by the said
“Debtor”
3. It is affirmed by the Petitioner that the requisite condition laid down under
Section 8(1) of l&B Code 2016, has also been complied with. On 2nd February 2017
a Notice of Demand by the Operational Creditor to the Corporate Debtor, pursuant
to Rule 5 of Insolvency and Bankruptcy Code 2016, has been issued, affirmed by
an Affidavit of Service of notice placed on record.
4. In the light of the above assertions of financial transaction the Petitioner has
prima-facie established that there is an existence of “Debt” as defined under
Section 3(11) of The Code 2016.
On perusal of the documents annexed with the Petition as also after hearing the
submissions of the Ld. Representative of the Petitioner herein below it is ordered
as under:-
“ORDER”
a) The Petition is admitted as prescribed U/S 9(5) (i) of The Code for invocation
of the proceedings as prescribed.
b) The Petitioner has not proposed any name of an “Interim Resolution
Professional”. It is hereby directed to propose the name on or before 20th
April 2017, along with the Certificate that no disciplinary proceeding is
pending against proposed Resolution Professional.
c) That this Bench hereby prohibits the institution of suits or continuation of
or disposing of by the “Corporate Debtor” any of its assets or any legal
right or beneficial interest herein; any action to foreclose, recover or enforce
any security interest created by the “Corporate Debtor” in respect of its
occupied by or in the possession of the “Corporate Debtor.”
d) For further orders matter is listed on 26th Apr. 2017.
Date: 07-04- 2017.
Sd/-
M.K. SHRAWAT
MEMBER (JUDICIAL)
MUMBAI BENCH 441
M/S MURLI INDUSTRIES LIMITED
Name of the Corporate Debtor M/s Murli Industries Limited

Name of the Financial M/s Edelweiss Asset Reconstruction Co.
Creditor/Applicant Ltd.
Company Petition No. C.P. No. 66/I&BP/NCLT/MAH/ 2017

Amount involved Rs.1896.65 crores

1. M/s Murli Industries Limited (“Corporate Debtor” or “CD”) had obtained
various financial assistances for setting up/implementation of the project
and for other requirement for its operations. The lenders sanctioned term
loan and working capital facilities to the CD and CD created security by
way of hypothecation of its moveable asset and/or mortgage of its
immoveable property.
2. CD requested the lenders for debt restructuring as project under
implementation had come under strain due to various reasons.
3. Accordingly, the CD entered into a master restructuring agreement with
Bank of Baroda (Monitoring Institution) and Punjab National Bank, State
Bank of India, Punjab and Sind Bank, IDBI Bank Limited, Allahabad Bank,
Bank of Maharashtra, State Bank of Travancore, Andhra Bank and Axis
Bank Limited (Lenders) on 06.06.2011.
4. The State Bank of Mysore had disbursed Rs. 50 crores (SBM Facility I) on
31.03.2011 and defaulted amount under this facility is Rs.84,88,88,896/-.
Again, it sanctioned a sum of Rs. 3,38,49,765/- (SBM Facility-II) on
31.03.2011 and defaulted amount under this facility to Rs. 18,74,85,083/-
5. Bank of Baroda, the lead bank in the consortium arrangement issued a
notice to the CD on 02.05.2014 u/s 13(2) of the SARFESI Act, 2002 for
recovery of Rs. 1365.40 crores due to consortium bank including State
Bank of Mysore.
6. Bank of Baroda also issued a possession notice to CD on 07.03.2015

stating that a symbolic possession of the CD’s property is taken u/s 13(4) of
the SARFESI Act r/w Rule 9 of Security Interest (Enforcement) Rules 2002.
7. An independent auditor’s report by M/s Demble Ramani & Co., Charted
Accountants dated 30.05.2016 stated that the CD is in debt of Rs1896.65
as per its balance sheet as on 31.03.2016.
8. The State Bank of Mysore assigned the loans disbursed to the CD in favour
of M/s Edelweiss Asset Reconstruction Co. Ltd. (“Financial Creditor” or
“FC”) by an assignment deed dated 30.06.2014 and FC filed the present
application for the initiation of corporate insolvency resolution process.

A. On considering section 3(11), 3 (12), 5 (7) and 7 of the Code, the Bench
came to a conclusion that a prima facie case had been established that
CD has committed the default .The Bench admitted the application and
passed the following order:
i. Appointed Mr. Vijay Kumar V. Iyer as Interim Resolution Professional
ii. Declared moratorium under section 14 of the Code.
iii. Directed to cause public announcement of initiation of Corporate
Insolvency Resolution Process under section 13 of the Code.
iv. Prohibited the institution or continuation of suits or proceedings
against CD.
v. Supply of essential goods and services shall not be terminated during
moratorium period. However this doesn’t apply to transactions
notified by Central Government.
MUMBAI BENCH 443

Rule 2016)
M/s. Edelweiss Asset Reconstruction Co. Ltd
... Applicant
V/s.
M/s. Murli Industries Limited
... Respondent
Applicants' Counsel: Mr. Animesh Bisht, a/w. Mr. Gaurav Gupte, Mr. Anush
Mathkar, Ms. Neha Samant, Advocates i/b. Cyril Amarchand Mangaldas for the
Applicant.
Respondents' Counsel: None appeared.
ORDER
This is an insolvency and bankruptcy application for initiation of insolvency

resolution process by a financial creditor M/s. Edelweiss Asset Reconstruction
Co. Ltd against the corporate debtor M/s. Murli Industries Limited.
2. The corporate debtor entered into a master restructuring agreement on 06-06-
2011 with Bank of Baroda (Monitoring institution) and Punjab National Bank, State
Bank of Hyderabad, IFCI Limited, State Bank of Patiala, State Bank of India, Punjab
and Sind Bank, IDBI Bank Limited, Allahabad Bank, Bank of Maharashtra, State
Bank of Travancore, Andhra Bank and Axis Bank Limited (Lenders). The agreement
says that the corporate debtor has requested the lenders for various financial
assistance for setting up/ implementation of the project and for other requirement
for its operations. The lenders sanctioned the term loan and working capital
facilities to the corporate debtor and the corporate debtor from time to time created
security by way of hypothecation of its moveable assets and/or mortgage of its
immovable properties. The corporate debtor requested the lenders for debt
restructuring as the project under implementation has come under strain due to
various internal or external reasons. Hence, the lenders and the corporate debtor
agreed to enter into the master restructuring agreement to give effect to the
corporate debt reconstruction package.
3. The State Bank of Mysore disbursed a sum of Rs.50 crores (SBM Facility-I) on
31-03-2011 and the defaulted amount under this facility as on 28-03-2017 is
Rs.84,88,88,896/-. The same bank has sanctioned a sum of Rs.3,38,49,765/-
(SBM Facility-II) on 31st March 2011 and defaulted amount the under this facility as
on 28-03-2017 is Rs.18,74,85,083/-.
4. M/s. Bank of Baroda which is a lead bank under consortium arrangement
issued a notice to the corporate debtor on 02-05-2014 u/s. 13 (2) of the SARFAESI Act
for recovery of Rs.1365.40 crores due to the consortium banks including State Bank
of Mysore. Bank of Baroda has also issued a possession notice on 07-03-2015
stating that it has taken symbolic possession of the property owned by the corporate
debtor u/s.13(4) of the SARFAESI Act read with Rule 9 of Security Interest (Enforcement)
Rules 2002. Further, M/s. Demble Ramani & Co., Chartered Accountants in the
independent auditor's report dated 30-05-2016 has stated that the company has
defaulted in repayment of dues to financial institutions and banks amounting to
Rs.1896.65 crores as per the balance sheet as on 31-03-2016.
5. The State Bank of Mysore assigned the loans disbursed to the corporate debtor
in favour of M/s. Edelweiss Asset Reconstruction Co. Ltd. by an assignment deed
dated 30-06-2014. The Edelweiss Asset Reconstruction Company Limited in its
capacity as financial creditor filed this petition for initiation of corporate insolvency
resolution process.
6. This Petition clearly reveals that there is a debt as defined in Section 3(11) of I&B
Code 2016, and also there is default in this case within the meaning of Section
3(12) of I&B Code, 2016. Further, Section 5(7) clearly provides that an assignee of
a financial debt is also a financial creditor and hence the petition is well within
the ambit of Section 7 of I&B Code,2016.
7. The financial creditor has named one Mr. Vijaykumar V Iyer, Deloitte Touche
Tohmatsu India LLP Indiabulls Finance Centre, Tower 3, 27th Floor, Senapati Bapat
Marg, Elphinstone Road (West), Mumbai - 400 013 Email: viyer@DELOITTE.com,
Registration No. IBBI/IPA-001/IP-00526/2016-17/1370 as the proposed interim
resolution professional and the said professional vide his letter dated 29-03-
2017 agreed for his appointment and also stated that no disciplinary proceedings
pending against him.
8. On looking at the petition and in the circumstance that there is a substantial
compliance of provisions of section 7 of the IBC Code 2016, the petition is admitted
declaring moratorium with consequential directions as below: -
MUMBAI BENCH 445
moratorium period.
Passes an order for liquidation of corporate debtor under section 33, as
the case may be.
Code.
(vi) That this Bench hereby appoints Mr. Vijaykumar V Iyer, Deloitte Touche
Tohmatsu India LLP Indiabulls Finance Centre, Tower 3, 27th Floor, Senapati
Bapat Marg, Elphinstone Road (West), Mumbai-400 013 Email:
viyer@DELOITTE.com, Registration No. IBBI/IPA-001/IP-00526/2016-17/
1370 as interim resolution professional to carry the functions as mentioned
Sd/- Sd/-
V. NALLASENAPATHY B. S. PRAKASH KUMAR
GUPTA CORPORATION PRIVATE LIMITED
Name of the Corporate M/s. Gupta corporation Pvt. Ltd.

Debtor/Applicant
Company Petition No. C.P. No. 67/I & BP/NCLT/MAH/2017

Date of Order O3.04.2017
Section involved Section 10 of IBC, 2016 (Code) r/w Rule 7

of IBC (Application to Adjudicating
Authority) Rules, 2016


1. M/s Gupta Corporation Pvt. Ltd. (“Corporate Debtor” or “CD”) was
incorporated on 17.06.2005, having its registered office in Nagpur,
Mumbai. The company was incorporated with the authorized share capital
of Rs. 40 crores and paid up share capital of Rs. 37.81 crores.
2. CD filed this application under section 10 of the Code on the ground that it
had committed default in discharging its liabilities. The Board of Directors
of CD, in its meeting on 01.03.2017, resolved to initiate the proceedings
under the Code.
3. It is stated in application that CD owes an amount of Rs. 3.39 crores as
Government dues, Rs.91.89 crores to unrelated financial creditors and a
sum of Rs. 218.90 crores to financial creditors.
4. CD proposed the name of Mr. Rohit Jain as an Interim Resolution
Professional, who has given necessary declarations under the Code.

A. The Bench took the note of section 10 of the Code and the provisions of
Rule 7(1) of the IBC (Application to Adjudicating Authority) Rules, 2016.
B. The Bench also noted that CD had filed copies of the audited financial
statements for the year 2014-15, 2015-16, provisional financial statements
MUMBAI BENCH 447
as on 15.03.2017, list of assets and liabilities, amount of dues to different

financial creditors was also disclosed which clearly established that the
CD had committed default
C. It was also observed that having regard to the petition and documents
filed by the CD indicating the accumulated profit/loss, liabilities and revenue
from operations the application deserves to be admitted.
D. The Bench issued following directions:
i. Appointed Mr. Rohit Jain as an Interim Resolution Professional.
ii. Prohibited the institution or continuation of suits or proceedings
against CD.
iii. Supply of essential goods and services shall not be terminated during
moratorium period. However this doesn’t apply to transactions
notified by the Central Government.
iv. Declared a Moratorium as contemplated under section 14 of the
Code.
v. IRP was directed to cause a public announcement immediately as
contemplated under section 13 of the Code.

Rules 2016)
And
GUPTA CORPORATION PVT. LTD.
.....Corporate Debtor/ Corporate Applicant.
Applicants' Counsel : Mr. Nilesh Sharma, Mr. Ashish Pyasi, Advocates for the
Applicant.
ORDER
(Heard on 31-03-2017 & Pronounced on 03-04.2017)
This Company Petition is filed by Gupta Corporation Pvt. Ltd., u/s 10 of I &B Code
2016 r/w Rule 7 of Insolvency and Bankruptcy (Application to Adjudicating Authority)
Rules 2016 for initiation of Corporate Insolvency Resolution process.
2. The Corporate Debtor says that its registered office is at 4th floor, Gupta Tower,
Temple Road, Civil Lines, Nagpur, Maharashtra-pin code 440001, incorporated
on 17-06-2005 vide Registration No.11-154038 of 2005 on the file of Registrar of
Companies Maharashtra, having authorised share capital of Rs.40 crores and
paid up share capital of Rs.37.81 crores.
3. The Board of Directors of the Corporate Debtor in their meeting held on 01-03-
2017 authorised Mr Piyush Marodia, Director of the Company, to file necessary
application for initiation of Corporate Insolvency Resolution process under I&B
Code 2016. The Board also proposed the name of Mr. Rohit Jain, R-2, Laxmi
Nagar, Near Aath Rastha Square, Nagpur 440022 Registration No. IBBI/IPA- 002/
IP-00152/2016-17/1193, Email Id: guptas_nagpur@sancharnet.in, as interim
resolution professional, who has given his consent with a declaration that no
disciplinary proceedings are pending against him vide his letter annexed at
page No.105 and 106 of the petition.
4. The Corporate debtor provided the details of financial creditors at page
225 -226 of the petition, which reveals that, as on 15-03-2017, the debtor
Company owes a sum of Rs.3.39 crores as Government dues, Rs.91.89 crores
MUMBAI BENCH 449
to unrelated financial creditors and a sum of Rs.218.90 crores to related

financial creditors.
5. The Corporate Debtor has annexed the copies of Form disclosing creation of
charge in favour of financial creditors showing various loan facilities and charges
created in favour of the lenders. The corporate debtor has annexed the sanction
letters and renewal letters issued by the financial creditors granting various
facilities to the corporate debtor. The corporate debtor further enclosed recall
notices issued by the financial creditors demanding the payment of dues from
the Corporate debtor. The above said documents and letters clearly prove that
debt is due to financial creditors by which, default of non-payment is evident on
record. 6. The corporate debtor has also provided the copies of audited financial
statements for the years 2014-15 and 2015-16, provisional financial statements
as on 15-3-2017, list of assets and liabilities as on 15-03-2017, details of financial
and operational creditors, particulars of debt owed by the corporate debtor to
persons connected with it, details of guarantees given by other persons in relation
to the debt of the Corporate debtor. The petition also discloses the names and
addresses of members with details of their share holdings and the affidavit in
support of the petition.
7. On reading the petition and the supporting documents annexed with the petition,
this Bench is of the view that the corporate debtor has committed default in
making repayment to the creditor, hence, this Bench hereby admits this petition
filed under Section 10 of I& B Code 2016, declaring moratorium with consequential
directions as mentioned below:
moratorium period.

the case may be.
Code.
(vi) That this Bench hereby appoints, Mr. Rohit Jain, R-2, Laxmi Nagar, Near
Aath Rastha Square, Nagpur 440022 Registration No. IBBI/IPA-002/IP-
00152/2016- 17/1193, Email Id: guptas_nagpur@sancharnet.in as Interim
Insolvency & Bankruptcy Code.
(vii) Accordingly, this Petition is admitted.
Sd/- Sd/-
V. NALLASENAPATHY B. S. PRAKASH KUMAR
MUMBAI BENCH 451
SWIBER OFFSHORE (INDIA) PVT.LTD.
Name of the Corporate Debtor Swiber Offshore (India) Pvt. Ltd.
Name of the Operational Mr. Ajay Joseph, Proprietor of M/s. Global

Creditor/Applicant Marine Supply Co.

Amount involved Rs. 48.14 Lakhs

1. Mr. Ajay Joseph, Proprietor of M/s. Global Marine Supply Company
(“OperationalCreditor” or “OC”) had earlier filed a company petition no.
734 of 2016 for winding up of Swiber Offshore (India) Private Limited
(“Corporate Debtor” or “CD”) before the Hon’ble High Court of Bombay,
under the provisions of Companies Act, 1956 after giving statutory notice
u/s 433 and 434 of the Companies Act on 10.08.2016.
2. Subsequently, the company petition was transferred to NCLT, Mumbai
Bench and the OC filed Form No. 5 under the Code to initiate corporate
insolvency process for an outstanding amount of Rs. 48,14,639 with respect
to 51 invoices raised by the OC from 31.12.2015 to 19.05.2016. The OC had
enclosed copies of purchase orders and invoices.
3. The OC sent an email on 08.07.2016 describing all the invoices and
claiming the prescribed amount to which the CD replied on 12.07.2016
that it was unable to process any payment for the month of July 2016 but
it would catch up on August 2016. However, no amount was received
thereafter as well by the OC.
4. The OC also enclosed a certificate dated 08.02.2017 from their bankers
M/s. Federal Bank, Crawford Market, Mumbai, stating the OC had not yet
received any payment from the CD between 01.06.2016 to 07.02.2017.
Additionally, affidavit and statement of account were also filed.
5. OC proposed the name of Interim Resolution Professional Mr. Rajeev
Mannadiar, who gave necessary declarations under the Code.

A. The Bench took note of Section 3(11) & (12) of the Code and observed that
the application clearly reveals both debt and default. The OC had issued
notice under Section 434(1) of Companies Act, 1956 on the occurrence of
default. However, the CD had not responded to the statutory notice.
B. It was also observed that the case has been transferred from High Court
of Bombay filed under 1956 Act and in order to prove the occurrence of
default, the OC had filed invoices and also statutory notice issued under
Section 433(1)(a) of the Companies Act, 1956. Further, it was observed that
the OC is under no obligation to file an affidavit under Section 9(5)(i)(d) of
IBC owing to filing of petition under Section 439 of the Companies Act,
1956.
C. There being neither reply nor payment towards claim from the CD, the
Bench admitted the application on the basis of abovementioned grounds
and issued following directions:
i. Appointed Mr. Rajeev Mannadiar as an Interim Resolution
Professional for a period of thirty days.
Code
iii. Directed to cause a public announcement of the corporate insolvency
resolution process immediately as per the provisions of Section 13
of the Code.
MUMBAI BENCH 453

C.P. NO. 51/1 & BP/NCLT/MAH/2017
Rules 2016.
Between
Mr. Ajay Joseph
Proprietor of M/s. Global Marine Supply Co ... Applicant
V/s.
M/s. Swiber Offshore (India) Pvt. Ltd.
...Corporate Debtor
For Applicants: Mr. Sankalp Anantwar, a/w. Mr. Srinivas Atreya, i/b, India Law,
Advocates for the Applicant.
ORDER
(Heard and pronounced on 31-03-2017)
1. The Operational Creditor namely Mr. Ajay Joseph, Proprietor of M/s.Global

Marine Supply Co. has filed this Operational Creditor Petition stating that the
Corporate Debtor Company Swiber Offshore (India) Pvt. Ltd. has defaulted in
repaying a sum of Rs.48,14,639/- and hence this Petition under Section 9 of
the I&BP Code r/w Rule 6 of Insolvency and Bankruptcy (Application to
adjudicating authority) Rules, 2016 for initiation of Corporate Insolvency
Resolution process.
2. Previously, Mr. Ajay Joseph, Proprietor of M/s. Global Marine Supply Co., the
operational creditor herein, has filed company petition No.734 of 2016 for winding
up of the company before the Hon'ble High Court of Bombay, under the provisions
of Companies Act 1956 after giving statutory notice u/s 433 and 434 of the
Companies Act on 10.08.2016. Subsequently, the said company petition was
transferred to NCLT Mumbai Bench and thereupon the operational creditor has
filed Form No.5 under Insolvency and Bankruptcy Code to initiate corporate
insolvency process. This petition reveals that due outstanding from the corporate
debtor is Rs.48,14,639 in respect to 51 invoices raised by the operational creditor

from 31-12-2015 to 19-05-2016.
3. The operational creditor has enclosed the copies of Purchase Orders issued
by the corporate debtor at Page Nos.39 to 109 and the Invoices raised by the
operational creditor on the corporate debtor at Page Nos.110 to 160 of the CP.
The operational creditor has sent an email on 08-07-2016 describing all the
invoices and claiming a sum of Rs.48,14,639 from the corporate debtor,
whereas the corporate debtor, on 12-07-2016, replied that it is unable to
process any payment for the month of July 2016 but it would catch up in
August 2016. When there was no progress the corporate debtor sent several
emails to the corporate debtor demanding payment as it had also not worked
out, finally a statutory notice under section 433 and 434 of the companies act
1956 was issued by the operational creditor for which there was no reply
from the corporate debtor.
4. The operational creditor has enclosed a certificate dated 08-02-2017 from
their banker M/s. Federal Bank, Crawford Market, Mumbai, stating that the
operational creditor has not received any payment from the corporate debtor
between 01-06-2016 to 07-02-2017 in respect to the due outstanding i.e.
Rs.48,14,639 payable by the corporate debtor. The operational creditor has
also filed an affidavit in support of this application. Further, he has also filed the
statement of account from M/s. Federal Bank for the period from 01-12-2015 to
31-12-2016.
5. The Operational Creditor has named one Mr. Rajeev Mannadiar, Registration
No. IBBI/IPA-01/IP-00320/2016-17/1904, residing at Rustomjee Azziani, Flat
No.1501, 15th floor, A wing, Near Saket Complex, Majiwada, Thane (West) - 400601,
Email: mannadiarrajeev@yahoo.co.in as interim resolution person and the said
IRP in his letter dated 06-02-2017 has expressed his willingness for the
appointment and also certified that there are no disciplinary proceedings pending
against him.
6. This Petition clearly reveals that there is a debt as defined in Section 3(11) of
I&B Code 2016, and also there is default in this case within the meaning of
Section 3(12) of I&B Code, 2016. The Operational Creditor, on the occurrence of
default, issued notice u/s. 434(1) of the Companies Act, 1956 to the Corporate
Debtor on 10.08.2016 and the same was received by the Corporate Debtor on
12.08.2016. However, the corporate debtor has not responded to the statutory
notice.
7. It is a case transferred from Hon'ble High Court of Bombay filed under 1956 Act.
By looking Form No. 5, this Bench is satisfied that no payment has been made by
MUMBAI BENCH 455
the corporate debtor, that to prove the occurrence of default the Petitioner filed the
invoices and also statutory notice issued under Section 433(1)(a) of the Companies
Act, 1956 as this Petition is field under Section 439 of the Companies Act, the
Petitioner is under no obligation to file an affidavit as mentioned u/s. 9(5)(i)(d) of IB
Code, therefore, for there being neither reply nor payment towards the claim
from the corporate debtor this Bench hereby admits this petition filed under Section
9 of I & B Code, 2016, declaring moratorium with consequential directions as
mentioned below:
i. That this Bench hereby prohibits the institution of suits or continuation of
ii. That the supply of essential goods or services to the corporate debtor, if
moratorium period.
iii. That the provisions of sub-section (1) shall not apply to such transactions
iv. That the order of moratorium shall have effect from 31-03-2017 till the
the case may be.
v. That the public announcement of the corporate insolvency resolution
Code.
vi. That this Bench hereby appoints Mr.Rajeev Mannadiar , Registration No.
IBBI/IPA-01/IP-00320/2016-17/1904, residing at Rustomjee Azziani, Flat
No.1501, 15th floor, A wing, Near Saket Complex, Majiwada, Thane (West)
- 400601, Email: mannadiarrajeev@yahoo.co.in as interim resolution
professional to carry the functions as mentioned under Insolvency &

Bankruptcy Code.
Sd/- Sd/-
V. Nallasenapathy, Sd/- B.S.V. Prakash Kumar
MUMBAI BENCH 457
GUPTA ENERGY PRIVATE LIMITED
Name of the Corporate Gupta Energy Pvt. Ltd.

Debtor/Applicant



1. Gupta Energy Private Limited (“Corporate Debtor” or “CD”) filed the present
application stating that it was unable to discharge its liabilities.
2. CD had given particulars of the Financial Creditors (FCs) that reflects
outstanding dues amounting to Rs. 691.34 Crore. Its financial creditors are
Axis Bank, L&T Infrastructure Finance Co. Ltd., Bank of India, Corporation
Bank, State Bank of Mysore and State Bank of India.
3. The CD had filed a document dated 21.03.2014 disclosing that it had
approached CDR for restructuring of its debts and approving package
through a letter dated 21.03.2014.Pursuant to it, an Agreement was
executed on 28.03.2014 for restructuring between the CD and the banks
(FCs). The CD had also placed a Certificate of Registration Form disclosing
creation of charges in favour of the FCs.
4. The CD had also filed the following documents evidencing the default to
the FCs, copy of the original certificate dated 28.03.2016 filed by the Bank
of India in DRT, copy of recall notice dated 19.07.2016 issued by the State
Bank of India and copy of the minutes of the Joint Lender Forum Meetings
dated 19.10.2016 recording the accounts of the CD with the lenders become
Non-Performing Assets (NPAs).
5. The CD had also filed its audited Financial Statements for the Financial
Years ended 31.03.2016 & 31.03.2015 as prescribed under the Rules of
IBC. Further, as per the mandate under IBC to file provisional Financial
Statements prepared before filing the petition, it had also filed the Financial
Statements prepared on 28.02.2017 and the list of Assets & Liabilities as
on 28.02.2017.
6. The CD had given adequate disclosures with regard to its FCs, Operational
Creditors (“OCs”) and the amount of debt due to them and also the
particulars of the security created on the assets of the company. Despite
this, its receivables stand at Rs. 37.90 Crores and debts owed in related
party transactions at Rs. 156.48 Crores.
7. CD proposed the name of Interim Resolution Professional Mr. Charudutt
Marathe, who gave necessary declarations under the Code.

A. The Bench was satisfied with the compliances that were shown for passing
the order under Section 10 of IBC, 2016 and admitted the application.
B. The Bench further issued following directions:
i. Appointed Mr. Charudutt Marathe as an Interim Resolution
Professional for a period of thirty days to carry the functions as
mentioned under the Code.
ii. Declared Moratorium as contemplated under the Code having effect
from 21.03.2017.
iii. Direction to cause a public announcement of the corporate
insolvency resolution process immediately as per the provisions of
MUMBAI BENCH 459

C.P. NO. 433 & BP/NCLT/MAH/2017
Rules 2016)
And
GUPTA ENERGY PVT. LTD
.... Corporate Debtor/ Corporate Applicant.
Applicants' Counsel: Mr. Nilesh Sharma & Mr. Ashish Pyasi, Advocates, i/b. Dhir
& Dhir for the Applicant.
ORDER
The Applicant filed this Petition u/s.10 of the Insolvency & Bankruptcy
Code, stating that the Applicant is unable to discharge the liabilities resulting in
default in making repayments to the various Banks and the Operational Creditors
as mentioned in this Application, hence sought for declaration of Moratorium
with consequential reliefs as mentioned u/s.13, 14 and 15 of Insolvency &
2. On perusal of the Application Form and the documents thereof, it is evident that
this Petitioner has provided the names and addresses of the Directors and
Promoters of the company along with the Board Resolution dated 14.2.2017
authorizing Mr. Piyush Marodia for filing this Application.
3. The Petitioner has given particulars of the Financial Creditors showing dues
outstanding to Rs.691.34crores, out of which, Rs.23.44 crore to Axis Bank situated
at Nagpur; Rs.169.73 crore to L&T Infrastructure Finance Co. Ltd.; Rs.124.65 to
Bank of India, Rs.74.12 to Corporation Bank; Rs.73.40 crore to State Bank of Mysore;
and Rs.26.01 crore State Bank of India.
4. To prove that the aforesaid debts still exist, the Petitioner has filed a document
dated 21.3.2014 disclosing that the company had approached CDR for restructure
of its debts and approving package through a letter dated 21.3.2014, in pursuance
thereof, an Agreement was executed on 28.3.2014 for restructuring in between
the Petitioner and the Banks mentioned above. Apart from the above evidence,
the Petitioner Company has also placed a Certificate of Registration Form
disclosing creation of charges in favor of the aforesaid Banks reflecting them as
Annexure on pages 144 to 210 of the Application.
5. The Petitioner Company has also filed documents evidencing the default to the
Financial Creditors, such as copy of the original Certificate dated 28.3.2016 filed by
the Bank of India in DRT, copy of recall Notice dated 19.7.2016 issued by the State
Bank of India and copy of the minutes of Joint Lender Forum meetings dated
19.10.2016 recording the accounts of the company with the lenders become NPAs.
6. The Applicant Company has filed a letter issued by Interim Resolution
Professional Mr. Charudutt Marathe, stating that he has consented to take up this
assignment disclosing that no disciplinary proceedings pending against him.
7. To prove that default is in existence as on the date of filing the Company
Petition, the Applicant has placed books of accounts of the Corporate Debtor
showing them on pages 268 to 293 in this Petition. The Company has also filed
audited Financial Statements of the Corporate Debtor for Financial Years ended
31.3.2016 & 31.3.2015 as prescribed under the Rules of Insolvency & Bankruptcy
Code. Since Rules mandate for filing provisional Financial Statements of the
Company prepared before filing the Company Petition, the Applicant has filed the
Financial Statements prepared on 28.2.2017 likewise list of Assets & Liabilities of
the company as on date of 28.2.2017.
8. The Applicant Company has given the names and addresses of the Financial
Creditors, Operational Creditors of the company and details of dues outstanding
to them and also particulars of the security created on the Assets of the company.
Despite the details given above, the Applicant company has disclosed the debts
owed to the company as well as company owed to others reflecting receivables
as Rs.37.90crores and debts owed by the company in related party transactions
as Rs.156.48crores. The Guarantees given by the persons other than the company
to the Financial Creditors, as on 28.2.2017 have also been disclosed on page 437
of the Application. This Application further discloses that the names and addresses
of the members of the Corporate Debtor with details of respective shareholdings
and an Affidavit signed by one of the Directors of the company authorized by the
Board of Directors stating that all compliances required under law to file this
Application has been made and by saying that the statements made in this
Application are true and correct to the knowledge of him. As the Applicant has
also filed proof of payment of fee as prescribed under law, this Bench being
satisfied with the compliances that have been shown for passing the order u/s.10
of the I&B Code, 2016, this Bench admits this petition declaring Moratorium with
consequential directions as follows :
MUMBAI BENCH 461
moratorium period.
the case may be.
Code.
(vi) That this Bench hereby appoints, Mr. Charudutt Marathe, Gomed, Khare
Town, Dharampeth, Nagpur 440010, Registration No. IBBI/IPA-001/IP-
00605/2016-17/2014, Email Id: charuduttm@yahoo.co.in, as Interim
Insolvency & Bankruptcy Code.
(9. Accordingly, this Petition is admitted.
Sd/
B. S. V. PRAKASH KUMAR
Member (Judicial)
Sd/
V. NALLASENAPATHY
Member (Technical)
MARMAGOA STEEL LIMITED
Name of the Corporate Marmagoa Steel Ltd.

Debtor/Applicant


1. Marmagoa Steel Limited (“Corporate Debtor” or “CD”) has its registered
office in Goa and was incorporated on 17.07.1987, having authorised
share capital of Rs. 200 Crores and paid up share capital of Rs. 6.07
Crores.
2. Its Financial Creditors (FCs) namely, Bank of Maharashtra and Union Bank
of India, in consortium issued a notice under Section 13(2) of SARFAESI Act
stating that the account of CD was classified as non-performing asset in
accordance with the prescribed norms issued by the Reserve Bank of
India and further called upon the CD to pay Rs. 67.88 Crores to Bank of
Maharashtra and Rs. 13.63 Crores to Union Bank of India.
3. Subsequently, Union Bank of India and Bank of Maharashtra assigned
their loans and facilities disbursed to the CD in favour of Asset
Reconstruction Company (India) Limited by assignment deed dated
30.09.2014 and Pridhvi Asset Reconstruction and Securitization Company
Limited by assignment deed dated 27.03.2015 respectively.

A. The Bench observed that a scheme for revival of the sick CD was
sanctioned by the Board for Industrial and Financial Reconstruction and
the same was not successful due to various reasons. In this circumstance,
the CD has filed this application for initiating Corporate Insolvency
Resolution Process and the petition is in accordance with Section 10 of the
Code.
MUMBAI BENCH 463
B. The Bench, on perusal of the application and supporting documents, held

the view that the CD had committed default in making repayment to the
FCs and hence admitted the petition.
C. The Bench further issued following directions:
i. Appointed Mr. Pravin R. Navandar as an Interim Resolution
ii. Declared a Moratorium as contemplated under the Code having
effect from 20.03.2017.
iii. Directed to cause a public announcement of the corporate insolvency
resolution process immediately as per the provisions of Section 13
of the Code.

Rules 2016)
And
MARMAGOA STEEL LTD.
Applicants' Counsel: Mr. Nilesh Sharma, Mr. Ashish Pyasi, Advocates for the
Applicant.
ORDER
This Company Petition is filed by Marmagoa Steel Ltd., u/s 10 of I &B Code 2016 r/
w Rule 7 of Insolvency and Bankruptcy (Application to Adjudicating Authority)
2. The Corporate Debtor says that its registered office is at 280, Eclate, Curtorim,
Goa 400309, incorporated on 17th July 1987 vide Registration No.764 of 1987 on
the file of Registrar of Companies Goa, Daman & Diu, having authorised share
capital of Rs.200 crores and paid up share capital of Rs.6.07 crores.
2017 authorised Mr R.K. Radhakrishna, Managing Director of the Company to file
an application under I&B Code 2016. The Corporate debtor has proposed one Mr.
Pravin R. Navandar, D-519/520, Neelkant Business Park, Nathani Road, Vidyavihar
West, Mumbai-400086, Email id: pravin@prnco.in, Registration No. IBBI/IPS-001/
IP-P00008/2016-17/10027, as interim resolution professional, who has given his
consent with a declaration that no disciplinary proceedings are pending against
him vide his letter annexed at page No.213-214 of the petition.
4. The Corporate debtor provided the copy of audited financial statements for 2014-
15 and 2015-16, provisional financial statements as on 31-12-2016, details of the
assets of the company as on 31-03-2016 and 31-12-2016, details of secured creditors
and unsecured loans as at 31-03-2016 and 31-12-2016, list of charges registered
MUMBAI BENCH 465
with the Registrar of Companies, name and address of the Directors of the Company,
share holding pattern of the company as on 31-03-2016 and 31-12-2016. He has
also filed an affidavit as required under Insolvency & Bankruptcy Code.
5. Bank of Maharashtra and Union Bank of India in consortium, who are the
financial creditors of the corporate debtor, issued a notice under section 13(2) of
Securitization and Reconstruction of Financial Assets and Enforcement of Security
Act 2002 stating that the account of the corporate debtor was classified as non-
performing asset in accordance with the prescribed norms issued by the Reserve
Bank of India and called upon the corporate debtor to pay a sum of Rs.67,88,85,108/
-as payable to Bank of Maharashtra and a sum of Rs.13,63,42,325/-as due payable
to Union Bank of India.
6. Subsequently Union Bank of India assigned the loans and facilities disbursed
to the Corporate debtor in favour of Asset Reconstruction Company (India) Limited
by an assignment deed dated 30th September 2014. Similarly, Bank of Maharashtra
assigned the loans and facilities disbursed to the corporate debtor in favour of
Pridhvi Asset Reconstruction and Securitization Company Limited by an
assignment deed dated 27th March 2015.
7. On perusal of the record of proceedings before the Board for Industrial and
Financial Reconstruction, it reveals that a scheme for revival of the sick corporate
debtor was sanctioned by the Board and the same was not successful due to
various reasons. In the circumstance, the Corporate debtor has filed this
application for initiating corporate Insolvency Resolution Process and the petition
is in accordance with the requirements of section 10 of Insolvency & Bankruptcy
Code 2016. On reading the petition and supporting documents annexed with the
petition, this Bench is of the view that the corporate debtor has committed default
in making repayment to the creditor, hence, this Bench hereby admits this petition
filed under Section 10 of I & B Code, 2016, declaring moratorium with consequential
moratorium period.
the case may be.
Code.
(vi) That this Bench hereby appoints, Mr. Pravin R. Navandar, D-519/520,
Neelkant Business Park, Nathani Road, Vidyavihar West, Mumbai-400086,
Email id: pravin@prnco.in, Registration No. IBBI/IPS-001/IP-P00008/2016-
17/10027, as Interim Resolution Professional to carry the functions as
Sd/
Member (Judicial)
Sd/
V. NALLASENAPATHY
Member (Technical)
MUMBAI BENCH 467
JANATA CHEMICALS PVT.LTD.
Name of the Corporate Debtor Janata Chemicals Pvt. Ltd.
Name of Operational National Gas Agencies

Creditor/Applicant

Amount involved Rs. 23,14,240/-

1. National Gas Agencies, being Operational Creditor (“OC”) filed the
application under Section 9 of the Code r/w Rule 6 of Insolvency and
Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiation
of Corporate Insolvency Resolution Process against M/s Janata Chemicals
Pvt. Ltd. (“Corporate Debtor” or “CD”) since CD defaulted in repayment of
Rs. 23,14,240/-.
2. OC is engaged in the business of supply of industrial gases and alklies
products. Three (3) purchase orders were placed by CD in 2016 for
purchase of 80 ton of caustic soda. OC supplied the said material and
raised 7 bills to the extent of Rs. 23,14,240/-. In the application, OC enclosed
the bills for the same.
3. Cheque payment made by CD towards payment of the bills got
dishonoured with remarks “exceeds arrangements”. OC gave statutory
notice under Section 8 of the Code on 06.02.2017 which was received by
CD on 08.02.2017.

A. The Bench observed that on perusal of the documents filed by OC, it
transpired that the CD defaulted in making payments and accordingly, the
Bench admitted the application.
B. The Bench passed the following order:
i. Appointed Mr. Amit Gupta, CA, as the Interim Resolution Professional

(IRP).
ii. Declared Moratorium in terms of Section 14 of the Code
iii. Directed causing necessary public announcement in terms of
MUMBAI BENCH 469

Between
M/s. National Gas Agencies
... Applicant/ Operational
V/s.
M/s. Janata Chemicals Pvt. Ltd.
For Applicants : Mr. Nithish Bangera, Practising Company Secretary for the
Applicant.
For Corporate Debtor : None present.
ORDER
(Heard and pronounced on 15.03.2017)
The Operational Creditor namely National Gas Agencies has filed this Operational
Creditor Petition stating that the Corporate Debtor Company Janata Chemicals
Pvt. Ltd. has defaulted in repaying a sum of 223,14,240/- and hence this Petition
under section 8 & 9 of the I&BP Code r/w Rule 6 of Insolvency and Bankruptcy
(Application to adjudicating authority) Rules, 2016 for initiation of Corporate
Insolvency Resolution process.
2. The operational creditor says that it is engaged in the business of supply of
industrial gases and alklies products, the corporate debtor issued three purchase
orders in 2016 for purchase of 80 ton of caustic soda and the operational creditor
has supplied the said material and raised seven bills to the extent of Rs.23,14,240/
- and he has enclosed the bills on Page Nos.33 to 39 of the petition. The corporate
debtor has made cheque payments to the operational creditor on 07-11-2016,
09-11-2016, 16-11-2016 by cheques drawn on Bombay Mercantile Cooperative
Bank Ltd. for Rs.3,53,523/-, Rs.3,35,826/-, and Rs.3,32,329/- respectively and all
the cheques were dishonored with the reasons that "exceeds arrangements"
which obviously means that there was no money in the account of the corporate
debtor. Subsequently, the operational creditor has given a statutory notice under
Insolvency & Bankruptcy Code 2016 on 06-02-2016 demanding the payment of
Rs.23,14,240/- enclosing the copies of invoices and the copies of three returned
cheques.
3. The operational creditor has enclosed his bank statement for the period from
07-02-2017 to 18-02-2017 for showing that he has not received any payment
from the operational creditor. He has also filed an affidavit stating that the corporate
debtor has not raised any dispute on the existence of debt and he has not received
any communications from the corporate debtor regarding the existence of debt.
4. The Petition clearly reveals that there is a debt as defined in Section 3(11) of I&B
Code 2016, and there is default in this case within the meaning of Section 3(12) of
I&B Code, 2016. The Operational Creditor, on the occurrence of default, issued
notice u/s.8(1) to the Corporate Debtor on 06-02-2017 which was received on 08-
02-2017.
5. The Operational Creditor has named Mr. Amit Gupta, Chartered Accountant,
Address: A/701, Gundecha Symphony, Veera Desai Road, Andheri West, Mumbai
- 400 053., email: caamith.gupta@gmail.com, Registration No. IBBI/IPA-001/IP-
P00016/2016-17/10040 as Interim Resolution Professional and he has given his
consent with a certificate that there are no disciplinary proceedings pending
against him.
6. As to the Petition filed by the Operational Creditor, this Bench, on perusal of this
documents filed by the Creditor, it is evident that the Corporate Debtor defaulted
in making payments as mentioned above, the petition under sections 8 & 9 is
taken as complete, accordingly this Bench hereby admits this petition declaring
Moratorium with the directions as mentioned below:
1. That this Bench hereby prohibits the institution of suits or continuation of
2. That the supply of essential goods or services to the corporate debtor, if
MUMBAI BENCH 471

moratorium period.
3. That the provisions of sub-section (1) shall not apply to such transactions
4. That the order of moratorium shall have effect from 15.3.2017 till the
the case may be.
5. That the public announcement of the corporate insolvency resolution
Code.
6. That this Bench hereby appoints Mr. Amit Gupta, Chartered Accountant,
Address: A/701, Gundecha Symphony, Veera Desai Road, Andheri West,
Mumbai - 400 053., email: caamith.gupta@gmail.com, Registration No.
IBBI/IPA-001/IP-P00016/2016-17/10040 as interim resolution professional
to carry the functions as mentioned under Insolvency & Bankruptcy Code.
Sd/
Member (Judicial)
Sd/
V. NALLASENAPATHY
Member (Technical)
GUPTA COAL INDIA PVT. LTD.
Name of the Corporate Gupta Coal India Pvt. Ltd.

Debtor/Applicant
Company Petition No. 31/I & BP/NCLT/MAH/2017


1. Gupta Coal India Pvt. Ltd. (“Corporate Debtor” or “CD”) has its registered
office in Nagpur and has an authorized share capital of Rs. 40 crores and
paid up share capital of Rs. 32.48 crores.
2. CD filed an application under section 10 of IBC read with Rule 7 of IBC
(Application to Adjudicating Authority) ) Rules, 2016 to initiate Corporate
Insolvency Resolution Process.
3. In its application, CD gave details of the financial creditors which revealed
its total dues as on 30.12.2016 (wrongly written as 30.12.2017 in the order)
to various financial creditors to be Rs. 2580.07 crores, the breakup being
Rs. 715.85 crore to Bank of India, Rs. 321.04 crores to PNB, Rs. 563.25
crores to IDBI Bank Ltd., Rs. 246.96 crores to Allahabad Bank, Rs. 204.20
crores to Indian Overseas Bank, Rs. 145.63 crores to Union Bank of India,
Rs. 86.31 crores to Vijaya Bank, Rs. 73.77 crores to ICICI Bank, Rs. 73.74
crores to SREI Infrastructure Finance Ltd. and Rs. 149.32 crores to ICICI
Bank Ltd. (towards Bank Overdraft).

A. The Bench noted that the CD had annexed a copy of the form disclosing
creation of charge in favour of Financial Creditors showing loan facilities,
as also notice under section 13(2) of the SARFAESI Act issued by various
banks. Further, copies of the audited financial statements for the year
2014-15, 2015-16, provisional financial statements as on 13.02.2017, list
of assets and liabilities, amount of dues to different financial creditors
were also furnished which clearly established that the CD had committed
default.
MUMBAI BENCH 473
B. The Bench passed the following order:-

i. Admitted the application
ii. Declared Moratorium under Section 14 of the Code
iii. Appointed Mr. Devandra Singh, as Interim Resolution Professional
(IRP).
iv. Directed to cause Public Announcement of initiation of Corporate

BENCH, MUMBAI
C.P. NO. 31/1 & BPINCL T/MAH/2017
Rules 2016)
And
GUPTA COAL INDIA PVT. LTD
Applicants' Counsel : Mr. Nilesh Sharma, Mr. Ashich Pyasi, Advocates for the
Applicant.
ORDER
This Company Petition is filed by Gupta Coal India Pvt. Ltd., u/s 10 of I &B Code
2016 r/w Rule 7 of Insolvency and Bankruptcy (Application to Adjudicating Authority)
2. The Corporate Debtor says that its registered office is at Gupta Tower, 4th Floor
Temple Road, Civil Lines, Nagpur, Maharashtra-pin code 440001, incorporated
on 5-5-1989 vide Registration No.11-51640 of 1989 on the file of Registrar of
Companies Maharashtra, having authorised share capital of Rs.40 crores and
paid up share capital of Rs.32.48crores.
2017 authorised Mr Piyush Marodia, whole time Director and Mr. Padamesh
Duodutta Gupta, Director, either jointly or severally, to file necessary application
under I&B Code 2016. The Board also proposed Mr. Devandra Singh, ATS, Green
Paradiso, Flat No. 02054, Tower-2, Plot No. GH-03, Sector-CHI-04, Greater Noida-
201 308, Distt: Gautam Budh Nagar, Uttar Pradesh, Registration No. IBBI/IPA-002/
IP-N00001/2016-17/10001, Email Id: dev_singh2006@yahoo.com, as interim
resolution professional, who has given his consent with a declaration that no
disciplinary proceedings are pending against him vide his letter annexed at
page No.457 and 458 of the petition.
4. The Corporate debtor provided the details of financial creditors at page 36 of
MUMBAI BENCH 475
the petition, which reveals that as on 30-12-2017, it owes a sum of Rs.2580.07

crores to various banks, the breakup being Rs.715.85 crores to Bank of
India,Rs.321.04 crores to Punjab National Bank,Rs.563.25 crores to IDBI Bank Ltd.,
Rs246.96 crores to Allahabad Bank, Rs.204.20 crores to Indian Overseas Bank,
Rs.145.63 crores to Union Bank of India, Rs.86.31 crores to Vijaya Bank., Rs.73.77
crores to ICICI Bank Ltd.(CC/LC/BG), Rs.73.74 crores to SREI Infrastructure Finance
Ltd. and Rs.149.32 crores to ICICI Bank Ltd. (Towards Bank Overdraft).
created in favour of lenders. The corporate debtor has annexed the sanction
letters and renewal letters issued by the financial creditors granting various
facilities to the corporate debtor. The corporate debtor further enclosed the notice
u/s 13(2) of SARFASI Act 2002 issued by Allahabad Bank, Bank of India, ICICI Bank
Ltd., Indian Overseas Bank, IDBI Bank ltd, Punjab Nation Bank, Union of India and
Vijiya Bank. The above said documents and letters clearly prove that debt is due
to financial creditors by which, there is a default on non-payment.
6. The corporate debtor has also provided the copies of audited financial
as on 13-2-2017, list of assets and liabilities as on 13-2-17, details of financial and
operational creditors, particulars of debt owed by the corporate debtor to persons
connected with it, details of personal guarantees and corporate guarantees given
by it. The petition also discloses the names and addresses of members with
details of their share holdings and the affidavit in support of the petition.
7. On reading the petition and the supporting documents annexed with the petition
this Bench is of the view that the corporate debtor has committed a default and
the petition contains the particulars as required u/s 10 of I&B Code 2016, hence,
this Bench hereby admits this petition, declaring moratorium with consequential
moratorium period.
the case may be.
Code.
(vi) That this Bench hereby appoints, Mr. Devandra Singh, ATS, Green Paradiso,
Flat No. 02054, Tower-2, Plot No. GH-03, Sector-CHI-04, Greater Noida-
201 308, Distt: Gautam Budh Nagar, Uttar Pradesh, Registration No. IBBI/
IPA-002/IP- N00001/2016-17/10001, Email Id: devsingh2006@yahoo.com,
Sd/
Member (Judicial)
Sd/
V. NALLASENAPATHY
Member (Technical)
MUMBAI BENCH 477
FACOR STEEL LIMITED
Name of the Corporate Facor Steel Limited

Debtor/Applicant

Amount Involved Rs. 34,21,00,000 + USD 56,872.00

1. Facor Steel Limited (“Corporate Debtor or “CD”) was incorporated on
13.05.2004 with the Registrar of Companies, Maharashtra, Mumbai.
2. In the application, it was stated that the CD owes a sum of Rs. 34,21,00,000/
- to financial creditors and a sum of US $ 56,872.00 to Baltic International
Bank.
3. In order to avail financial facilities, the CD created charge over the assets
of company in favour of Bank of India, which is the lead Consortium Bank.
The above Bank issued notice under section 13(2) of SARFAESI Act on
25.07.2015 for recovery of Rs. 2836.81 lakhs with interest thereon.

A. CD filed audited financial statement for last two financial years 2014-15
and 2015-16 and provisional financial statement for current financial year
upto 31.01.2017. It also filed list of debtors and list of creditors, list of assets
and liabilities as on 31.01.2017.
B. Considering the documents placed on record, the Bench was of the opinion
that the CD had borrowed funds from consortium of banks and debtor was
unable to repay the same and that Bank of India as lead Bank in consortium
had issued notice SARFAAESI Act, which is an ample proof that CD had
committed default and that the present application deserves to be admitted.
Accordingly, it passed the following order:
i. Appointed CS Sunil Gajanan Nanal as Interim Resolution
Professional.

services to corporate debtor, as specified, shall not be terminated or
resolution process to be made immediately under section 13 and
15 of Code
MUMBAI BENCH 479

Rules 2016)
And
FACOR STEEL LIMITED
Applicants' Counsel: Mr. Omkar Deosthale, Practising Company Secretory for
the Applicant.
ORDER
The corporate debtor applicant herein M/s Facor Steel Limited has initiated
Corporate Insolvency Resolution process under Section 10 of theInsolvency and
Bankruptcy code 2016. The applicant has filed an applicationin terms of Rule 7 of
Insolvency and Bankruptcy (Application to Adjudicating Authorities) Rules 2016.
The Corporate applicant debtor was incorporated on 13.5.2004 in the name of
"Facor Steel Limited" on the file Registrar of Companies, Maharashtra, Mumbai.
The said corporate applicant debtor owes a sum of Rs.34,21,00,000/- to the
financial creditors and a sum of US $ 56,872.00 to Baltic International Bank.
2. The Corporate Debtor has created charge over the assets of the Company in
favour of Bank of India, Dwaraka Nagar, Vishaka Pattanam which is the lead
Consortium Bank and the charge is registered with the Registrar of Companies,
Maharashtra, Mumbai. The said Bank of India on 25-07-2015 issued notice u/
s.13(2) of the SARFAESI Act 2002 for recovery of Rs.2836.81 lakhs with interest
thereon and the issue of the said notice is a proof of default of debt.
The Corporate Applicant has filed the audited financial statement for the last two
financial years 2014-15 and 2015-16 and the provisional financial statement for
the current Financial year up to 31.1.2017, also filed the list of debtors and list
creditors, list of assets and liabilities as on 31.1.2017.
4. The Applicant Corporate debtor named CS Sunil Gajanan Nanal, 3-4,
Aishwarya Sankul, 17 G.A. Kulkarni Path, Opp. Joshi's Railway Museum, Kothrud,
Pune- 411038, and Reg. No. IBBI/IPA-003/IP-00040/2016-17/1735 as Interim
Resolution Professional and also submitted the written communication from the
proposed interim resolution professional that he agrees to accept the appointment
and also stated that there is no disciplinary proceedings pending against him.
5. Section 10 of the Insolvency and Bankruptcy code provides as below :
"Section 10: Initiation of corporate insolvency resolution process by
corporate applicant
(1) Where a corporate debtor has committed a default, a corporate
applicant thereof may file an application for initiating corporate
insolvency resolution process with the Adjudicating Authority,
(2) The application under sub-section (1) shall be filed in such form,
containing such particulars and in such manner and accompanied
information relating to
(a) Its books of account and such other documents relating to such
(b) The resolution professional proposed to be appointed as an
interim resolution professional.
(4) The Adjudicating Authority shall, within a period of fourteen days of
the receipt of the application, by an order:
(a) Admit the application, if it is complete; or
(b) Reject the application, if it is incomplete;
PROVIDED that Adjudicating Authority shall, before rejecting an
application, give a notice to the applicant to rectify the defects in his
application within seven days from the date of receipt of such notice
from the Adjudicating Authority.
(5) The corporate insolvency resolution process shall commence from
the date of admission of the application under sub-section (4) of this
section."
Reading of the petition filed and the documents enclosed establishes the fact that
the corporate debtor borrowed funds from consortium of banks as mentioned in
the petition, and the debtor is unable to pay the same, Bank of India as lead bank
in the consortium had issued notice under SARFAESI Act which is an ample proof
MUMBAI BENCH 481
that the corporate debtor has committed default. Further the corporate debtor
being unable to make payment to consortium banks, corporate debtor filed this
Petition.
6. Considering the above facts, this Bench is of the view that the corporate debtor
has complied with the provisions of Section 10 of Insolvency and Bankruptcy
Code and the petition is admitted declaring moratorium with consequential
moratorium period.
the case may be.
Code.
(vi) That this Bench hereby appoints CS Sunil Gajanan Nanai, 3-4, Aishwarya
Sankul, 17 G.A. Kulkarni Path, Opp. Joshi’s Railway Museum, Kothrud,
Pune- 411038, email id: sunil.nanal@kanjcs.com and Reg. No. IBBI/IPA-
003/IP-00040/2016-17/1735 as interim resolution professional to carry
the functions as mentioned under Insolvency & Bankruptcy Code.

Sd/ Sd/
MUMBAI BENCH 483
M/S. MCL GLOBAL STEEL PRIVATE LIMITED
Name of the Corporate Debtor M/s. MCL Global Steel Pvt. Ltd.
Name of the Operational M/s. Essar Projects India Ltd.

Creditor/Applicant


1. M/s. Essar Projects India Limited(“Operational Creditor” or “OC”) stated
that it had entered into a Memorandum of Understanding with M/s. MCL
Global Steel Private Limited(“Corporate Debtor” or “CD”) wherein the CD
had appointed OC to carry out civil work, structural fabrication and erection
of building and sheds as well as the erection of technological equipment
as part of construction of 0.2 MTPA Steel Melt Shop Complex at Pithampur,
Madhya Pradesh.
2. The OC had raised invoices for the works successfully completed by
30.11.2014 but a substantial amount still remains pending. A sum of Rs.
6,72,03,097 is due towards unpaid invoices and Rs. 2,38,57,691 interest
@ 18% p.a. as on 30.11.2016 aggregating to Rs. 9,10,60,788.
3. The OC had sent many letters to CD asking for the repayment and
subsequently issued a statutory notice under the Code on 28.12 2016 for
a sum of Rs. 9,26,40,255/- to which the CD replied on 03.01.2017 saying
that the contents of the notice are incorrect, misleading and therefore
denied. The CD further asserted that it seriously disputes the amount
because there is a dispute regarding quality of construction, timeline of
construction, loss due to delay in construction, work completion certificate
being not issued, outstanding bills have been not verified and satisfied
and with regard to enforceability of the Contract between them.
4. Thereafter, the OC issued a revised demand to the CD on 30.01.2017 to
pay the amount outstanding upto 30.11.2016 along with interest which
worked out to Rs. 9,10,60,788. The notice also disclosed the date of invoice,
due date, invoice number, amount outstanding, interest and total
outstanding amount.

A. The Bench, on perusal of the application and supporting documents, held
the view that there is a ‘debt’ and ‘default’ as defined under Section 3(11)
and (12) respectively of IBC.
B. The Bench observed that the CD had raised the dispute in its reply dated
03.01.2017 which was never raised before the issuance of the statutory
notice by the OC. The invoices were raised on 04.07.2014, 05.08.2014,
01.10.2014 & 10.01.2015 and the CD had not raised objections disputing
the existence of debt nor filed any civil suit or other proceedings against
the OC.
C. The Bench took note of Section 5(6) and 8 of the Code with regard to
dispute and insolvency proceeding by an operational creditor respectively
and asserted that the CD has to prove that it had already raised such
dispute either in court proceeding or arbitration proceeding before
receipt of the notice and mere mention of dispute in reply to the
notice under Section 8 of the Code will not amount to dispute in
existence. The Bench rejected the contention of ‘dispute’ stating two
reasons-
i. admission of raising invoices by the CD and
ii. raising it as dispute in the reply only after notice under Section 8 of
the Code had been issued.
D. The Bench admitted the application on the above mentioned grounds
and issued following directions:
i. Appointed CA Hashmukh Bhavanji Dedhia as an Interim Resolution
MUMBAI BENCH 485

Between
M/s. Essar Projects India Ltd.
... Applicant
V/s.
M/s. MCL Global Steel Pvt. Ltd.
For Applicants : Mr. Ankoosh Mehta Adv. a/w Adv. Aviral Sahai i/b, Cyril
Amarchand Mangaldas Advocates for the Applicant/Petitioner.
For Corporate Debtor : None present.
ORDER
1. The Operational Creditor namely Essar Projects India Ltd (EPIL) has filed this
Operational Creditor Petition stating that the Corporate Debtor Company MCL
Global Pvt. Ltd (MCL) has defaulted in repaying a sum of Rs. 9,10,60,788/- and
hence this Petition under section 8 & 9 of the I&BP Code r/w Rule 6 of Insolvency
and Bankruptcy (Application to adjudicating authority) Rules, 2016 for initiation of
Corporate Insolvency Resolution process.
2. The petitioner says that the corporate Debtor (MCL) and the Petitioner (EPIL)
entered into a Memorandum of Understanding on 27.6.2013 wherein MCL had
appointed EPIL to carry out civil work, structural fabrication and erection of building
and sheds and the erection of technological equipment as part of construction of
0.2 MTPA Steel Melt Shop Complex at Pithampur, Dist. Dhar, Madhya Pradesh.
EPIL raised invoices for the works successfully completed by November 30, 2014
which was agreed between the parties and a substantial portion of the invoice
raised currently remains outstanding. It is further stated that a sum of Rs.
6,72,03,097/- is due towards unpaid invoices and a sum of Rs. 2,38,57,691/-

interest at the rate of 18% p.a. as on 30.11.2016 aggregating to Rs. 9,10,60,788/-
The details of invoices and the amount due along with interest is enclosed as
Annexure - E to the Petition.
3. The EPIL has sent many letters to MCL asking them to make the repayment, in
furtherance of it, EPIL, on 28.12.2016, has issued a statutory notice against MCL
under the Bankruptcy Code, 2016 attaching the invoices with a demand for
repayment of a sum of Rs. 9,26,40,255/-. In response to it, MCL on 03.01.2017,
replied saying that the contents of the notice are incorrect, misleading, therefore,
denied and further added that the remedy under section 8(1) and 9 of I&BP Code,
2016 are not available to EPIL to institute corporate insolvency proceedings for the
reason that, MCL seriously disputes the amount, because there is a dispute
regarding the quality of construction, the timeline of construction, loss due to
delay in construction, work completion certificate is also not issued by MCL, apart
from this, outstanding bills have not been verified and satisfied, therefore MCL
further says, there are serious disputes about enforceability of the Contract between
them and the amount to be recovered is not admitted by MCL as alleged by EPIL,
etc. Subsequently, on 30.01.2017, EPIL sent a revised demand notice to MCL
demanding a sum of Rs. 9,10,60,788/- comprising the invoice amount Rs.
6,72,03,097/- and the interest at the rate of 18% p.a. on the dues upto 30.11.2016
which works out to Rs. 2,38,57,691/-, in total Rs. 9,10,60,788/-. The said notice
also discloses that the date of invoice, due date, invoice Number, amount
outstanding, interest and the total outstanding.
3(12) of I&B Code, 2016. The Operational Creditor, on the occurrence of default,
issued notice u/s.8(1) to the Corporate Debtor on 28.12.2016 which was received
by it on 29.12.2016. The reply of the Corporate Debtor dated 03.01.2017 has raised
the dispute, which was never raised before the issuance of the statutory notice by
the Operational Creditor. Here, it is to be noted that the invoices were raised on
04.07.2014, 05.08.2014, 01.10.2014 & 10.01.2015, and that the Corporate Debtor
has not raised objection disputing the existence of debt nor filed any civil suit or
other proceedings against the Operational Creditor in respect to the default amount
mentioned here. However, when the statutory notice u/s.8(1) was issued on
28.12.2016, the Corporate Debtor disputed the liability as mentioned supra.
5. Since the Debtor raised the dispute in the reply to notice u/s 8, let us see the
relevant provisions of Sections 5 (6) and 8 of I & B Code:
Section 5(6) provides that “dispute” includes a suit or arbitration proceedings
relating to –
MUMBAI BENCH 487

(b) the quality of goods or service; or
(c) the breach of a representation or warranty;
8(1). An operational creditor may, on the occurrence of a default, deliver a
demand notice of unpaid operational debtor copy of an invoice demanding
payment of the amount involved in the default to the corporate debtor in such
form and manner as may be prescribed.
notice of the operation creditor -
relation to such dispute.
(b) the repayment of unpaid operational debt.......“
6. The Petitioner Counsel submits, to say that dispute is in existence, mere
mentioning in the notice that dispute is in existence in relation to impugned debt
is not sufficient, the corporate debtor has to prove that the Company already
raised such dispute either in court proceeding or Arbitration before receipt of
notice u/s 8 of the Code, here no such proceeding being pending before any
court of law or in Arbitration proceeding before receipt of the notice supra, the
debtor company merely mentioning dispute in the reply to the notice u/s. 8 will
not amount to dispute in existence, hence the counsel for the petitioner prays this
Bench to admit the petition by construing no dispute is in existence against the
debtor as on the date of receipt of notice u/s. 8 of the Code.
7. Since the Corporate Debtor, as stated by the Petitioner, admitted issuing invoices
in relation to the amount mentioned, the grievance remained in the reply would
be regarding quality of construction, the timeline of construction, loss due to
delay in construction etc. Since the same is not disputed before any court of law
before receipt of notice issued u/s. 8 of the Code, the dispute raised in the corporate
debtor reply to the notice u/s. 8 of the Code cannot be treated as dispute in
existence at the time of receipt of the notice u/s 8 for two reasons, one - due to
admission of raising invoices and two - due to raising it as dispute in the reply
only after notice u/s 8 has been issued.
8. On perusal of definition of dispute u/s 5(6) and on perusal of section 8 (2)(a), it
is evident that “dispute in existence” means and includes raising dispute in court
of law or Arbitral Tribunal before receipt of notice u/s 8 of the Code.
9. The Corporate Debtor has named CA Hashmukh Bhavanji Dedhia, Level 19,
Sunshine Tower, Senapati Bapat Marg, Elphinstone Road, Mumbai -400013, Mah.
Email: hasmukh@kkc.in, Registration No.IBB/IPA-01/2016-17/64 as Interim
Resolution Professional and also obtained his consent and there are no disciplinary
proceedings pending against him.
10. As to the Petition filed by the Operational Creditor, this Bench, on perusal of
this documents filed by the Creditor, it is evident that the Corporate Debtor defaulted
in making payments as mentioned above, the disputes raised by the Corporate
Debtor are not sustainable, therefore the petition under sections 8 & 9 are taken
as complete, accordingly this Bench hereby admits this petition declaring
moratorium period.
the case may be.
Code.
6. That this Bench hereby appoints CA Hashmukh Bhavanji Dedhia, Level
19, Sunshine Tower, Senapati Bapat Marg, Elphinstone Road, Mumbai -
MUMBAI BENCH 489
400013, Mah. Email: hasmukh@kkc.in, Registration No.IBB/IPA-01/2016-

17/64 as interim resolution professional to carry the functions as
Sd/
Member (Judicial)
Sd/
V. NALLASENAPATHY
Member (Technical)
ULTRA DRYTECH ENGINEERING LTD.
Name of the Corporate Ultra Drytech Engineering Ltd.

Debtor/Applicant



1. Ultra Drytech Engineering Limited (“Corporate Debtor” or “CD”) filed the
application under Section 10 of the Code for initiation of Corporate
2. The CD has its registered office in Mumbai and was incorporated on
10.09.1986.
3. In the meeting held on 12.12.2016, the Board of Directors of the CD
authorized filing of necessary application under the Code.
4. The CD disclosed in the application that the total amount of default is Rs.
18,36,90,000/- (Rs. 18.36 crores approx.). One Sicom Investment and
Finance Ltd. had given notice under Section 138 & 141 of Negotiable
Instrument Act, 1881 calling upon the Corporate Debtor to pay Rs. 5 crores.
Canara Bank had also issued notice on 25.01.2017 calling upon corporate
debtor to pay Rs. 9.94 crores to regularise the account.

A. CD filed copies of Form disclosing creation of charge in favour of financial
creditors showing various loan facilities and charges created in favour of
lenders which clearly established that debt is due to financial creditors
and there is default in payment.
B. The CD also filed audited financial statement for last two financial years
2014-15 and 2015-16 and provisional financial statement for financial year
upto 09.02.2017. It also filed list of debtors and list of creditors, list of
assets and liabilities as on 31.01.2017.
MUMBAI BENCH 491
C. Considering the documents placed on record, the Bench was of the opinion
that the CD had committed default and the present application deserves
to be admitted. Accordingly, it passed the following order:
i. Appointed Shri Lalit Laxminarayan Bajaj as the Interim Resolution
Professional (IRP).
ii. Declared a Moratorium as contemplated under Section 14 of the
services to Corporate Debtor, as specified, shall not be terminated
or suspended or interrupted during moratorium period.
Resolution Process to be made immediately under section 13 and
15 of Code.

Rules 2016)
And
ULTRA DRYTECH ENGINEERING LTD.
.... Corporate Debtor /Corporate Applicant.
Applicants' Counsel: Mr. Yash Jariwala i/b Amir Arsiwala Advocates for the
Applicant.
ORDER
This Company Petition is filed by M/s Ultra Drytech Engineering Limited, u/s 10 of
I &B Code 2016 r/w Rule 7 of Insolvency and Bankruptcy (Application to
Adjudicating Authority) Rules 2016 for initiation of Corporate Insolvency Resolution
process.
2. The Corporate Debtor says that its registered office is at 502, 5th floor, Citi point,
Rajarshi Shahu Maharaj Road, Andheri (E), Mumbai- 400 069, incorporated on
10-09-1986 vide Registration No.11-40875 of 1994 on the file of Registrar of
Companies Maharashtra, having paid-up share capital of Rs.4,12,50,000 crores.
2016 authorised Mr. Rajive Prasad to file necessary application under I&B Code
2016. The Corporate debtor has named Mr. Lalit Laxminarayan Bajaj (Reg. No.
IBBI/IPA-001/IP-00159/2016-17/1237). Email ID lalit@llbco.in, 525, The Summit
Business Bay, Behind Guru Nanak Petrol Pump, Near W.E. Highway, Andheri (E),
Mumbai- 400 069, as interim resolution professional, who has given his consent
with a declaration that no disciplinary proceedings are pending against him vide
his letter annexed at page No.69 of the petition.
4. The Corporate debtor has disclosed that the total amount in default is Rs.
18,36,90,000/-. One Sicom Investment and Finance Ltd., financial creditor by a
letter dated 18.04.2016 given notice under section 138 & 141 of Negotiable
MUMBAI BENCH 493
Instruments Act, 1881, calling upon the corporate debtor to pay Rs. 5 crores,
failing which, criminal complaint will be filed against the corporate debtor and its
Directors. The Canara Bank, another financial Creditor issued a notice on
25.01.2017 calling upon the corporate debtor to pay Rs. 9,94,34,018/- to regularise
the account and the notice further discloses that there was an attachment from
sales tax authorities for Rs. 16,64,13,626 on the current account of the corporate
debtor.
created in favour of lenders. The above said documents and notices clearly
prove that debt is due to financial creditors by which, there is default on non-
payment.
6. The corporate debtor has also provided the copies of audited financial
as on 09-02-2017, list of assets and liabilities as on 09-02-17, details of financial
and operational creditors, details of guarantees given by other persons in relation
to the debt availed by corporate debtor. The petition also discloses the names
and addresses of members with details of their share holdings. The person
authorised by the corporate debtor to file this petition has filed an affidavit in
support of the petition as required by Insolvency and Bankruptcy (Application
adjudicating authority) Rule, 2016.
7. On reading the petition and the supporting documents annexed with the petition,
this Bench is of the view that the corporate debtor has committed default and the
petition contains the particulars as required u/s 10 of I&B Code 2016, hence, this
Bench hereby admits this Petition, declaring moratorium with consequential

moratorium period.
the case may be.
Code.
(vi) That this Bench hereby appoints, Mr. Lalit Laxminarayan Bajaj (Reg. No.
IBBI/IPA-001/IP-00159/2016-17/1237). Email ID lalit@llbco.in, 525, The
Summit Business Bay, Behind Guru Nanak Petrol Pump, Near W.E. Highway,
Andheri (E), Mumbai- 400 069, as Interim Resolution Professional to carry
the functions as mentioned under Insolvency & Bankruptcy Code.
Sd/
Member (Judicial)
Sd/
V. NALLASENAPATHY
Member (Technical)
MUMBAI BENCH 495
SHREE RAJESHWAR WEAVING MILLS PVT.LTD.
Name of the Corporate Debtor Shree Rajeshwar Weaving Mills Pvt. Ltd.
Amount involved Rs. 15,82,60,037.75

1. Shree Rajeshwar Weaving Mills Pvt. Ltd (“Corporate Debtor’’ or “CD”) has
filed the present application u/s 10 of the Code alleging its inability to
repay the debt incurred by the CD.
2. CD is indebted to Bank of India, Santacruz (W) Branch, Mumbai which
issued a notice to CD on 06.04.2016 calling upon it to pay an amount of Rs.
15,82,60,037.75 which is due and payable in respect of cash credit facility
plus interest as on 01.04.2016. Since the CD failed to repay the amount,
the present application is filed.
3. The CD gave details of two properties which were mortgaged by it to avail
the financial assistance and which have been valued totally for about Rs.
52 lakhs. The CD also filed book of accounts of CD evidencing the default.
The total default, as per the books of account, as on 31.03.2016 stood at
Rs. 15,82,60,037.75.
4. Further, the CD filed auditor’s statement for FYs 2014-15 and 2015-16 as
also provisional financial statement for the period upto 14.02.2017.

A. The Bench, considering the documents put on record, was satisfied that
the CD had defaulted in making repayment to Financial Creditor since
01.04.2016 and accordingly, it admitted the application and passed the
following order:
i. Appointed Mr. Hemant Sharma as the Interim Resolution Professional
(IRP).
ii. Declared Moratorium in terms of Section 14 of the Code.
13 of the Code.

BENCH, MUMBAI
Coram:
B.S.V. Prakash Kumar, Member (Judicial)
In the matter under Section 10 of Insolvency and Bankruptcy Code, 2016 and Rule
7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority), Rules
2016)
And
Shree Rajeshwar Weaving Mills Pvt. Ltd.
........ Corporate Debtor/Corporate Applicant.
Applicants' Counsel: Mr. Sinha Shrey, Mr. Ranit Basu, Advocates for the Applicant.
ORDER
1. The Corporate Debtor filed this Company Petition u/s. 10 of the Insolvency and
Bankruptcy Code mentioning that committed default in discharging its debts
expressing its inability to repay the debt incurred by the company as mentioned
in the Application Form filed by the Corporate Debtor herein.
2. On perusal of the Company Petition it is evident that Bank of India, Santacruz
(W) Branch, Mumbai issued a notice on 06.04.2016 calling upon the debtor
company to repay the outstanding amount of Rs.158,26,037.75 to the Bank which
is due and payable by the Debtor Company in respect to the cash credit facility
plus further interest on the outstanding dues at contractual rate at the rate of
13.2% p.a. plus penal interest at 2% p.a. with effect from 01.04.2016 with monthly
rests within seven days of receipt of the notice failing which the Bank stated they
would take legal action and proceedings against the Debtor Company.
3. As the company failed to repay the amount in default, the Petitioner filed this
application stating that the Company committed default on 01.04.2016 by not
repaying a sum of Rs.158,26,037.75 payable to the Bank of India. The Petitioner
further submits that the properties namely 701, Building - 24b, 7th Floor, Ashok
Nagar, Kalyan Road, Opp. Jain Temple, Bhiwandi, Thane, Maharashtra - 421302
valued at Rs.31,71,000 and another property at 206, Building - 24b, 2nd Floor,
Ashok Nagar, Kalyan Road, Opp. Jain Temple, Bhiwandi, Thane, Maharashtra -
421302 valued at Rs.20,59,000 have been given as security. Apart from this, the
Petitioner has filed certificate of charge of registration dated 12.08.2014. The
MUMBAI BENCH 497
Petitioner has also filed Book of accounts of the Company evidencing default to
the Creditor lying in the account bearing no.025130110000001 showing default of
Rs.49,99,923.74 as on 01.04.2016 and another account bearing no.
00400110000027 showing default of Rs.15,32,60,114.61 as on 31.03.2016, total
coming to Rs.15,82,60,037.75. The Petitioner has also filed auditor's statement of
the Corporate Debtor for the last two years i.e. F.Y. 2014-2015 and 2015-2016 and
the provisional financial statement of the Debtor Company for the Financial Year
made up to date not earlier than 14 days from the date of filing Application i.e.
14.02.2017.
4. The Petitioner filed a list of Corporate Debtor's assets and liabilities with
estimated value assigned to each categories shown in the list with valuation
date 13.02.2017 which is within 14 days from the date of filing of the Petition. The
Petitioner has given the name and address of Financial Creditor namely Bank of
India, Santacruz (W) Branch and Bank of India, Bhiwandi. The company has also
given details of the Corporate Debtor company, its Directors, its constitutional
documents including Memorandum of Association.
5. The Petitioner has given the details of Proposed Interim Resolution Professional
namely Mr. Hemant Sharma with a consent letter of him showing that no
disciplinary proceedings are pending against him.
6. By looking at all these documents this Bench is satisfied that the Petitioner has
provided all the documents that are requisite to file Form under the Insolvency
and Bankruptcy Code Rules. It seems that the Petitioner has already defaulted in
making repayment to Financial Creditor since 01.04.2016. The Petitioner has
given details of Proposed Interim Resolution Professional with a consent letter of
him showing that no disciplinary proceedings are pending against him, therefore
this Bench hereby, for the purposes referred to in section 14 of the Code, declares
moratorium over the debtor company with consequential directions as follows :
(i) That this Bench, subject to provisions of sub sections (2) & (3) of section 14
of the Code, hereby prohibits the institution of suits or continuation of
of Financial Assets and Enforcement of Security Interest Act, 2002 and the
moratorium period.
completion of the corporate insolvency resolution process as prescribed
under section 12 of the Code.
(v) That this Bench hereby directs to cause public announcement of the
corporate insolvency resolution process immediately as specified under
(vi) That this Bench hereby appoints Mr. Hemant Sharma, Chartered
Accountants with registration no. IBBI/IPA-002/IP-N00015/2016- 17/10019
having address at 2/263, Subhash Nagar, New Delhi- 110 027, as Proposed
Interim Resolution Professional to carry the functions as mentioned under
the Insolvency and Bankruptcy Code.
Sd/
Member (Judicial)
MUMBAI BENCH 499
CHHAPARIA INDUSTRIES LTD.
Name of the Corporate Chhaparia Industries Ltd.

Debtor/Applicant

1. Chhaparia Industries Ltd. (“Corporate Debtor” or “CD”) filed the present
application stating that it committed default in repaying debt amounting to
Rs. 38,35,31,000/- as on 03.02.2015.
2. It stated that it had taken financial assistance from J&K Bank which
sanctioned loan facility for an amount of Rs. 41.50 crores under different
heads.
3. On 03.02.2015, J&K Bank issued notice under Section 13(2) of the SARFAESI
Act.
4. In view of mounting losses, the CD initiated proceedings before BIFR for
declaring it as a sick company. The BIFR declared the CD, as sick company
vide reference number 48/2015.
5. J&K Bank, assigned its loan to Asset Care and Reconstruction Enterprises
Ltd (ARC Ltd) for Rs 19 Crores by transferring the loan rights over the assets
of the Corporate Debtor to ARC Ltd by executing a Deed of Assignment on
February 02, 2017 which was put to the acknowledgement of the CD on
February 03, 2017.

A. The Bench observed that CD provided the necessary details such as details
of financial creditors, operational creditors, assets and liabilities, name of
the proposed interim professional etc.
B. Accordingly, the Bench admitted the case considering the facts of the
case stated above such as default committed, reference to SARFAESI, BIFR
and subsequent assignment of debt.
C. The Bench passed the following order:

i. Declared Moratorium under Section 14 of the Code.
ii. Appointed Mr Vikram Bajaj as the Interim Resolution Professional
(IRP).
iii. Directed to cause Public Announcement immediately inviting claims.
MUMBAI BENCH 501

Coram:
B. S.V. Prakash Kumar, Member (Judicial) &
2016)
And
Chhaparia Industries Pvt. Ltd.
.... Corporate Debtor/Corporate Applicant.
Applicants' Counsel : Ms. Jyoti Singh, Ms. Smiti Verma, Advocates for the
Applicant.
ORDER
The Petitioner filed corporate debtor petition under section 10 of the Insolvency
Bankruptcy Code, stating that debtor company committed default in repaying
debt amounting to Rs.38,35,31,000/- as on 03.02.2015. The company being unable
to discharge its debts, it has sought for declaration of moratorium with
consequential directions under this Code.
1. The Petitioner has submitted that financial creditor of the company that is J & K
Bank sanctioned a loan facility for an amount of Rs.41.50 crores under different
heads with sanctioning / renewal of facilities vide letter dated 15.06.2013. As the
company failed to discharge this liability, the financial creditor, on 3.2.2015, issued
a notice u/s 13(2) of the SARFAESI Act stating that the debtor company is unable to
discharge its liability, this liability, the Petitioner has shown.
2. In lieu of the losses mounting upon the company and unable to get along, the
petitioner company initiated proceedings before BIFR for referring it as sick
company, in pursuance of it, BIFR declared the petitioner as sick company by
reference no 48/2015. Since, the company failed to discharge loan facility given
by J & K Bank, the financial creditor assigned this loan to Asset Care and
Reconstruction Enterprises Ltd. for Rs.19 crores by transferring the loan and rights
of J & K Bank over the assets of the company to ARC Ltd. on execution of deed of
assignment on 02.02.2017, which was to put to the acknowledgement of the
company on 03.02.2017.
3. In compliance of the requirements under section 10 of this Code, the Petitioner
mentioned the financial creditors details and operational creditors details along
with addresses, other correspondence and also the details of the debt raised and
the amount in default. To prove that charge has been registered before the ROC,
this debtor company filed a copy of registration of charge dated 25.09.2013 issued
by ROC, Mumbai.
4. Besides this, the debtor company filed the list of assets and liabilities with
estimated values thereof and also details of the security created against the
loans provided to the company.
5. The Petitioner has given the name of the interim insolvency resolution
professional with the consent letter of him disclosing that no disciplinary
proceedings are pending against him.
6. The Petitioner has also filed Balance Sheets prepared as on 31.01.2017 which
discloses liabilities are more than assets.
7. In view of the same this Bench hereby declares moratorium with consequential
directions as follows:
execution of any Judgment, decree or order in any court of law, tribunal,
moratorium period.
MUMBAI BENCH 503

(vi) That this Bench hereby appoints Mr. Vikram Bajaj, Chartered Accountants
with registration no. IBBI/IPA-002/IP-N00003/2016- 17/10003 having
address at 313A, Vardhaman Northex Plaza, Plot No. Fl-4, Netaji Subhash
Place, Pitampura, Delhi - 110034; also at Flat 12, Vasudha Apartments, Plot
NO.41, Sec 9, Rohini, Delhi - 110085, email - bajaj.vikram@gmail.com, as
Proposed Interim Resolution Professional to carry the functions as
mentioned under the Insolvency and Bankruptcy Code.
Sd/
Member (Judicial)
Sd/
V. NALLASENAPATHY
Member (Technical)
M/S UNIMARK REMEDIES LTD.
Name of the Corporate Debtor M/s Unimark Remedies Ltd.
Name of the Operational Ashok Alco-Chem Ltd.

Creditor/Applicant


1. Ashok Alco-Chem Limited (“Operational Creditor” or “OC”) filed the present
application under Section 9 of the Code against M/s. Unimark Remedies
Limited (“Corporate Debtor” or “CD”) for goods (chemicals) supplied by
former to the latter.
2. The claim of OC was based on invoices dated 19.02.2015, 26.02.2015,
07.03.2015, 09.04.2015, 12.04.2015 issued by OC, the sum total of which,
along with interest due as on 20.11.2016, amounted to Rs. 61,36,636/-.
3. Despite reminders, CD failed to make payment prompting the OC to issue
statutory notice under Section 433 and 434 of Companies Act, 1956. The
OC filed winding up petition on 25.11.2016 before the Hon’ble High Court,
Mumbai.
4. On coming into effect of the Code, the winding up petition was transferred
from High Court to the present Bench. The OC filed Form 5 of Code seeking
relief u/s 9 of the Code.

A. To the objection raised by CD that no notice under Section 8 of the Code
was issued, the Bench observed that since the present matter happened
to be a transferred petition from the Hon’ble High Court by virtue of
jurisdictional change from High Court to this Tribunal, there was no
requirement to issue notice under Section 8 of the Code.
MUMBAI BENCH 505
B. It was observed that the OC has furnished all the documents as required
under Section 9 of the Code read with the relevant rules.
C. Accordingly, the Bench noted that the OC has been able to show existence
of a dispute and admitted the application.
D. The Bench passed following orders:
i. Appointed Mr. Rajeev Mannadia, CA, as an Interim Resolution
Professional (IRP).
ii. Declared Moratorium as contemplated under Section 14 of the Code.
However, it was clarified that supply of essential goods or services
to Corporate Debtor, if continuing, shall not be terminated or
iii. Directed the IRP to cause Public Announcement of Corporate
Insolvency Resolution Process immediately under Section 13 and
15 of Code.

BENCH, MUMBAI
Coram: B. S.V. Prakash Kumar, Member (Judicial) & V.
Nallasenapathy, Member (Technical)
2016)
And
Ashok Alco-Chem Ltd.
Applicant
V/s.
M/s. Unimark Remedies Ltd.
Corporate Debtor
Applicants' Counsel : Sankalp Anantwan, Advocates for the Applicant.
ORDER
The Petitioner has filed this petition to initiate Insolvency Resolution Process u/s
9 of the Insolvency and Bankruptcy Code on the ground that the corporate debtor
company failed to repay the debt owed to the operational creditor herein on
invoices dated 19.2.2015, 26.2.2015, 7.3.2015, 9.4.2015, 12.4.2015 raised by the
petitioner against the debtor company for the chemicals the Petitioner supplied
to the debtor company.
2. The Petitioner has filed the copies of invoices dated 19.02.2015 for Rs. 10,67,360,
dated 26.02.2015 for Rs.10,61,996, dated 07.03.2015 for Rs.9,92,438, dated
09.04.2015 for Rs.6,97,438 and dated 12.04.2015 for 9,94,366 put together for an
amount of Rs.48,13,615 along with interest accrued upon, total amount the debtor
company defaulted to pay has come to Rs.61,36,636/- by 20.11.2016. Despite the
corporate debtor has been several times demanded to repay, it has failed to
discharge the default occurred. Then finally the creditor gave statutory notice u/s
433 and 434 of the Companies Act, 1956 for he did not reply to said statutory
notice dated 16.07.2016 issued to the Petitioner, the Petitioner filed winding up
petition on 25.11.2016 before the Hon'ble High Court, Mumbai.
MUMBAI BENCH 507
Since this case has been transferred from the Hon'ble High Court, Mumbai to this
Tribunal on jurisdiction being transferred to this Bench, the Petitioner herein filed
Form 5 of IB Rules, 2016 seeking relief u/s 9 of the Insolvency and Bankruptcy
Code. Since the Petitioner is not under obligation to issue notice u/s 8, the Petitioner
has again mentioned this Petition with Form 5 for the reliefs as mentioned under
sections 14,15 and 16 of the Code.
On the day when debtor company raised an objection saying notice was not
issued under section 8 of the Code, the Petitioner again gave a notice dated
16.02.2017 but so far no reply has come raising any objection to the debt owed by
him.
3. The Petitioner Counsel further submits that since the Petitioner gave notice
under section 434 (1) (a) of the Companies Act 1956 before filing the petition under
sections 433 and 434 of the Companies Act 1956, this debtor company could not
raise an objection stating that unless notice u/s 8 and the time 10 days mentioned
in section 8 of IB Code is given to him, this Petition could not be filed.
4. On hearing submissions from the Petitioner, we are of the view that the debtor
company could not raise such objection as this petition happens to be transferred
petition from the Hon'ble High Court by virtue of jurisdictional change from
Honourable High Court to this Tribunal.
5. On perusal of the Company Petition, the Petitioner has complied with furnishing
the documents required under section 9 of the Code r/w IB Rules such as filing
invoices reflecting the debt the corporate debtor owed to the Petitioner, giving
notice to the corporate debtor before filing winding up petition and affidavit of
service of the Petitioner saying that the corporate debtor has not raised any
dispute in relation to debt owed to the Petitioner and no dispute is in existence as
on date of filing of this Petition or subsequent to it.
6. For the reasons foregoing, this Bench is of the view that no dispute is in
existence between the financial creditor and the corporate debtor in relation to
the debt claim made in this company petition.
7. The Petitioner has furnished the details of name of the interim insolvency
resolution professional and also consent of the said professional with a disclosure
that no disciplinary proceedings pending against him.
8. In view of the reasons aforesaid, this Bench hereby declares moratorium with
consequential direction as follows.

moratorium period.
(vi) That this Bench hereby appoints Mr. Rajeev Mannadia, Chartered
Accountants with registration no. IBBI/IPA-01/IP-00320/2016- 2017/1904
having address at Rustomjee Azziano, Flat No.1501, 15th Floor, A wing,
Near Saket Complex, Majiwada Thane (W) - 400 601, email -
mannadiarrajeev@yahoo.co.in, as Proposed Interim Resolution
Professional to carry the functions as mentioned under the Insolvency
and Bankruptcy Code.
Sd/ Sd/
MUMBAI BENCH 509
STARLOG ENTERPRISES LIMITED
Name of the Corporate Debtor Starlog Enterprises Limited
Name of the Financial ICICI Bank Limited

Creditor/Applicant


Brief facts of the Case

1. ICICI Bank Limited (“Financial Creditor” or “FC”) granted Rs. 230 million,
Rupee Term Loan Facility (RTL Facility) to Starlog Enterprises Limited
(“Corporate Debtor” or “CD”). Apart from this, it also granted Rs. 160 million
Working Capital Term Loan Facility (WCTL Facility) to CD.
2. As per the FC, the default first occurred in respect of RTL Facility on 31.03.2016
and in respect of WCTL facility on 01.04.2016. The default amount as on
06.02.2017 in respect of RTL Facility has come to Rs. 9,99,01,103/- and in
respect of WCTL Facility, the default amount as on 01.04.2017 has come to
Rs. 17,78,27,162/-. Thus, the total amount of default comes to be Rs.
27,78,27,162/-.
3. FC filed certificate from ICICI (FC being Bank itself) stating that no repayment
of outstanding has been made by CD.
4. FC also filed record of CIBIL Ltd. (Credit Rating Agency) reflecting the term
loan accounts maintained by CD to have become overdue and that CD
had not paid even after 90 days past due, thus, clearly establishing that
the default has remained in existence till date.
5. The FC sent reminder letters on various dates annexing proof of receipt of
such letters. The CD, however, vide its reply dated August, 2016 and
November, 2016 confirmed the correctness of its indebtedness.

A. The Bench, considering all the documents annexed, was of the view that
the CD has failed to discharge its liability and admitted the application.
B. Accordingly, the Bench passed following order:
i. Appointed Mr. Sashank Narendra Desai, as the Interim Resolution
Professional (IRP).
ii. Declared Moratorium as contemplated under Section 14 of the Code.
iii. Directed the IRP to cause Public Announcement of Corporate
Insolvency Resolution Process immediately under Section 13 and
15 of Code.
MUMBAI BENCH 511

BENCH, MUMBAI
C.P. No.12/1 & BP/NCLT/MAH/2017
Coram:
In the matter of Section 7 of the Insolvency and Bankruptcy Code, 2016 read
Rules, 2016.
In the matter of:
Starlog Enterprises Limited
And in the matter of :
ICICI Bank Limited, a Public Company incorporated under the Companies Act,
1956 and a Banking Company within the meaning of the banking Regulation Act,
1949, having its registered office at "Landmark", Race Course Circle, Vadodara -
390007 and its corporate office at ICICI Bank Towers, Bandra-Kurla Complex,
Mumbai - 400051
... Applicant/Financial Creditor
Applicants' Counsel: Mr. Shyam Kapadia, Ms. Shreevandhini Parchure and Ms.
Isha Maniar, Advocates for the Applicant.
ORDER
The petitioner i.e., ICICI Bank, having failed to realize outstanding dues from the
Corporate Debtor i.e., Starlog Enterprises Limited in respect to the loan facilities
the petitioner granted, filed this petition u/s 7 of The Insolvency and Bankruptcy
Code 2016(herein after referred as "Code"), seeking for admission of this petition
declaring moratorium on the Corporate Debtor Company, direction for public
announcement of initiation of corporate insolvency process and call for the
submission of claims u/s 15 and appointment of interim resolution professional
as prescribed under the Code and Rules thereon.
2. The Petitioner, Financial Creditor, granted Rs.230 million Rupee Term Loan
facility (RTL Facility) on an agreement entered on October 19,2011, thereafter
disbursed the same, apart from this, this petitioner also granted Rs.160 million
Working Capital Term Loan Facility (WCTL Facility) on an agreement dated March
2014 and disbursed the same on March 6,2014.
3. Besides the above two facilities, this petitioner already granted Rs.20.4million
Working Capital Bank Guarantee facility (BG Facility) basing on facility agreement
dated October 27,2007 with utilization date as February 02,2017.
4. The petitioner says since no amounts are due under BG Facility, the amount of
BG Facility has not been included in this petition by reserving its right to proceed
later, as to WCTL facility, the defaults first occurred in respect to RTL Facility on 31st
March 2016 and in respect to WCTL facility on 1st April 2016 respectively. For the
Corporate Debtor having failed to repay the out-standings as agreed in the
Agreements mentioned above, in respect to RTL Facility, the amount, as on February
06,2017, defaulted has come to Rs.9,99,01,103.62, and in respect to WCTL Facility,
the amount, as on April 01, 2017, defaulted has come to Rs.17,78, 27,162.00.
therefore, these two amounts (principal + Interest + Overdue) put together has
come to Rs.27,78,27,162.00 (Annexur-2).
5. The Petitioner filed Certificate dated issued by ICICI (the Petitioner, being a
Bank, Account has been maintained in the petitioner Bank itself) stating that
copies of entries in accordance with the Bankers Books Evidence Act, regarding
the statement of accounts of Starlog Enterprises Ltd. bearing Term Loan Account
A115508001 for the period October 19, 2011 to February 07, 2017 and Term Loan
Account No. 0000001101 for the period March 06,2014 to February 07,2017, are
annexed. And they are true and correct extract of the Ledger and the entries
therein made in ordinary and usual course of business and the ledger is still in
the custody of the petitioner Bank. To substantiate the certificate given by the
petitioner Bank, the petitioner filed statements of both the Loan Accounts reflecting
default occurred in two Term Loan accounts above mentioned for an amount of
Rs.17.77crores and Rs.9.99crores aggregating to around Rs.27.77crores.
6. Apart from the filings above mentioned, the Petitioner filed record of CIBIL Ltd.
(Credit Rating Agency) reflecting the aforesaid two term loan accounts maintained
by corporate debtor with numbers A115508001 and 0000001101 have become
overdue and not paid even after 90 days past due, by which, it is evident that the
Corporate Debtor defaulted making payments and the default has remained in
existence till date. Though Information Utility Center has not yet come into
existence so far, for there being a proof from Credit Information Agency bearing
out default occurred in respect to the Accounts the company held with the petitioner
Bank, this Bench hereby holds that the default above has been reflected in the
credit agency books.
7. To further substantiate that the corporate debtor has been reminded of the fact
of occurrence of default, the Petitioner has also filed the correspondence dated
MUMBAI BENCH 513
July 09,2015, August 19, 2015, September 11,2015, August 18,2016 and final notice
dated February 06,2017 demanding payment of dues, failing which, the company
would take recourse for remedial measures. To which, the Corporate Debtor, on
August 20,2016 and on November 22,2016, responded to the notices given before
November 22,2016 confirming the correctness of their indebtedness seeking
extension of time for taking legal action for recovery. Thereafter, for the petitioner
stated that the Corporate Debtor failed to discharge the liability till the date of filing
this petition, this Bench believes that the corporate debtor committed default and
it has remained in existence till date.
8. The petitioner filed proof of service showing that notice has been served upon
the corporate debtor before filing this petition i.e., on 08.02.2017.
9. Looking at the Petition filed by the Financial Creditor u/s 7 of I &B Code, for this
Bench being satisfied that the Corporate Debtor failed to discharge the liability
mentioned in this Company Petition resulting occurrence of default for an amount
of around Rs.27.77crores, this Bench admits this petition u/s 7 of the Code
declaring moratorium for the purposes referred to in section 14 of the Code with
following directions:
moratorium period.
(vi) That this Bench hereby appoints Mr. Sashank Narendra Desai, M/s Desai
Saksena & Associates (Charted Accountants) Laxmi Building, 1st Floor, Sir
P.M. Road, Fort, Mumbai - 400001, Email: snd@dsaca.co.in with registration
no. IBBI/IPA-01/IP-00072/2016-17/1082 as Interim Resolution Professional
(vii) That this Bench hereby directs the Registry of NCLT, Mumbai to
communicate this order to the petitioner i.e., financial creditor and the
corporate debtor.
Accordingly, this petition is admitted.
Sd/
Member (Judicial)
Sd/
V. NALLASENAPATHY
Member (Technical)
MUMBAI BENCH 515
MIDAS TOUCHEXPORT PRIVATE LIMITED
Name of the Corporate Debtor Midas Touch Export Pvt. Ltd.
Name of the Operational Shyam Indofab Private Limited

Creditor/Applicant
Company Petition No. CP No. 16/I&BP/NCLT/MB/MAH/2017


Amount involved Rs. 15.40 Lakhs

1. Shyam Indofab Private Limited (“Operational Creditor” or “OC”) made cloth
supplies to Midas Touch Export Private Limited (“Corporate Debtor” or “CD”)
pursuant to purchase orders made by the CD. The value of the goods
supplied from 12.10.2015 up to 19.02.2016 amounts to Rs. 47, 64, 035/-
out of which Rs. 32,23,564/- had been paid till 10th March 2016 and the
remaining amount of Rs. 15,40,471 is still outstanding.
2. In an exchange of emails, the OC had demanded the payment of the
outstanding amount and the CD replied saying that it is not doing well and
hence requesting them not to present cheques.
3. The OC issued notice under Section 434(1)(a) of the Companies Act, 1956
on 25.10.2016 to which the CD replied by email saying that the payments
were held up due to labour problems and internal disruptions
4. Thereafter, the OC issued another statutory notice under Section 8 of the
Code to the CD on 10.01.2017 to repay the outstanding amount. No reply
had been received from the CD against the issued notice.
5. The OC had filed the following documents in its application - invoices
reflecting the supplies made by the CD and Bank statement reflecting
payments that were made by the CD and also showing that no payment
had been received post 10.03.2017.
6. The OC had also submitted that he has two bank accounts namely, Bank
of India and IDBI and had filed separate certificates issued by both the
banks certifying that there is no entry of credit/payment from the CD after

10.03.2016.

A. The Bench, on perusal of the petition and supporting documents, held the
view that the CD had committed default in making repayment to the OCs
and hence admitted the petition.
B. The Bench further issued following directions:
i. Appointed Mr. Romesh Chander Sawhney as an Interim Resolution
MUMBAI BENCH 517

BENCH, MUMBAI
(C.P. NO. 16/1 & BP/NCLT/MB/MAH/2017)
IN THE MATTER OF INSOLVENCY AND BANKRUPTCY CODE, 2016
SECTION 9
Coram :
IN THE MATTER OF
SHYAM INDOFAB PRIVATE LTD.
...OPERATIONAL CREDITOR
Versus
MIDAS TOUCH EXPORT PRIVATE LTD.
...CORPORATE DEBTOR
Petitioner Counsel : Advocate Mr. Arun Saxena
ORDER
(Heard & Pronounced on : 17.02.2017)
1. The Petitioner, operational creditor namely a company called Shy am Indofab

Private Limited, for having failed to receive payments to the supplies made to
the corporate debtor, i.e., Midas Touch Export Pvt. Ltd. (herein after called as
Debtor Company) resulting occurrence of default in making payments, has
filed this petition u/s 9 of Insolvency and Bankruptcy Code (herein after called
as "Code") seeking for admission of this petition declaring moratorium on the
Corporate Debtor Company, direction for public announcement of initiation of
corporate insolvency process and call for the submission of claims u/s 15 and
appointment of interim resolution professional as prescribed under the Code
and Rules thereon.
2. The Petitioner made cloth supplies to the debtor company pursuant to
purchase orders made by the debtor company, the same is reflecting in the
books of accounts of the Petitioner. The value of goods supplied by operational
creditor to the debtor company commencing from 12.10.2015 up to 19.02.2016
culminates into consideration for Rs.47,64,035/-, out of which, the repayment
made by the debtor company to the Petitioner till 10th March, 2016 is
Rs.32,23,564. The Petitioner filed invoices showing supplies made by the
Petitioner to the debtor company, likewise he also filed the details disclosing
the debtor company repaying Rs.32,23564 until 10th March, 2016 out of total
Rs.47,64,035. The last payment received from corporate debtor was Rs.2,26,006
through a cheque bearing number 697963, ever since no payment has come
to the Petitioner except exchange of emails - the Petitioner demanding
repayment and the debtor company replying the company is not doing well,
hence requesting not to present cheques. This has not made any difference to
the repayment that is to be done to the Petitioner. Thereafter the debtor company
since 10th March, 2016 has not paid anything to the operational creditor, the
debtor company has remained under obligation to repay Rs.15,40,471/- as on
the date of issuing demand notice and even till date. When the Petitioner on
25.10.2016 issued notice u/s. 434(1)(a) of the Companies Act, 1956 that the
debtor company was due to repay Rs.15,40,471/-, the debtor company replied
in email saying that they received letter dated 25.10.2016 and the payments
were held up due to labour problems and internal disruptions. Thereafter the
Petitioner again gave another statutory notice u/s. 8 of the Code to the debtor
company on 10.01.2017 (date is wrongly put as 10.01.2016) to repay the
outstanding Rs.15,40,471/- which he failed to repay after making payment on
10th March, 2016, in the event he does not pay within ten days of receipt of
notice, the Petitioner would file case before this Tribunal under section 9 of this
Code. There was no reply from the corporate debtor to the notice dated
10.01.2017.
3. The Petitioner filed invoices reflecting the supplies made by the Petitioner to
the debtor company and bank statement reflecting the payments that were made
by the corporate creditor and also showing that this corporate debtor has made
no payment after 10.03.2016.
4. The Petitioner herein submits that he has two different accounts; one, in Bank
of India and another, in IDBI. He has filed statement of accounts of the Petitioner
with the Banks aforementioned showing that this debtor company has not made
payments since 10.03.2016, the last payment was made in Bank in India account
on 10.03.2016. to substantiate the evidence reflecting in its account, the Petitioner
filed separate certificates issued by both the Banks certifying that Bank of India
has no entry of payment from the debtor company after 10.03.2016, and the IDBI
Bank has no entry of credit in favour of the Petitioner from the debtor company.
The certificates from the Banks and statements of accounts have been filed as
annexure to this Petition.
5. The corporate debtor has neither given reply to the notice dated sent by the
Petitioner under section 8 of the Code nor has the corporate debtor appeared
before this Bench till date.
MUMBAI BENCH 519
6. Looking at the Petition filed by the operational Creditor u/s.9 of the Code, for
this Bench being satisfied that the Corporate Debtor failed to discharge the liability
mentioned in this Company Petition resulting occurrence of default for an amount
of around Rs.15 lacs, this Bench admits this Petition u/s.9 of the Code declaring
moratorium for the purposes referred to in section 14 of the Code with following
directions:
moratorium period.
(vi) That this Bench hereby appoints Mr. Romesh Chander Sawhney, Chartered
Accountants with registration no. IBBI/PA-001/IP- 00258/2016-2017/1451
having residence cum office at Flat No.850/GH- 13 Paschim Vihar, New
Delhi - 110087, as Interim Resolution Professional to carry the functions as
mentioned under the Insolvency and Bankruptcy Code.
(vii) That this Bench hereby directs the Registry of NCLT, Mumbai to
communicate this order to the Petitioner i.e., operational creditor and the
corporate debtor.

Sd/
Member (Judicial)
Sd/
V. NALLASENAPATHY
Member (Technical)
MUMBAI BENCH 521
M/S BHUPEN ELECTRONIC LTD.
Name of the Corporate Debtor M/s Bhupen Electronic Ltd.
Name of Financial M/s VIP Finvest Consultancy Pvt. Ltd.

Creditor/Applicant
Company Petition No. 03/I 7 BP/NCLY/MAH/2017
Amount Involved Rs. 4.80 crores


1. M/s VIP Finvest Consultancy Pvt. Ltd (‘’Financial Creditor’’ or “FC”) filed the
present application for the initiation of insolvency process against M/s
Bhupen Electronic Limited (‘Corporate Debtor” or “CD).
2. The CD was incorporated on 27.02.1985 under the Registrar of Companies,
Mumbai, Maharashtra.
3. Initially, M/s Industrial Investment Bank of India Ltd (IIBI) had sanctioned a
term loan of Rs. 4,60,00,000/- to the CD vide Loan Agreement dated
23.12.95 and the CD executed a Deed of hypothecation over the stock of
materials and book debts.
4. Since the CD failed to repay the amount to IIBI, the latter filed Application
No. 529 of 200 before DRT, Mumbai for issue of recovery certificate of Rs
4,82,32181 with interest thereon.
5. Subsequently, on 23.03.2013, IIBI assigned financial assets of CD in favour
of M/s India SME Asset Reconstruction Company Ltd.
6. Thereafter, on 23.09.2014, M/s India SME Asset Reconstruction Company
Ltd. assigned the assets and liabilities of CD for a consideration of Rs. 15
Lacs to M/s VIP Finvest Consultancy Pvt. Ltd. (“Financial Creditor” or “FC”)

A. During the proceedings, CD submitted that they had no objection to
initiation of insolvency resolution process.
B. The Bench observed that a perusal of the proceedings of DRT, Mumbai

would make it clear that the assignment of assets and liabilities was
made by IIBI to M/s India SME Asset Reconstruction Co Ltd, and then to M/
s VIP Finvest Consultancy Pvt. Ltd. (FC), thus proving the existence of the
debt and the default.
C. Accordingly, the Bench issued following directions:
i. Appointed Mr. Manish Gupta as the Interim Resolution professional
(“IRP”)
ii. Declared Moratorium under Section 14 of the Code.
iii. Directed causing of Public Announcement of the insolvency
resolution process to be made by IRP under Section 13 of the Code.
MUMBAI BENCH 523

BENCH, MUMBAI
C.P. NO. 03/I & BP/NCLT/MAH/2017
Coram:
Rule 2016)
M/s. VIP Finvest Consultancy Pvt. Ltd.
... Applicant
V/s.
M/s. Bhupen Electronic Ltd.
... Respondent
Applicants' Counsel: Mr. Arvinde Kumar Gupta
Respondents' Counsel: Ms. Ami Jain
ORDER
This is an insolvency and bankruptcy application for initiation of insolvency

resolution process by a financial creditor M/s. VIP Finvest Consultancy Pvt. Ltd.
against the corporate debtor M/s. Bhupan Electronic Ltd. (formerly M/s.
Parasarampuria Polymides Ltd.).
The said financial creditor is an assignee of the assets and liabilities of the
corporate debtor for a consideration of Rs. 15,00,000/- in terms of assignment
agreement dated 23-09-14 with M/s. India SME Asset Reconstruction Company
Ltd.
Previously M/s. Industrial Investment Bank of India Ltd. (IIBI) has sanctioned a
Term Loan of Rs. 4,60,00,000/- to the corporate debtor vide loan agreement
dated 23-12-95 and the corporate debtor executed a deed of hypothecation over
the stock of materials and book debts, likewise the directors of the corporate
debtor have given their personal guarantees and the immovable assets of the
company as security to the loan.
M/s. IIBI Ltd. filed Original Application No. 529 of 2000 before DRT, Mumbai for
issue of recovery certificate for Rs.4,82,32181 together with interest against the
corporate debtor.
Subsequently, on 23-03-13 M/s. IIBI Ltd. assigned financial assets of the corporate
debtor in favour of M/s. India SME Asset Reconstruction Company Ltd., who is the
financial creditor herein.
The financial creditor has named one Mr. Manish Gupta flat no. 199 SFS flats,
Haus Khas, New Delhi 110016. Email: manish.gupta@jhalani.co.in, registration
no. IBBI/IPA-01/2016-14/67 as the proposed interim resolution professional and
the said professional vide his letter dated 14-01-2017 agreed for his appointment
and also stated that no disciplinary proceedings pending against him.
The counsel appearing on behalf of the corporate debtor submits that they have
no objection for initiation of insolvency resolution process. Section 7 of the
Insolvency and Bankruptcy Code provides as below: -
"Section 7: Initiation of corporate insolvency resolution proves by financial
creditor
1) A financial creditor either by itself or jointly with other financial creditors
against a corporate debtor before the adjudicating authority when a default
has occurred.
Explanation: For the purposes of this sub-section, a default includes a
default in respect of a financial debt owed not only to the applicant financial
creditor but to any other financial creditor of the corporate debtor.
2) The financial creditor shall make an application under subsection (1) in
such form and manner and accompanied with such fee as may be
prescribed.
3) The financial creditor shall along with the application furnish
(a) record of the default recorded with the information utility or such
other record or evidence of default as may be specified;
resolution professional; and
4) The Adjudicating Authority shall within fourteen days of the receipt of the
application under sub section (2), ascertain the existence of a default from
the records of an information utility or on the basis of other evidence
furnished by the financial creditor under sub section (3).
MUMBAI BENCH 525
5) Where the Adjudicating Authority is satisfied that-

a) a default has occurred and the application under sub-section (2) is
complete, and there is no disciplinary proceedings pending against
the proposed resolution professional, it may, by order, admit such
application; or
b) default has not occurred on the application under sub-section (2) is
incomplete or any disciplinary proceeding is pending against the
proposed resolution professional, it may, by order, recject such
application.
Provided that the Adjudicating Authority shall, before rejecting the
application under clause (b) of sub-section (5), give a notice to the
applicant to rectify the defect in his application within seven days of
6) The corporate insolvency resolution process shall commence from the
date of admission of the application under sub-section (5).
7) The Adjudicating Authority shall communicate-
a) the order under clause (a) of sub-section (5) to the financial creditor
and the corporate debtor.
b) the order under clause (b) of sub-section 5, to the financial creditor,
within seven days of admission or rejection of such application, as
the case may be."
On looking at the recovery proceedings of DRT Mumbai, it is evident that the
assignment of assets and liabilities by IIBI Ltd. were assigned to M/s. India SME
Asset Reconstruction Co. Ltd. and then M/s. India SME Asset Reconstruction Co.
Ltd. further assigned to this applicant M/s. VIP
Finvest Consultancy Pvt. Ltd., the financial creditor proving the existence of debt
and also the default. Further the Counsel appearing on behalf of the Corporate
Debtor has also no objection for admission of this application and in the
circumstance there is a substantial compliance of provisions of section 7 of the
IBC Code 2016. In view of the above, the application is admitted declaring
moratorium with consequential directions as below: -

moratorium period.
the case may be.
Code.
(vi) That this Bench hereby appoints Mr. Manish Gupta flat no. 199 SFS flats,
Haus Khas, New Delhi 110016. Email : manish. gupta@jhalani.co.in, the
registration no. IBBI/IPA-01/2016-14/67 as interim resolution professional
(vii) Accordingly, this Application is disposed of.
Sd/
Member (Judicial)
Sd/
V. NALLASENAPATHY
Member (Technical)
MUMBAI BENCH 527
U.B. ENGINEERING LTD.
Name of the Corporate U.B. Engineering Ltd.

Debtor/Applicant



1. M/s U.B. Engineering Ltd. (“Corporate Debtor” or “CD”) was incorporated
on January 12, 1970 in the name of “Western India Errectors Private Limited”
which was subsequently changed to “Western India Errectors Limited”
and thereafter the name of the Company was again changed to “U.B.
Engineering Limited” with effect from October 21, 1993.
2. The CD had obtained financial assistance from various financial institutions
and had also created charge over the assets of the Company in favour of
consortium of financial institutions.
3. The Corporation Bank on behalf of the consortium banks issued notice
under Section 13(2) and 13(4) of the SARFAESI Act, 2002 on August 11,
2014.
4. The Corporate Debtor filed an application under Section 10 of the Code
stating that it has committed default in discharging its liabilities.
5. The applicant Corporate Debtor proposed the name of Mr. Adesh Kumar
Mehta as Interim Resolution Professional who gave necessary
declarations under the Code and also filed audited financial statements
for the financial years ending on 31.03.2015, 31.03.2016 and provisional
financial statements as on 26.12.2016.

A. The Bench held that mere scanning of application and enclosed
documents reveal that the Corporate Debtor had committed a default in
respect of the funds borrowed from consortium of banks. Moreover it was
noted that Corporation Bank as a lead bank in the consortium issued
notice under the SARFAESI Act, 2002 which is again an ample proof that
the Corporate Debtor had committed a default.
order
i. Appointed Mr. Adesh Kumar Mehta as the Interim Resolution
Professional (IRP).
Code which shall have effect from January 18, 2017 till the completion
of resolution process or approval of resolution plan or passing of
liquidation order.
Resolution Process immediately under Section 13 of the Code.
MUMBAI BENCH 529

BENCH, MUMBAI
Coram:
Rules 2016)
And
U.B. Engineering Limited
Applicants' Counsel: Mr. Alok Dhir, Counsel, Mr. Nilesh Sharma, Mr. Ashish Pyasi,
Pragya Khaitan, Ralhina Maravarman, Advocates for the Applicant.
ORDER
The corporate debtor applicant herein M/s U.B. Engineering Limited has initiated
Corporate Insolvency Resolution process under Section 10 of the Insolvency and
Bankruptcy code 2016. The applicant has filed an application in terms of Rule 7 of
Insolvency and Bankruptcy (Application to Adjudicating Authorities) Rules 2016.
The Corporate applicant debtor was incorporated on 12- 1-1970 in the name of
"Western India Errectors Private Limited", subsequently was changed to "Western
India Errectors Limited" and later on the name of the Company was changed into
"Western India Private Limited" and thereafter, the name of this Company was
again changed to "UB Engineering Limited" vide certificate of change of name dt
21-10-1993 issued by Registrar of Companies, Maharashtra, Bombay. The said
corporate applicant debtor obtained financial assistance from various financial
institutions, the details as disclosed in the application are as below: -
Sr. No. Name of the Bank Rupees in crores
1. Axis Bank 69.00
2. Corporation Bank 594.78
3 IDBI Bank 165.00
4. Lakshmi Vilas Bank 70.00
5. Yes Bank 105.00

2. The Company has also created charge over the assets of the Company in
favour of the above mentioned financial institutions and said charges were also
registered with the Registrar of Companies, Maharashtra. The Company has
enclosed the sanction letter containing the terms and conditions imposed by the
above financial institutions while sanctioning/extending the credit facilities.
3. The Corporation Bank which is the lead Bank of the Corporation Bank
consortium (comprising of Corporation Bank, IDBI Bank Ltd., Lakshmi Vilas Bank
Ltd, Yes Bank Ltd and Axis Bank ltd), addressed a letter dt. 09.10.2014 to the
Corporate debtor calling upon to pay an amount of Rs.16,79,87,385/- being the
amount outstanding in respect of various facilities sanctioned by the above said
consortium of Banks. The said letter also states that since the corporate debtor is
unable to pay the lawful debts the consortium is entitled to take necessary steps
for dissolution of the corporate debtor under provisions of 271 and 272 of the
Companies Act 2013. The Corporation bank on behalf of the consortium banks
issued notice under Section 13(2) and 13(4) of SARFAESI Act 2002 on 11-8-2014.
4. The Applicant Corporate debtor submitted the written communication from
the proposed interim resolution professional that he agrees to accept the
appointment and also stated that there is no disciplinary proceedings pending
against him. Copies of audited financial statements for Financial Year ended
31.03.2015, 31.03.2016 & provisional financial statement as on 26.12.2016., list of
assets and liabilities as on 26.12.2016 divided in to such categories as are
appropriate for easy identification with estimated values assigned to each category,
names and address of the financial creditors and operational creditors with amount
outstanding and particulars of securities were also given by the Corporate Debtor.
Further, particulars of debt owed by or to the corporate debtor to or by the persons
connected with it, details of personal guaranties, name and address of the
members of the corporate debtor holding 1% or more of the paid up capital of the
Company with details of their shareholding were also disclosed.
5. Section 10 of the Insolvency and Bankruptcy code provides as below:
"Section 10: Initiation of corporate insolvency resolution process by
corporate applicant
process with the Adjudicating Authority,
may be prescribed.
MUMBAI BENCH 531
information relating to
(a) Its books of account and such other documents relating to such
(b) The resolution professional proposed to be appointed as an interim
(4) The Adjudicating Authority shall within a period of fourteen days of the
receipt of the application, by an order:
(a) Admit the application, if it is complete; or
(b) Reject the application, if it is incomplete;
PROVIDED that Adjudicating Authority shall, before rejecting an application,
Authority.
date of admission of the application under sub-section (4) of this section."
An ordinary scanning of the petition filed and the documents enclosed establishes
that the corporate debtor borrowed funds from the consortium banks which clearly
establishes that there is a debt and in view of the non-payment of the debt due to
the consortium of banks the Corporation bank as a lead bank in the consortium
issued notice under SARFAESI Act which is an ample proof that the corporate
debtor has committed a default. Further the corporate debtor being unable to
make the payment to consortium banks came to file this Company petition
admitting that there is a default. The corporate debtor has also named the proposed
interim insolvency resolution professional viz Mr. Adesh Kumar Mehta:10/63,
Old Rajinder Nagar, New Delhi-110060, Registration No. IBBI/IPA- 02/2016-17/
122.
6. Considering the above facts this Bench is of the view the corporate debtor has
complied with the provisions of Section 10 of Insolvency and Bankruptcy Code
and the application is admitted declaring moratorium with consequential

moratorium period.
the case may be.
Code.
(vi) That this Bench hereby appoints Mr. Adesh Kumar Mehta:10/63,Old
Rajinder Nagar, New Delhi-110060, Email Id: mehtaadesh@yahoo.com.
Registration No. IBBI/IPA-02/2016-17/122- as interim resolution
Bankruptcy Code.
(vii) Accordingly, this Application is disposed of.
Sd/
Member (Judicial)
Sd/
V. NALLASENAPATHY
Member (Technical)
MUMBAI BENCH 533
M/s INNOVENTIVE INDUSTRIES LIMITED
Name of the Corporate Debtor M/s Innoventive Industries Ltd.
Name of Financial ICICI Bank

Creditor/Applicant

Section involved Section 7 of IBC, 2016 (Code) r/w Rule 4 of

IBC (Application to Adjudicating Authority)
Rules, 2016

1. ICICI Bank (“Financial Creditor” or “FC”) had advanced following financial
assistance to M/s Innoventive Industries Ltd. (“Corporate Debtor” or “CD”)
a. Rs. 40,74,57,388/- as Term Loan Facility
b. Rs. 21,80,00,000/- as Working Capital Facility
c. $ 7 million as External Commercial Borrowing facility
2. However, on 30.11.2016 CD had defaulted in payment of following amount
a. Rs. 12,22,10,737/- towards Revolving Term Loan (RTL) Facility.
b. Rs. 7,50,05,661/- towards Working Capital Facility
c. Rs. 11,47,58,969/- towards External Commercial Borrowing facility
3. The total outstanding amount payable by CD to FC was Rs. 101,91,77,034/
- as on November 30, 2016.
4. Since the CD had defaulted in making the payment, the present application
was filed by FC.
5. CD filed an interim application in the present application stating that under
the Maharashtra Relief Undertaking (Special Provisions) Act, 1958 (“1958
Act”), Government of Maharashtra issued a notification under Section 3 of
the 1958 Act declaring the CD a “relief undertaking” and thus, for a period
of one year commencing from 22.07.2016 to 21.07.2016, the FC could not

initiate any action in view of the non-obstante clause contained in Section
4 of the 1958 Act.
6. According to CD, the non-obstante clause contained in the Code and in
the 1958 Act operates in different fields. While the former is for realization
of credit facility, the latter is for preventing unemployment in the Industry
and since the later object is more laudable cause protected by the state,
the same shall not be disturbed by section 238 of the Code.
7. The CD also relied upon judgment of the Hon’ble Supreme Court in Vishal
Kalsari vs. Bank of India & Ors. (2016) 3 SCC 762
8. According to FC, notification under Section 4 of 1958 Act is limited only to
the enactments specified in the schedule to 1958 Act which does not list
the Code and that as per section 7 of the Code only the fact of event of
default has to be ascertained and no other determination has been
envisaged thereunder.

A. The Bench noted that both the Code and the 1958 Act contain a non-
obstante clause. However the Code, being a later legislation, would prevail
over the 1958 Act and thus, the notification issued under the 1958 Act
would not be a bar for passing an order under Section 7 of the Code.
B. The objective of the 1958 Act is to prevent unemployment of the existing
employees of an industry which is recognized as a relief undertaking
whereby, passing of an order under Section 7 the Code will not cause any
obstruction to their employment until 180 days, even if the Company goes
into liquidation
C. The liability suspended under 1958 Act being inconsistent with the default
occurred to the debt payable to the creditor, the order under Section 7 of
the Code will not be against the ratio of the judgment of the Hon’ble
Supreme Court in Vishal Kalsari (supra).
D. The Bench noted that CD had made defaults and accordingly, it admitted
the application and passed following order:
i. Declared Moratorium in terms of Section 14 of the Code.
ii. Directed making of necessary Public Announcement under Section
13 of the Code.
MUMBAI BENCH 535

BENCH, MUMBAI
Coram: B.S.V. Prakash Kumar, Member (Judicial) & V.
Nallasenapathy, Member (Technical)
In the matter of Section 7 of the Insolvency and Bankruptcy Code, 2016 read
Rules, 2016).
Between:
ICICI Bank Ltd. .... Applicant
V/s.
M/s. Innoventive Industries Limited .... Respondent
Applicants' Counsel: Mr. Zal Andhyarujina, Mr. L. Viswanathan, Mr. Mr. Anush
Mathkar, Mr. Dhananjay, Mr. Animesh Bisht, Advocates for the Applicant.
Respondents' Counsel: Mr. Ravi Kadam, Sr. Counsel, Mr. Chetan Kapadia, Mr.
Rahul Sarda, Mr. Sanjay Asher, Ms. Manik Joshi, Ms. Aditi Shukla, Advocates for
the Respondent Company.
ORDER
(Heard on 16.01.2017)
(Pronounced on 17.01.2017)
1. The Applicant company namely ICICI Bank Ltd. mentioned this Company Petition
on 22.12.2016 stating that the Corporate Debtor namely Innoventive Industries
Ltd. availed Rs. 40,74,57,388 as Term Loan facility, Rs. 21,80,00,000 as Working
Capital facility, and $7 million as External Commercial Borrowing facility, but
when the Respondent company later defaulted in making payments, this applicant
says the default occurred on 30.11.2016 for Rs. 12,22,10,737 towards RTL facility,
Rs. 7,50,05,661 towards Working Capital facility and Rs. 11,47,58,969 towards
External Commercial Borrowing facility. Since the aforesaid facilities have not
been recalled, the total outstanding amount payable by this corporate debtor is
Rs. 1,019,177,034 as on November 30, 2016 and the Corporate Debtor is liable to
pay the outstanding amount together with interest cost, expenses and other
moneys which shall accrue on the contractual rate. For the Corporate Debtor has
defaulted in making repayment as mentioned above, this Applicant company
initiated this Company Petition under Insolvency and Bankruptcy Code, 2016 for
realization of this money by initially seeking for an order of Moratorium as
mentioned in the provisions of aforesaid Code.

2. In which, the corporate debtor filed an Application in this Creditor Petition
stating that as on the date of filing this Creditor Petition, the debts said to have
been existing against the Corporate Debtor have been suspended under
Maharashtra Relief Undertaking (Special Provisions) Act on 18.7.2016 declaring
that the Industrial Undertaking called M/s. Innoventive Industries Ltd. (under the
said it is referred as “the said relief undertaking”), to which financial assistance of
industrial promotion subsidy of Rs. 115,36,40,000 provided by the Government of
Maharashtra under the Package Scheme of 2007 Incentive, shall for a period one
year commencing on 22.7.2016 and ending of 21.7.2017 be conducted to serve
as a measure of preventing unemployment and directs that in relation to such
undertaking in respect of one year period mentioned above, rights, privileges,
obligations, or liability accrued or incurred before 22.7.2016 and any remedy for
the enforcement thereof shall remain suspended and all proceedings relating
thereto pending before any Court, Tribunal, Officers or Authority shall be stayed.
3. The case of the Corporate Debtor in this interim application is, since Industry,
Energy and Labour Department of Maharashtra passed the above reliefs
suspending the liabilities of the Corporate Debtor and remedies against the debtor
for one year from 22.7.2016, this financial Creditor could not have invoked this
relief on the ground default occurred in relation to the debt owed to the creditor
ignoring the order passed by the said Department declaring all liabilities and the
reliefs thereof been suspended until 21st July 2017.
4. To fortify his argument, the counsel of the Corporate Debtor submits that the
Maharashtra Relief Undertaking (Special Provisions) Act is armoured with non-
obstante clause in section 4 with overriding effect, which is as follows:–
4. (1) Notwithstanding any law, usage, custom, contract, instrument, decree,
order, award, submission, settlement, standing order or other provision
whatsoever, the State Government may, by notification in the official
Gazette, direct that –
(a) in relation to any relief undertaking and in respect of the period for
which the relief undertaking continues as such under sub-section (2)
of section 3 –
(i) all or any of the laws in the Schedule to this Act or any provisions
thereof shall not apply (and such relief undertaking shall be exempt
therefrom), or shall, if so directed by the State Government, be
applied with such modifications (which do not however affect the
policy of the said laws) as may be specified in the notification;
MUMBAI BENCH 537
(ii) all or any of the agreements, settlements, awards or standing orders

made under any of the laws in the Schedule to this Act, which may
be applicable to the undertaking immediately before it was acquired
or taken over by the State Government 3[ or before any loan,
guarantee or other financial assistance was provided to it by, or
with the approval of, the State Government,] for being run as a relief
undertaking, shall be suspended in operation or shall, if so directed
by the State Government, be applied with such modifications as
may be specified in the notification;
(iii) rights, privileges, obligations and liabilities shall be determined and
be enforceable in accordance with clauses (i) and (ii) and the
notification;
(iv) any right, privilege, obligation or liability accrued or incurred before
the undertaking was declared a relief undertaking and any remedy
for the enforcement thereof shall be suspended and all proceedings
relative thereto pending before any court, tribunal, officer or authority
shall be stayed;............”
5. The counsel of the Corporate Debtor further submits that Non-Obstante clause
in Section 238 of Insolvency and Bankruptcy Code 2016 as against Non-Obstante
Clause in MRU, both operate in different fields, one for realisation of the credit
facility availed by the Debtor and another for preventing unemployment in the
Industry, since the later object is more laudable cause protected by the state, the
same shall not be disturbed by invoking section 238 of Insolvency and Bankruptcy
Code 2016.
6. Therefore, to propound this argument, the counsel relied upon Vishal N Kalsa
v. Bank of India [2016] 3 SCC 762 (Para 113), to say “the non obstante clause
contained in section 34 (1) of the DRT Act and Section 35 of the Securitisation
Act give overriding effect to the provisions of those Acts only if there is
anything inconsistent contained in any other law. In other words, if there is
no provision in other enactments which are inconsistent with the Code, the
provisions contained in those Acts cannot override other legislations.”
7. To which the Applicant Counsel submits that non obstante clause in section
238 of IBC 2016 will have overriding effect over the operation of MRU Act 1958,
because the law envisaged in MRU Act is inconsistent with section 238 of IBC
2016.
8. He also relied upon JM Financial Asset Reconstruction Company v. State of
Maharashtra 2016 SCC online Bombay, 9099 and Madras Petrochem Ltd. v. BIFR
and 2016 (4) SCC 1 and further saying that the notification issued u/s.4 of MRU Act
is limited to the enactments as specified in the Schedule to MRU Act. He further

submits that plain reading of section 4 of MRU makes it clear that only the right,
privilege, obligation or liability accrued or incurred before the undertaking was
declared a relief undertaking, in so far as the said right relates to availing of any
remedy for enforcement is suspended and not existence/continuation of debt or
default itself, therefore suspension of indebtedness or default has not been
contemplated or provided under the MRU Act.
9. He further submits, as per Section-7, only the fact of the event of default has to
be ascertained, and no other determination has been envisaged under the Code
for admission of the application u/s 7 of the Code and the Tribunal is only required
the documents specified under the Code, if in the event of the same are not
sufficient or there is any defect in the application, the Tribunal has discretion to
direct the Applicant to rectify the same. In view of the same, the Applicant Counsel
submits that the Notification given by the Industry, Energy and Labour Department
of Maharashtra, on 22.7.2016, will not have any bearing on passing an order u/
s.7 of the Code henceforth he prays this Bench to admit the Company Petition
with the direction mentioned under sections 13,14,15 & 16 of this Code.
10. On hearing the submissions of the Applicant counsel and Corporate Debtor
Counsel, it is evident that non obstante clause is present in both MRU Act and IB
Code, now the point to be decided is whether an order could be passed u/s.7 of
the Code or not.
11. It is evident on record that IB Code has come into existence subsequent to
MRU Act therefore, notwithstanding clause in section 238 of IBC prevails upon
any other law for the time being in force, hence it could not be said that Notification
given under MRU Act will become a bar to passing this order u/s. 7 of the IBC
2016.
12. Moreover, the objective under MRU Act, is to prevent unemployment of the
existing employees of an industry which is recognized as relief undertaking, but
by passing an order u/s.7, it will not cause any obstruction to their employment
until next 180 days, even if the company goes into liquidation, then also the rights
of the employees are protected to the extent mentioned under IBC, therefore, the
Corporate Debtor Counsel cannot have an argument saying that passing an
order u/s.7 of the Code will be against the interest of the employees.
13. Here the subject matter is liability over the company, the liability of the company
has been dealt with by the MRU Act and also by IBC but with different objectives,
in MRU Act, it is to protect the interest of employees and in IBC, it is for protecting
the creditors who have supplied fuel to the company to make it run. Since the
liability suspended under MRU Act being inconsistent with the default occurred
to the debt payable to the creditor, this order will not be against the ratio decided
MUMBAI BENCH 539
by Hon’ble Apex Court in VishalNKalsa v. Bank of India and Others [2016] 3 SCC
762 (Para 113) therefore, this Bench having not noticed any merit in the argument
of the Corporate Debtor Counsel, the Application filed by the Corporate Debtor is
hereby dismissed.
14. The corporate debtor filed another application saying notice has not been
served to the debtor, but this plea pales into insignificance because this Bench
already heard the Corporate Debtor and his application has already been
dismissed, therefore this application also does not lie, hence the same is also
hereby dismissed.
documents filed by the Creditor, it is evident that the Corporate Debtor defaulted
in making payments as mentioned above, and he has placed the record of the
default with Information Utility and he also placed the name of the Insolvency
Resolution Professional to act as interim resolution Professional, having this Bench
noticed that default has occurred and there is no disciplinary proceedings pending
against the proposed resolution professional, therefore the Application under
sub-section (2) of section 7 is taken as complete, accordingly this Bench hereby
admits this Application declaring Moratorium with the directions as mentioned
below:
moratorium period.

the case may be.
Code.
6. That this Bench hereby appoints Mr. Dhinal Shah, 9, Urmikunj Society, Nr.
St. Xavier College Corner, Navrangpura, Ahmedabad -389009, Gujarat,
email: dhinal.shah@in.ey.com. Registration No. IBBI/IPA-01/2016-17/015
as interim resolution professional to carry the functions as mentioned
16. Accordingly, this Application is disposed of.
Sd/
Member (Judicial)
Sd/
V. NALLASENAPATHY
Member (Technical)
NEW DELHI BENCH 541
NEW DELHI BENCH

NEW DELHI BENCH 543
M/S. SHREE RADHA RAMAN PACKAGING PVT. LTD.
Name of the Corporate Debtor M/s. Shree Radha Raman Packaging

Private Limited
Name of the Operational Steel India Corporation

Creditor/Applicant
Company Petition No. (IB)-56(ND)/2017
Bench NCLT, New Delhi Bench
Amount Involved Rs.3.84 lakhs

1. Steel India Corporation (“Operational Creditor” or “OC”), a registered
partnership firm is engaged in the business of sale of GP Coils and Allied
items and had supplied goods to M/s. Shree Radha Raman Packaging
Private Limited (“Corporate Debtor” or “CD”).
2. The OC had been maintaining a running account for the goods supplied
to CD against which a default of payment of Rs. 3,32,137 in addition to
their liability towards payment of sales tax of Rs. 52,661.
3. In acknowledgement of the outstanding liabilities, the CD had tendered
two demand drafts in the sums of Rs. 2,00,000 and Rs. 1,35,000. The said
demand drafts were returned unpaid with the remarks “refer to drawer”.
4. The learned counsel of the OC had submitted that they have complied
with the mandatory provisions of Section 9(3) (a), (b) & (c) of the Code.
Copies of invoice and delivery challans sent along with the demand notice
dated 18.01.2017 to CD were placed on record. No reply to the demand
notice was received from the CD.
5. The OC further submitted that the CD had not raised any dispute with
regard to the unpaid debt and an affidavit has been filed as required
under Section 9(3)(b).
6. A letter issued by the J&K Bank certifying that no credit has been made in
the account of the OC against the dishonoured instruments of Rs. 2,00,000
and Rs. 1.3 lakh respectively was placed on record.
7. The OC took steps to notify the CD about the listing of the petition on
18.04.2017. However, no one appeared on their behalf.

A. On perusal of the facts of the case, the Bench was satisfied that the OC is
entitled to claim its legally recoverable dues for the goods supplied.
B. The Bench admitted the application and passed the following orders:
i. Declared moratorium in terms of section 14 of the Code which shall
ii. Referred the matter to Insolvency and Bankruptcy Board of India
(IBBI) for recommending the name of a registered Interim Resolution
Professional (IRP) to be appointed in this case.
NEW DELHI BENCH 545

NEW DELHI BENCH, NEW DELHI
C.P. NO. (IB)-56(ND)/2017
C. A. NO.
CORAM:
PRESENT : SMT. INA MALHOTRA HON’BLE MEMBER (J)
SH. S.K. MOHAPATRA HON’BLE MEMBER (T)
ATTENDANCE-CUM-ORDER SHEET OF THE HEARING BEFORE NEW DELHI BENCH
OF THE NATIONAL COMPANY LAW TRIBUNAL ON 28.04.2017
NAME OF THE COMPANY :
M/s. Steel India Corporation
V/s.
M/s. Shree Radha Raman Packaging Pvt. Ltd.
SECTION OF THE COMPANIES ACT: U/s 9 of Insolvency and Bankruptcy Code,
2016
Present: Mr. Rahul Sood, Advocate, Operational Creditor
ORDER
This petition has been admitted and disposed of by our separate order.
(S.K. MOHAPATRA) (INA MALHOTRA)

NEW DELHI
Date of Decision: 28th April, 2017
In the matter of
Under Section 9 of the Insolvency and Bankruptcy Code, 2016
M/s. Steel India Corporation
Petitioner
Versus
Shree Radha Raman Packaging Pvt. Ltd.
Respondent
CORAM: MS. INA MALHOTRA, MEMBER (JUDICIAL)
MR. S.K.MOHAPATRA (TECHNICAL)
For Petitioner(s) None
For Respondent(s) Mr. Rahul Sood, Advocate, Operational Creditor
The petitioner, a registered partnership firm, has filed this application u/s 9 of
the IBC, 2016 (hereinafter referred to as ‘Code’) claiming to be an Operational
Creditor. As per the submissions made, the Operational Creditor is engaged in
the business of Sale of GP Coils and Allied Items. During the course of its
business, it had supplied goods to the respondent (herein referred to as
Corporate Debtor). The Operational Creditor has been maintaining a running
account for the goods supplied to the Corporate Debtor and prays for initiation
of the Insolvency Resolution Process against them as they are in default of
payment of Rs.3,32,137/-, in addition to their liability towards payment of sales
tax of Rs. 52,661 /- having failed to submit
2. The present petition has been filed in the form and manner prescribed under the
Code. It is annexed with the copies of the invoices and delivery receipts from
September 2015 to August 2016. The petitioner has been maintaining a ledger
account reflecting the statement of debit and credit in the running account with the
Corporate Debtor which reflects an outstanding liability of Rs. 3,32,137/-, towards
the unpaid bills. It is submitted that in acknowledgment this outstanding liability, the
Corporate Debtor had tendered two demand drafts in the sums of Rs.2,00,000/-
and Rs. 1,35,000/-. Both these demand drafts being number 010252 and 010253,
dated 14.02.2016, were issued by the Central Bank of India, Rasoi, Sonepat. The
said demand drafts were returned unpaid with the remarks”refer to drawer”.
NEW DELHI BENCH 547
3. It is submitted by the Ld. Counsel for the Operational Creditor that they have
duly complied with the mandatory provisions of Section 9(3) (a), (b) & (c). Copies
of the invoices and delivery challans sent along with their demand notice dated
18/01/2017 to the Corporate Debtor have been placed on record. The applicant
submits that the Corporate Debtor has not raised any dispute with respect to the
un-paid operational debt and an affidavit has been filed as required u/s 9(3) (b).
Further, apart from the statement of their Account, duly certified by the Bankers,
letter issued by their Bank viz. J&K Bank has certified that no credit has been
made in the account of the Operational Creditor against the dishonoured
instruments of Rs.2,00,000/- and Rs.1.3 lakhs respectively.
4. The Notice u/s 8 of the Code has remained unreplied. Steps were taken by the
Operational Creditor to notify the Corporate Debtor about listing of this petition on
18th April, 2017. Despite service, none appeared on their behalf.
5. From the facts of the case, we are satisfied that the Operational Creditor is
entitled to claim its legally recoverable dues for the goods supplied and to initiate
the Insolvency Resolution Process against the Corporate Debtor. This petition u/
s 9 of the Code is therefore Admitted.
6. A moratorium in terms of section 14 of the Code is being issued prohibiting the
following:
(a) Institution of suits or continuation of pending suits or proceedings against
the corporate debtor including execution of any judgment, decree or order
in any court of law, tribunal, arbitration panel or other authority;
of Security Interest Act, 2002; debtor.
7. It is further directed that:
(a) The supply of essential goods or services to the corporate debtor as may
moratorium period.
(b) The provisions of sub-section (1) of section 14 of the Code shall not apply
to such transactions as may be notified by the Central Government in
consultation with any financial sector regulator.
8. The order of moratorium shall have effect from the date of this order till the
9. Matter is referred to the IBBI Board for recommending the name of a registered
Interim Resolution Professional to be appointed in this case.
10. Copy of the order be communicated to both the parties.
NEW DELHI BENCH 549
M/S. KALIBER ASSOCIATES PVT. LTD.
Name of the Corporate Debtor M/s. Kaliber Associates Private Limited
Name of the Financial Mrs. Tripat Kaur

Creditor/Applicant

Amount Involved Rs.1 Crores

1. Mrs. Tripat Kaur (“Financial Creditor” or “FC”), a proprietor of a firm under
the name and style of M/s. Gallerie Nvya has claimed to have given an
unsecured loan of Rs.1.5 Crore to M/s. Kaliber Associates Private Limited
(“Corporate Debtor” or “CD”). The amount was transferred on 21.01.2012 to
CD’s account vide RTGS from her account maintained with Barclays Bank.
2. The loan was payable at an interest of 18% p.a. The CD had been remitting
interest regularly and paid Rs. 2,02,500 per month (after TDS deduction
under Section 194A of Income Tax Act).
3. The FC had filed copies of her bank statements showing the credit of the
monthly interest for the FY 2012-13 and FY 2013-14. For the FY 2014-15, the
CD remitted Rs. 50,00,000 on 10.12.2014 as part payment of the loan
which was repaid along with eight cheques of the monthly interest of Rs.
2,02,500 for the period 01.04.2014 to 30.11.2014.
4. The FC acknowledged having received interest on the outstanding loan of
Rs. 1 crore till 29.02.2016. However, after the mentioned date, the CD
defaulted in paying the interest component and the FC demanded return
of her loan of Rs. 1 crore.
5. As no steps were taken by the CD, the FC issued a demand notice under
Section 433-434 of the Companies Act, 1956 which was followed by initiating
winding up petition before the Hon’ble High Court of Delhi. This case was
subsequently transferred to NCLT but was withdrawn on 20.03.2017 with
liberty to initiate fresh petition on the same cause under IBC.
6. Notice of motion was duly effected on the CD but no one appeared.

7. The FC named Mr. Ashish Agarwal as the Interim Resolution Professional
(IRP) who had given all necessary declarations under the Code.
Grounds of Admission and Details of the order

A. On perusal of the facts of the case, the Bench was satisfied that the FC had
initially given a loan of Rs. 1.5 crore of which Rs. 50 lakhs were returned on
10.12.2014.The balance outstanding loan of Rs. 1 crore is clearly a
recoverable debt and is being claimed within limitation period.
B. The Bench further noted that payment of periodic interest up to 29.02.2016
which was not only reflected in the Bank Accounts of the FC but also by
deposit of the TDS by the CD as reflected in the Form-26AS is an
acknowledgement of debt.
C. The Bench observed that there is a default under the Code and admitted
the application. The Bench passed the following orders in this respect:
i. Appointed Mr. Ashish Agarwal as the Interim Resolution Professional
(IRP) and directed him to perform his duties as envisaged u/s 15, 17
& 18 of the Code.
ii. Declared moratorium in terms of section 14 of the Code which shall
iii. Directed the IRP to cause public announcement in terms of Section
15 of the Code.
iv. Directed all personnels of CD and other persons associated with the
management to extend all assistance and cooperation to the IRP as
may be required by him in managing the affairs of the CD.
NEW DELHI BENCH 551

AT NEW DELHI
Company Petition No. (lB)-51(ND)/2017
In the matter of
Under Section 7 of Insolvency and Bankruptcy Code, 2016 r/w Rule 4 of the lBC
Mrs. Tripat Kaur
..... Petitioner / Financial Creditor
Versus
M/ s Kaliber Associates Pvt. Ltd.
... Respondent/Corporate Debtor
CORAM :
MS. INA MALHOTRA, MEMBER (JUDICIAL)
MR. S.K.MOHAPATRA, MEMBER (TECHNICAL)
For Petitioner: Mr. R.K.Gupta and Mr. Swapnil Gupta, Advocates for the Petitioner
For Respondent: None
ORDER
The petitioner, as proprietor of a firm under the name and style of M/s. Gallerie
Nvya, has filed the present application u/s 7 of Insolvency and Bankruptcy Code,
2016 (hereinafter referred to as ‘IBC’).
2. As per averments, she has claimed to be a Financial Creditor, having given an
unsecured loan of RS.1.5 crore to Respondent Corporate Debtor. The said amount
was transferred on 21.01.2012 to the Corporate Debtor’s account vide RTGS from
her Account maintained with Barclays Bank. This loan which was to be repaid on
demand attracted an interest of 18% per annum. The Corporate Debtor had been
remitting interest regularly as agreed and after deduction of the TDS u/s 194A of
the Income Tax Act, paid Rs.2,02,500 per month. The Financial Creditor has filed
a copy of her bank statements showing the credit of the monthly interest from the
period 01.04.2012 to 31.03.2013. This payment of interest is duly corroborated by
her Form 26AS reflecting the deposit of the TDS u/s 194A which is in respect of
Income from Interest (other than securities). The said receipts also find due
confirmation in the ledger account of the Corporate Debtor.
3. The payment of interest in terms of the aforesaid is also duly evidenced for the
F.Y. 2013-14. For the period 2014-15, the Corporate Debtor remitted Rs.50,00,000
on 10.12.2014 as part repayment of the loan. This was repaid along with eight
cheques of the monthly interest ofRs.2,02,500 for the period 01.04.2014 to
30.11.2014 (after deduction of TDS). It is submitted that the interest on the balance
loan of 1 crore was duly paid to her for the period 01.12.2014 to 31.03.2015.
The TDS on the aforesaid was also deposited by the Corporate Debtor and is
reflected in her Form 26AS.
4. The petitioner further acknowledges having received interest on the
outstanding loan of Rs.1 crore till 29.02.2016. Documents evidencing the same
have been filed on record. It is only after 29.02.2016 that the Corporate Debtor
defaulted in paying the interest component and therefore the Petitioner/Financial
Creditor demanded return of her loan of Rs.1 crore. As no steps were taken by the
Corporate Debtor, a demand notice u/s 433-434 of the Companies Act, 1956 was
issued which was followed by initiating a Winding Up petition before the Hon’ble
High Court of Delhi being CP No.1257/2016. This was subsequently transferred to
the NCLT, but was withdrawn on 20.03.2017 with liberty to initiate a fresh petition
on the same cause of action under the lBC.
5. Notice of motion was duly effected on the Corporate Debtor, but none appeared.
The petition has been filed in the form and manner prescribed. A perusal of the
aforesaid facts satisfies this Bench that the petitioner had initially given an
unsecured loan of Rs.1.5 crores of which Rs.50 lakhs were returned on 10.12.2014.
The balance outstanding loan of Rs.1 crore is clearly a recoverable debt and is
being claimed within the period of limitation. The payment of periodic interest
upto 29.02.2016, which is not only reflected in the Bank Accounts of the petitioner,
but also by deposit of the TDS (194A) by the Corporate Debtor as reflected in the
Form-26AS, is an acknowledgment of debt. The petitioner satisfies the definition
of a Financial Creditor and the Respondent of being a Corporate Debtor as defined
under the Code. There has been a default by the Respondent Corporate Debtor.
The non-payment of the aforesaid debt which is also recoverable with Creditor to
initiate Insolvency Resolution Process. The petitioner has named Mr. Ashish
Aggarwal as the Insolvency Resolution Professional who has given his consent
to act as the Interim Resolution Professional vide his communication dated
15.03.2017 attaching alongwith his registration certificate issued by the IBBI
qualifying him to act as the Insolvency Professional in accordance with the
Regulation. He has also certified that he is not disqualified to act as the IRP..
6. For the reasons aforesaid, this petition stands admitted. Mr. Ashish Agarwal,
Registration No. IBBI/IPA-001-IP-00153/2016-2017/1206 is hereby appointed as
the Interim Resolution Professional.
NEW DELHI BENCH 553
A moratorium is declared in terms of Section 14 of the IBC prohibiting:

“(a) the institution of suits or continuation of pending suits or proceedings
other authority;
(c) any action to foreclose, recover or enforce any security interest created
Enforcement of Security Interest Act, 2002;
It is further directed that:
The supply of essential goods or services to the corporate debtor as may
moratorium period.
(3) The provisions of sub-section (1) of section 14 shall not apply to such
(4) The order of moratorium shall have effect from the date of this order
till the completion of the corporate insolvency resolution process:
7. The Interim Resolution Professional appointed shall cause public
announcement as required under section 15 of the Act and perform his duties as
envisaged u/s 15, 17 & 18 of the Code. It is also directed that all personnels of the
Corporate Debtor and other persons associated with the management shall
extend all assistance and cooperation to the Interim Resolution Professional as
may be required by him in managing the affairs of the Corporate Debtor.
8. The Interim Resolution Professional shall submit his report before this Bench
within the time provided for under the statute.
M/S HELPLINE HOSPITALITY PVT.LTD.
Name of the Corporate Debtor M/s Helpline Hospitality Pvt. Ltd.
Name of Operational R. M. House Keeping

Creditor/Applicant
Company Petition No. (IB)-35(ND) of 2017


1. R. M. House Keeping (“Operational Creditor” or “OC”) filed the present
application on ground of default in paying principal amount of Rs.
24,69,320/- against invoices raised for services rendered by OC.
2. The OC and M/s. Helpline Hospitality Pvt. Ltd (“Corporate Debtor or “CD”)
entered into an Agreement dated 01.04.2012 whereby the OC was required
to render services of garbage disposal and drainage cleaning system as
well as provide tractors and JCB with operators.
3. The Agreement was for a period of 3 years, however, the CD continued to
avail the services of the OC thereafter on same terms and conditions.
4. The OC raised invoices on a regular basis and the CD had been making
payments from time to time and a running account was maintained. The
last part payment was made in November, 2015. Thereafter, despite
assurances, the CD has remained in default.
5. OC issued notice under Section 8 of the Code issuing demand notice
dated 28.02.2017 for unpaid operational debt and furnished an Affidavit,
as mandated under section 9(3)(b) of the Code deposing that no reply has
been received from CD disputing the unpaid operational debt.

A. The Bench observed that it was satisfied that OC was entitled to the unpaid
operational debt. The OC had annexed copies of invoices raised from
NEW DELHI BENCH 555
time to time. Payments received from time to time have been adjusted in
ledger which reflected a running account.
B. Apart from the above, CD did not raise any dispute prior to filing of the
application. The Affidavit in terms of Section 9(3)(b) of the Code, copy of the
statements of account maintained with their banks reflect that no payment/
remittance was made by CD.
C. The Bench accordingly, admitted the application and passed the following
order:
i. Referred the case to Insolvency & Bankruptcy Board of India through
its Chairperson for recommending appointment of Interim Resolution
Professional (IRP) in the manner laid down under Section 16 of the
Code as no IRP was named in the application.
Code
IN THE NATIONAL COMPANY LAW TRIBUNAL AT NEW DELHI

Reserved on: 21st April, 2017
Company Petition No. (lB)-35(NDl/2017
In the matter of
Under Section 9 of Insolvency and Bankruptcy Code,2016
R.M. House Keeping ..... Applicant
Versus
M/s Helpline Hospitality Pvt. Ltd. . .. Respondent .
For Petitioner (s) Mr. Sriram Parakkat, Advocate.
For Respondent(s) Mr. Shinoj K. Narayanam, Advocate.
ORDER
This petition was first listed before this Bench on 29th March, 2017. Upon reopening
of the Tribunal on 10th April 2017, opportunity was granted to the petitioner to
remove the objections.
2. The petitioner, as proprietor of M/ s. R.M. House Keeping, has claimed to be an
Operational Creditor within the definition as provided for in the Insolvency &
Bankruptcy Code, 2016 (hereinafter referred to as the “Code”), praying for initiation
of the Insolvency Resolution Process against the Respondent/Corporate Debtor
on grounds of default in paying the principal amount of Rs.24,69,320, against
mvoices raised for the services rendered.
3. As per averments, the petitioner and the respondent had entered into an
agreement whereby the petitioner was required to render services of garbage
disposal and drainage cleaning system as well as provide tractors and JCB with
operators. It is stated that the said agreement dated 01.04.2012 was for a period
of three years, but the Corporate Debtor continued to avail the services of the
Operational Creditor thereafter on the same terms and conditions. The Operational
Creditor had been raising invoices on a regular basis. The Ledger Account
produced reflects that the Operational Debtor made payments from time to time
and a running account was maintained. The last part payment in acknowledgement
of the outstanding liability and in order to reduce the debt was made by the
NEW DELHI BENCH 557
Corporate Debtor in November 2015. Thereafter, despite assurances to liquidate

the outstanding liability, the Corporate Debtor has remained m default.
As per averments, the Corporate Debtor was fully satisfied with the services
rendered.
4. The Operational Creditor had taken steps as required under section 8 in
issuing a demand notice dated 28.02.2017 for the unpaid operational debt, along
with copies of invoices in the form and manner required under the Code. Copies
of the same along with its postal record have been filed.
The applicant submits that no reply has been received from the Corporate Debtor.
An affidavit as mandated under section 9(3) (b) of the Code has been filed deposing
that no reply has been received from the Corporate Debtor disputing the unpaid
operational debt.
5. The petitioner has filed copies of the invoices raised from time to time which
are reflected in the Ledger Account maintained in respect of the services rendered
to the Corporate Debtor. Payments received frorri time to time have been adjusted
in the ledger which reflects a running account. The petitioner submits that as
against the total billing of Rs.65,66,846/-, the Corporate Debtor had paid
Rs.40,66,846/-, leaving the outstanding liability at Rs.24,69,320 / -. As observed
earlier, the last payment received was in November 2015 towards reduction of
the outstanding liability and therefore the present application is well within
limitation. The Corporate Debtor has not raised any dispute prior to the filing of
the petition. Apart from the affidavit in terms of Section 9(3)(b) of the Code, copy of
the statement of account issued by the financial institution maintaining the account
of the Operational Creditor reflects that no payment of the unpaid Operational
Debt by the Corporate Debtor was made after 15.10.2015. Given the facts of the
case, this Bench is satisfied that the Operational Creditor is entitled to a legally
recoverable debt which is more than Rs.1 lakh, entitling it to initiate the Insolvency
Resolution Process. Accordingly, this Bench hereby admits this petition filed under
section 9 of the Insolvency and Bankruptcy Code, 2016. A moratorium is declared
prohibiting the following:
“(a) the institution of suits or continuation of pending suits or proceedings
decree or order in. any court of law, tribunal, arbitration panel or
other authority;
(c) any action to foreclose, recover or enforce any security interest created

Enforcement of Security Interest Act, 2002;
(2) The supply of essential goods or services to the corporate debtor as
may be specified shall not be terminated or suspended or interrupted
may be notified by the Central Government in consultation with any financial
sector regulator.
(4) The order of moratorium shall have effect from the date of this order
6. The case is referred to the Insolvency & Bankruptcy Board of India through its
President for recommending the appointment of an Interim Resolution
professional in the manner laid down under Section 16 of the Code.
Copy of this order be served to the parties.
(S.K. MOHAPARA) (INA MALHOTRA)

MEMBER TECHNICAL MEMBER (JUDICIAL)
NEW DELHI BENCH 559
M/S EKDANTAM INFRA PVT.LTD.

Name of the Corporate Debtor M/s Ekdantam Infra Pvt. Ltd.
Name of Operational M/s R S Polychem

Creditor/Applicant
Company Petition No. (IB)-42(ND) of 2017



1. M/s R S Polychem (“Operational Creditor” or “OC”) filed the present
application on ground of default in paying principal amount of Rs. 6,63,452/
- by M/s Ekdantam Infra Pvt. Ltd (“Corporate Debtor or “CD”) against invoices
dated May to July, 2016 issued by OC for supplying goods to CD.
2. The OC issued notice under section 8 of the Code. It also filed affidavit as
mandated under section 9(3) (b) of the Code that no reply has been received
from the corporate debtor disputing the unpaid operational debt.
3. Notice was issued to the CD by the Bench.

A. The Bench observed that it was satisfied that OC was entitled to the unpaid
operational debt. The OC had annexed copies of invoices raised from
time to time. Payments received from time to time have been adjusted in
ledger which reflects a running account.
B. Apart from the above, affidavit in terms of section 9(3)(b) of the Code, copy
of the statements of account maintained with their banks viz. Central Bank
of India and Bank of India, were annexed which do not show any payment/
remittance made by CD.
C. The Bench accordingly, admitted the application and passed the following
order:
i. Appointed Mr. Rakesh Wadhwa, as an Interim Resolution
Professional.

Code
iii. Directed the IRP to take steps and perform duties in terms of Section
15, 17 and 18.
iv. The IRP was also directed to submit his report within four weeks.
NEW DELHI BENCH 561
IN THE NATIONAL COMPANY LAW TRIBUNAL AT NEW DELHI

Filed on : 29th March , 2017
In the matter of
Under Section 9 of Insolvency and Bankruptcy Code, 2016
M/s. RS Polychem
......Applicant
Vs.
M/s Ekdantam Infra Pvt. Ltd.
...Respondent
For Petitioner (s) : Mr. Siddharth Sharma and Ms. Charu Tyagi, Advocates for the
Applicant.
For Respondent(s)
ORDER
The petitioner, as proprietor of M/s. RS Polychem, has claimed to be an Operational

Creditor within the definition as provided for in the Insolvency and Bankruptcy
Code, 2016 (hereinafter referred to as the "Code”), praying for initiation of Insolvency
Resolution Process against the Respondent/Corporate Debtor on grounds of
default in paying the principal amount of Rs.6,63,452/-, against invoices raised
for supplying goods.
2. As per averments, the petitioner supplied goods and raised invoices on the
Corporate Debtor. Details of the unpaid transactions are reproduced to be as
under:
Invoice Date Invoice Value Payment Due
No. as on 29.03.2017
016 17.05.16 130,205.00 15,355.00
017 21.05.16 108,660.00 108,660.00
24 23.06.16 148,547.00 148,547.00

25 23.06.16 137,982.00 137,982.00
38 16.07.16 104,361.00 104,361.00
40 28.07.16 148,547.00 148,547.00
Total 778,302.00 6,63,452.00

3. The Operational Creditor had taken steps as required under section 8 in
issuing a demand notice dated 28.02.2017 for the unpaid operational debt of
Rs. 6,63,452/-, along with copies of invoices in the form and manner required
under the Code. Copies of the same along with its postal record have been filed.
The applicant submits that no reply has been received from the Corporate Debtor.
An affidavit as mandated under section 9(3)(b) of the Code has been filed deposing
that no reply has been received from the Corporate Debtor disputing the unpaid
operational debt.
4. Notice was also issued to the Corporate Debtor by this Bench, but none
appeared. Given the facts of the case, this Bench is satisfied that the Operational
Creditor is entitled to a legally recoverable debt of Rs.6,63,462/- for the goods
supplied for which due notice was issued and remains undisputed till date. The
copies of the invoices raised from time to time are duly annexed to the petition
and are reflected in the Ledger Account maintained in respect of the goods
supplied to the Corporate Debtor. Payments received from time to time have
been adjusted in the ledger which reflects a running account. The petitioner
submits that as against the total billing of Rs. 14,88,452/-, the Corporate Debtor
had paid Rs.8,24,990/- leaving the outstanding liability at Rs.6,63,462/-. The
Corporate Debtor has not raised any dispute prior to the filing of the petition,
either in respect of the amount claimed, or the quality of the goods supplied.
Apart from the affidavit in terms of Section 9(3)(b) of the Code, copy of the statements
of account maintained with their Banks viz. Central Bank of India and Bank of
India, corroborate the Operational Creditors ledger account and does not show
any payment/remittance made by the Corporate Debtor as claimed herein.
Accordingly, this Bench hereby admits this petition filed under section 9 of the
Insolvency and Bankruptcy Code, 2016. The Operational Creditor has named the
Interim Insolvency Professional, viz. Mr. Rakesh Wadhwa who is duly registered
with ICSI, having registration no. no IP-00010/2016-17/1025. His statement that
no disciplinary proceeding is pending against him and that he is eligible to be
appointed as a resolution professional in accordance with the provisions of
Insolvency and Bankruptcy Board of India is on record. Mr. Rakesh Wadhwa is
accordingly appointed as the provisional insolvency professional and shall take
immediate steps in terms of Sec. 14, as there would be a moratorium on the
Corporate Debtor. The provisions of Sec. 14 are reproduced as under:
NEW DELHI BENCH 563
“14. A moratorium in terms of Section 14 is also declared prohibiting

other authority;
(b) transferring; encumbering, alienating or disposing of by the corporate
(c) any action to foreclose, recover or enforce any security interest
Assets and Enforcement of Security Interest Act, 2002;
(2) The supply of essential goods or services to the corporate debtor as
may be specified shall not be terminated or suspended or interrupted
may be notified by the Central Government in consultation with any financial
sector regulator.
(4) The order of moratorium shall have effect from the date of such order
process period, if the Adjudicating Authority approves the resolution plan
under sub-section (1) of section 31 or passes an order for liquidation of corporate
5. The insolvency resolution professional shall also take steps to cause the
public announcement of the Corporate Insolvency Resolution Process and perform
all such duties in terms of Sections 15, 17 & 18. All personnel of the Corporate
Debtor including its promoters are expected to extend full cooperation to the
interim resolution professional as is provided by Section 19 and any other provisions
of the code. The insolvency professional shall submit his report to this Bench
within four weeks.
(Ina Malhotra)
Member Judicial
TABLE OF REJECTED ORDERS (upto 30th April, 2017)
S. Date of Order Name of the Name of the Applicant Reasons for rejection Appeal (if any) pending
No. Corporate Debtor (FC/OC/CD) FC: Financial before NCLAT
Creditor OC: Operational
Creditor CD: Corporate
TABLE OF REJECTED CASES
Debtor
1. 23rd January, 2017 M/s. AMR Infrastructures Nikhil Mehta & Sons (HUF) It was dismissed because the Yes, the matter was
Ltd. & Ors. (FC) petitioner claiming to be the financial posted for final hearing on
creditor was not covered under the 15th May, 2017.
definition of “Financial Creditor” as
provided under Section 5(7) of the
Code. Further the assured returns
which are claimed to be debt by the
petitioner are not covered under the
definition of “Financial Debt” under
2. 3rd February, 2017 M/s. Ultra Home Mr. Jwahir Lal Dhar & Anr. It was dismissed because the petition No
Construction Pvt. Ltd. (FC) was withdrawn by the petitioner on
the ground that the petitioner would
file fresh petition on the same cause
of action after duly complying with the
provisions of the Code.
565
As per the NCLT order, an Operational No
566
3. 20 th February, AMR Infrastructures Ltd. Col. Vinod Awasthy (OC)

Creditor means any person to whom
2017
a corporate debt is owed and whose
liability from the entity comes from a
transaction or operation. Under the
said case, the Operational Creditor
had neither supplied any goods nor
rendered any services to acquire the
status of an Operational Creditor.
Further the assured returns which
were claimed to be the debt by the
petitioner were not covered under the
definition of “Operational Debt” under
Section 5(21) of the Code. As per NCLT
order, operational debt means a
debt arising from the provisions of
goods or services, employment or
government dues. Under the said
case, the debt had not arisen from
any of the aforementioned actions.
4. 28 th February, BK Educational Services Parag Gupta (FC) Petitioner withdrew the application to No
2017 Pvt. Ltd. remove the defects present in the
application.
5. 1st March, 2017 M/s. Ambience Pvt. Ltd. M/s. One Coat Plaster (OC) As per the NCLT order, the outstanding No
amount is not a debt and the remedy
Goodwill Hospital and
demanded by the Applicant lies
IBC CASE LAW COMPENDIUM
outside the purview of the Code and
hence the petition was rejected.
6. 2nd March, 2017 Research Centre Ltd. Philips India Ltd. (FC) As per the NCLT order, the outstanding Yes, NCLAT vide order dated
amount is not a debt and the remedy 2nd May, 2017 sought written
demanded by the Applicant lies submissions from Goodwill
outside the purview of the Code. Hospital and Research
Centre Ltd.
7. 6th March, 2017 BRYS International Pvt. Chharia Holding Ltd. (FC) Petitioner being FC has not nominated No
Ltd. the name of Interim Resolution
Professional in the application and
has not filed the requisite records of
the fact within the time period
prescribed by the Tribunal.
8. 8th March, 2017 Earth Iconoic Anil Mahindroo & Anr. (FC) It was dismissed because the No
Infrastructure Pvt. Ltd petitioner claiming to be the financial
creditor was not covered under the
definition of “Financial Creditor” as
provided under Section 5(7) of the
Code. Further, the assured returns
which are claimed to be the debt by
the petitioner are not covered under
the definition of “Financial Debt” under
9. 8th March, 2017 M/s. Kings Airways M/s. Jeevan Credit and Improper filing of application, No
Limited Leasing Pvt. Ltd.(FC) absence of necessary documents in
567
the application and Applicant was
568
not “financial creditor” under the

Code.
10. 15th March, 2017 Action Ispat & Power Pvt. M/s. Prowess International The debt is time barred as per the No
Ltd. Pvt. Ltd. (OC) provisions of Limitation Act, 1963.
11. 16th March, 2017 M/s. Punj Lloyd Ltd. Fichtner Consulting Legal Counsel of Petitioner withdrew No
Engineers (India) Pvt. Ltd. the application upon realizing that he
(OC) will not be able to persuade the
Tribunal with his arguments.
12. 20th March, 2017 Mothers Pride Dairy Potrait Advertising and Petitioner withdrew the application in No
India Pvt. Ltd. Marketing Pvt. Ltd. (OC) order to file fresh application thereby
removing the defects present in the
earlier application.
13. 21st March, 2017 Alice Developers Pvt. Gurcharan Singh Soni & As per the NCLT order, an Operational No
Ltd. Kuldeep Kaur Soni (OC) Creditor means any person to whom
Further, the assured returns which
debt arising out from the provisions
of goods or services, employment or
14. 21st March, 2017 Unitech Ltd & Alice Gurcharan Singh Soni As per the NCLT order, an Operational No
Developers Pvt. Ltd. & Kuldeep Kaur Soni (OC) Creditor means any person to whom
569
15. 22nd March, 2017 Amrapali Infrastructure M/s. Ishwar Khandelwal Petitioner was enforcing the total No
570
Private Limited (OC) outstanding amount of Rs. 1.87 Crores

due to him from 11 group companies
upon 1 company only i.e the
respondent company from which he
only owes Rs. 76 Lakhs.
As per the NCLT Order, the aforesaid
action of the Petitioner is not in line
with the provisions of the Code.
16. 24th March, 2017 Soril Infra Resources Annapurna Infrastructure When the matter is already pending Yes, the matter was
Ltd. Pvt. Ltd. & Ors. (FC) for adjudication between the parties posted for hearing on 11th
in a court having jurisdiction to May, 2017.
adjudicate upon the same matter,
then subsequent application on the
same cause of action cannot be
allowed to proceed.
17. 29th March, 2017 DSC Ltd. Shri Rajesh Saini (OC) There is no evidence to term No
Respondent as defaulter and to
initiate insolvency process against
him.
18. 31st March, 2017 M/s. R.L. Steel & M/s. Deem Roll-Tech The application was dismissed by No
Energy Ltd. Limited (OC) NCLT on the grounds that:
• Petitioner did not annex any
proof of service of demand
notice to the Respondent in the
petition filed before NCLT.
• Respondent did not appear
before the Tribunal on the date
of hearing of petition.
• Since there is no specific bar
under the Code with regard to
the application of the provisions
of the Limitation Act, 1963,
application of the provisions of
the Limitation Act, 1963 in this

case make the debt raised by
the Petitioner time barred.
• Petitioner was seeking multiple
remedies on same course of
action in different legal forums.
19. 31st March, 2017 AMR Infrastructures Ltd. M/s. Mukesh Kumar & As per the NCLT order, an Operational No
Anr. (OC) Creditor means any person to whom
571
572

20. 31st March, 2017 J.B.K. Developers Pvt. Pawan Dubey & Anr. (OC) As per the NCLT order, an Operational Yes
Ltd. Creditor means any person to whom
21. 10th April, 2017 AMR Infrastructure Ltd. M/s. Creative Solutions (OC) The documents pertaining to the No
contract between the petitioner and
Respondent were improperly
executed. The raised invoice did not
reflect the name of the party against
whom the invoice has been raised.
Statement of Claims required to be
filed as per the provisions of the Code,

to sustain the claims of Petitioner, was
not filed.
22. 11th April, 2017 M/s. Getit Infoservices M/s. Nowfloats Winding up in respect of Corporate No
Pvt. Ltd. Technologies Pvt. Ltd. (OC) Debtor was pending in High Court and
applicant has not taken permission
from High Court to file for insolvency of
the corporate debtor in the Tribunal
under the provisions of the Code.
23. 27th April, 2017 Ozone Builders & Mr. Satish Mittal (OC) As per the NCLT order, an Operational No
Developers Pvt. Ltd. Creditor means any person to whom
said case the Operational Creditor
Further the assured returns which
573
574

24. 28th April, 2017 Gold Plus Glass Evviro International As per the terms of the contract, No
Industry Ltd. Corporation (OC) Applicant was required to provide
various services of particular
standard to the Respondent which it
failed to provide and accordingly
Respondent deducted the payment
of the Applicant on account of non
performance of the desired standard
of services and also intimated about
such deduction to the Applicant.
Applicant served a demand notice for
the outstanding amount of Rs. 11 Lakhs
(approximately) to the Respondent.
As per the NCLT order, the outstanding
amount is not a debt and the remedy
demanded by the Applicant lies
outside the purview of the Code and
hence the petition was rejected.
AHMEDABAD BENCH
S. Date of Order Name of the Name of the Applicant Reasons for rejection Appeal (if any)
No. Corporate Debtor (FC/OC/CD) FC: Financial pending before
Creditor OC: Operational NCLAT
Debtor
1. 17th April, 2017 Alok Industries Limited Arun Structural and No one was present on behalf of No
Engineers Pvt. Ltd. (OC) the Corporate Debtor at the time of
hearing.
2. 20th April, 2017 Sagar Automobiles Pvt. Master Engineering Works No one was present on behalf of the No
Ltd. (OC) Corporate Debtor at the time of
hearing.
3. 20th April, 2017 Shirani Automotive Pvt. Shree Raj Rajeshwari Car No one was present on behalf of No
Ltd. Care (OC) the Corporate Debtor at the time of
hearing.
4. 21st April, 2017 Entire Ceramics Ltd. Acme Specialties (OC) No one was present on behalf of No
the Corporate Debtor at the time of
hearing.
575
ALLAHABAD BENCH
576
Debtor
1. 28th April, 2017 J.K. Jute Mills Mazdoor Operational Creditor (name The subject matter in respect of which No
Morcha not mentioned) case was filed before Tribunal was
already pending before the Civil Court
of Kanpur, Uttar Pradesh. The
Applicant, while making application
to the Tribunal, mentioned that the
application is not pending before any
Court/Tribunal/Arbitration.
BENGALURU BENCH
Debtor
1. 17th April, 2017 Avni Energy Solutions M/s. Fortune Plastech (OC) Petition for initiating corporate No
Private Limited insolvency resolution process was

filed at the wrong NCLT Bench.
(Jurisdiction of the company lies with
Hyderabad Bench but the petition
was filed at Bengaluru Bench).
577
CHANDIGARH BENCH
578
Debtor
1. 17th April, 2017 Nexgen Laminators Pvt. SIDBI (FC) The petition was withdrawn by the No
Ltd. Petitioner with liberty to pursue the
petition for winding up of the
company which was pending in High
Court of Punjab and Haryana.
2. 18th April, 2017 Panacea Biotech Ltd. M/s. Wanbury Ltd. (OC) The amount mentioned as debt in the No
application has already been paid
by way of cheques.
HYDERABAD BENCH
Debtor
1. 20th February, 2017 M/s. Geometrix Laser Dr. BVS Lakshmi (FC) • Petitioner (Dr. BVS Lakshmi) Yes
Solutions Private Limited suppressed the material fact in the

petition that she was the “Promoter
Director” of the Respondent
(Geometrix Laser Solutions Private
Limited) till 14.03.2007.
• Amount in default claimed by
Petitioner was Rs. 91 Lakhs
(approximately). However, the
Petitioner did not admit anywhere
in the petition that she herself along
with her daughter owes Rs. 88
Lakhs (approximately) to the
Respondent.
• Petitioner failed to provide
documents in support to the
petition which would prove her
stand as a Financial Creditor within
the meaning of the Code.
579
2. 21st February, 2017 Kamineni Steel and M/s. Indian Bank (FC) Application for initiation of corporate No
580
Power India Private insolvency resolution process was

Limited already admitted under Section 10 of
the Code. Therefore, the Counsel of
Indian Bank withdrew the application.
3. 13th March, 2017 M/s. Lanco Infratech K.K.V Naga Prasad (OC) • The petition was dismissed by the Yes, the matter was
Limited Tribunal on the grounds that the posted for admission on
demand notice under Section 7 of 19th May, 2017.
the Code should be given by a
financial creditor and in this case
the petitioner, who was the
employee of the company, is not a
financial creditor.
• Moreover, at the time of filing of
this application, petitioner himself
owed Rs. 3,81,943 to the Company.
KOLKATA BENCH
Debtor
1. 24th February, 2017 HPCL Hindustan Motors Limited Petitioner moved application under No
the Code for seeking clarification in

respect of the provisions of Sick
Industrial Companies (Special
Provisions) Repeal Act, 2003.
th
2. 1 3 April, 2017 M/s. Hada Textile M/s. Hada Textiles Tribunal does not have power to No
Industries Limited Industries Limited (CD) amend the order of BIFR or to extend
the scheme period sanctioned by BIFR
under the Code as requested by the
Applicant.
3. 17th April, 2017 M/s. Mayapur Vastu Vinod Kothari Consultants Application was withdrawn by the No
Developments Pvt. Ltd. Private Limited (OC) applicant on the basis of “Terms of
Settlement” executed between both
the parties.
581
NEW DELHI BENCH
582
Debtor
1. 31st March, 2017 M/s. Unitech Hi-Tech Raman Seth & Anr. (OC) Claim referred as debt in dispute is No
Developers Ltd. not covered under the definition of
“debt” as prescribed in the Code.
2. 11th April, 2017 M/s. PTC Techno Pvt. Ltd. Speculum Plast Pvt. Ltd. (OC) The claim raised as dispute in the No
case has become time barred as per
the provisions of Limitation Act, 1963.
3. 13th April, 2017 M/s. Getit Stores Pvt. Ltd. Nowfloats Technolgies Pvt. Winding up in respect of Corporate No
Ltd. (OC) Debtor was pending in High Court
and applicant has not taken
permission from High Court to file for
the insolvency of the corporate debtor
in the Tribunal under the provisions of
the Code.
4. 21st April, 2017 M/s. Pal Mohan VDS Plastics Pvt. Ltd. (OC) Petitioner failed to prove in the Tribunal No
Electronics Pvt. Ltd. that he owes debt from the
Respondent and that the debt is
recoverable in nature.
5. 25th April, 2017 M/s. BK Educational Parag Gupta (FC) Corporate Debtor submitted the No
Services Pvt. Ltd. demand draft to the Petitioner for the
outstanding amount and requested
Tribunal to halt the commencement
of its insolvency resolution process.
583
MUMBAI BENCH
584
Debtor
1. 19th January, 2017 M/s. Arham Anmol M/s. Arham Anmol The matter was filed before NCLT, No
Projects Pvt. Ltd. Projects Pvt. Ltd. (CD) Mumbai Bench. It was dismissed for
default on the part of the applicant
as no one was present from the
applicant’s side at the time of
scheduled hearings.
2. 23rd January, 2017 M/s. Innoventive ICICI Bank Limited (FC) Default was already taken into Yes
Industries Limited consideration by the Tribunal and
case in respect of the default has
already been admitted.
3. 27th January, 2017 M/s. Mobilox M/s. Kirusa Software Pvt. Under the said case, the petitioner Yes, NCLAT vide order
Innovations Pvt. Ltd. Ltd. (OC) was required to attach details of dated 2nd May, 2017
transaction on which debt falls due stated that hearing has
and in default and copy of demand been concluded and
notice served to the debtor and other judgment has been
documents as provided under reserved and prayer to
Section 9 of the Code along with the file additional affidavit
petition and copy of invoices in order was rejected.
to prove his debt.
After looking at the documents, Bench
was of the view that the amount
claimed by the operational creditor
has already been received by them
from the corporate debtor.
4. 30th January, 2017 M/s. Swiber Offshore Arika Tours and Travels It was dismissed for default on the No
(I) Pvt. Ltd. Pvt. Ltd. (OC) part of the petitioner (Operational
Creditor) as no one was present from
the petitioner’s side at the time of

scheduled hearings.
5. 30th January, 2017 National Steel and Smart Timimg Steels Ltd. Petitioner failed to file the requisite Yes, NCLAT vide order
Agro Industries Ltd. (OC) document before the Bench within the dated 1st May, 2017 heard
stipulated time and hence the petition parties and judgement
stood rejected. was reserved.
6. 30th January, 2017 M/s. Swiber Offshore Astra Offshore Sdn Bhd. Petitioner failed to file the requisite Yes
(I) Pvt. Ltd. (OC) document before the Bench within the
stipulated time and hence the petition
stands rejected.
7. 9th February, 2017 M/s. Shree Ganesh State Bank of India (FC) It was dismissed because the petition No
Forgings Ltd. was withdrawn by the petitioner on
the ground that the petitioner will take
all the necessary steps as prescribed
by the law.
585
8. 22nd February, 2017 M/s. Infinity Fab Sun Line Suppliers Pvt. Ltd. Since the Respondent Company is No
586
Engineering Company (OC) registered in Karnataka, so as per

Pvt. Ltd. the jurisdiction, the case is to be filed
at NCLT, Bengaluru Bench rather than
NCLT, Mumbai Bench.Therefore,
learned counsel of the Petitioner
withdrew the petition with the liberty
to file the same before NCLT,
Bengaluru Bench.
9. 22nd February, 2017 M/s. Waaree Energies Gujarat Borosil Ltd. (OC) Petitioner being Operational Creditor No
Ltd. is under an obligation to give proper
notice u/s 8 of the Code before filing
of application under the Code, which
the Petitioner failed to give.
10. 24th February, 2017 M/s. HDO Master Voss International It was dismissed because the petition No
Technologies Ltd. Projects Pvt. Ltd. (OC) was withdrawn by the petitioner on
the ground that the petitioner will file
fresh petition on the same fact and
cause of action.
11. 24th February, 2017 Ruchi Soya Industries Ltd. B.G.A Trdelink Pvt. Ltd. (OC) Petitioner itself withdrew the application No
in order to file fresh application.
12. 1st March, 2017 Neelkanth Township Urban Infrastructure In the application, as per the Petitioner Yes
and Construction Pvt. Trustee Limited (OC) “the amount claimed to be in
Ltd. default” and “the default
occurred” were reflecting different
amount of money which needs to be
the same.
13. 10th March, 2017 M/s. Supreme Mrs. Seema Gupta (OC) Petitioner, being Operational Creditor, No
Infrastructure India Ltd. is under an obligation to give proper
& Ors. notice u/s 8 of the Code before filing
of application under the Code, which
the Petitioner failed to give.
14. 14th March, 2017 Esskay Motors Pvt. Ltd. HDFC Bank Limited (FC) Petitioner withdrew the application on No
account of mutual settlement between
the Petitioner and Respondent.
15. 14th March, 2017 Miltech Industries Pvt. J J Plastboy Pvt. Ltd. (OC) Petitioner requested for the restoration No
Ltd. of the petition which was already
dismissed by the Tribunal on account
of the defaults present in the petition.
16. 23rd March, 2017 M/s. Hubtown Limited Rediffusion Dentsu Young Petitioner withdrew the application on No
and Rubicam Pvt. Ltd. (OC) account of mutual settlement between
the Petitioner and Respondent.
17. 4th April, 2017 Raj Oil Mills Ltd. Mukhi Tradelink (OC) Petitioner itself withdrew the No
application in order to file fresh
application.
18. 9th April, 2017 Raj Oil Mills Ltd. General Engineering Works Petitioner itself withdrew the No
(OC) application in order to file fresh
application.
19. 10th April, 2017 Nirmal Lifestyle Ltd. Parco Engineers (Mumbai) Petitioner itself withdrew the No
Pvt. Ltd. application in order to file fresh
application.
587
20. 18th April, 2017 M/s. Siddhitch Homes Dewan Housing Finance Petitioner withdrew the application No
588
Pvt. Ltd. & Neha Corporation Limited because Petitioner admitted that no
Hemant Agarwal & outstanding dues are pending from
Mr. Hemant Mohan the Respondent towards the
Agrawal Petitioner.
PRINCIPAL BENCH 589
PRINCIPAL BENCH
PRINCIPAL BENCH 591
BEFORE THE COMPANY LAW NATIONAL TRIBUNAL

PRINCIPAL BENCH
NEW DELHI
C.P NO. (IB)-43(PB)/2017
CA NO.
CORAM:
PRESENT: CHIEF JUSTICE M. M. KUMAR
Hon’ble President
SH. R.VARADHARAJAN Hon’ble Member (J)
ATTENDANCE-CUM-ORDER SHEET OF THE HEARING BEFORE PRINCIPAL BENCH
Eviro International Corporation
Vs
Gold Plus Glass Industry Ltd.
2016
For the Respondent : Shri Vivek Singh, Advocate
ORDER
This is an application filed under Section 9 of the Insolvency and Bankruptcy

Code, 2016 (for brevity the ‘Code’) with a prayer to initiate insolvency process
against the respondent - Gold Plus Glass Industry Limited. The Applicant has
claimed himself to be an ‘Operational Creditor’ and has named the respondent
as ‘Corporate Debtor. ’
2. Brief facts of the case necessary for disposal of the controversy raised in the
application are that the Applicant was engaged by the respondent for supply,
erection, installation and commissioning of wet scrubber system at the
respondent’s float glass manufacturing facility at Roorkee, as per work order
bearing number GPGIL/14-15/SCRUBBER dated 25.09.2014, for a total
consideration of INR 57,00,000 (Rupees Fifty-Seven lakhs only). On 29.10.2014,
during the erection of equipment at the site, it was also agreed by the respondent
that for commissioning of equipment, certain additional equipments would also
be required for which extra charges were to be levied. On 18.11.2014, the

respondent in principle approved the purchase and installation of additional
equipment verbally and the Applicant was assured that the actual cost towards
additional equipments would be paid. The project was completed and a trial run
of the equipment/additional equipment was given in the presence of the
representative of the respondent, which was re-run on 12.04.2015 to the entire
satisfaction of the respondent. The Applicant also attended the grievance of the
respondent from time to time when complaint was received that the equipment
was not working at its 100% capacity. It was on the basis of the equipment
installed that the respondent secured the statutory environmental clearances to
set up and operate the manufacturing facilities in respect of glass items on
22.05.2015. The respondents have been complaining about the functioning of
the plant during the period 25.06.2015 and 13.07.2015. However, on a visit of the
Applicant on 26.09.2015, the equipment was found in working order and the
glass manufacturing was in progress at full swing. The Applicant has raised
invoices against the respondent for supply, installation/erection of additional
equipment. It is admitted that a total sum of Rs.49,28,200/- has been paid, which
is detailed as under:
a) INR 5,50,000 (Rupees Five Lakhs and Fifty Thousand only) on 29.09.2014;
b) INR 8,00,000 (Rupees Eight Lakhs only) on 17.12.2014;
c) INR 15.00,000 (Rupees Fifteen Lakhs only) on 26.12.2014;
d) INR 15.00,000 (Rupees Fifteen Lakhs only) on 12.02.2015;
e) INR 4,00,000 (Rupees Four Lakhs only) on 16.03.2015; and
f) INR 1,78,200 (Rupees One Lakh Seventy-Eight Thousand and Two Hundred
only) on 16.04.2015.
3. The Applicant claims to have sent e-mails on 08.10.201 5 and 17.11.2015 to the
respondent to claim the arrears of amount payable on account of supply,
installation/erection of the additional equipment.
4. The respondent served upon the Applicant a notice through their counsel and
claims to have suffered losses on account of non-supply / sub-standard supply
of material and delay in completion of work. The aforesaid notice was duly
replied by the Applicant on 12.01.2016 specifically denying the allegations and
raising the payment for operational debt alongwith interest. The respondent in
order to pressurise the Applicant to give up its demand of Rs. 10,14,190/-, filed a
Petition under Section 156(3) of Cr. P.C. for registration of an FIR against the Applicant
alleging non-performance of the Work Order. The aforesaid Petition was dismissed
by the Judicial Magistrate, Roorkee on 11.04.2016, which was registered at no.
34/2016.
PRINCIPAL BENCH 593
5. The Applicant has claimed that it has procured information in response to RTI
which discloses that the respondents were granted statutory environmental
clearances i.e. the consent to set-up and operate the glass manufacturing facility
by the government departments on 22.05.2015, which was not possible in the
absence of equipment installed by the Applicant.
6. On 08.02.2017, the Applicant issued a statutory notice for payment of operational
debt amounting to Rs. 10,14,190/- along with interest @ 24%. The aforesaid notice
was not replied which leads to an inference that the respondent is unable to pay
its debt.
7. In the reply filed by the respondent, it has been alleged that the Applicant has
not performed its part of contract which has resulted in loss to the respondent.
According to the respondent, the Application is liable to be rejected in terms of
Section 9(5)(ii) of the Code in as much as the present dispute relates to non-
performance of contractual obligations of the Applicant under the work order. The
respondent had initiated arbitration proceedings. In that regard, a notice was
issued to the Applicant on the basis of arbitration clause 19 of the work order on
02.04.2017. Even a complaint was made in May 2015 which has been dismissed.
Against the order of the Magistrate, a Revision Petition is pending. Accordingly, it
has been urged that Application under Section 9 of the Code is not maintainable
as the Applicant has not been able to complete its work as per the provisions of
the work order. The respondent has already made payment of Rs.49,28,200
lakhs out of the total work order of Rs.57 lakhs. The rest of the payment could not
be made as the Applicant has failed to perform its part of the contract.
8. We have heard learned counsel for the parties.
9. It has come on record that in the notice dated 25.12.2015 (Respondent-1), the
respondents have pointed out that the Applicant had received a sum of
Rs.49,28,200/- from them and the aforesaid fact has not been disputed by the
Applicant. In the aforesaid notice, the respondent further pointed out that as per
the work order, the work has not been completed and false assurances were
given by the Applicant to complete the work. On the basis of the aforesaid dispute,
the respondent asserted its right to appoint its Plant Manager as a sole arbitrator
to decide the dispute However respondent afforded two weeks’ time for
completing the erection work and getting the wet scrubber properly commissioned
from the date of receipt of the notice sent by speed post. Thereafter, the respondent
initiated proceedings under Section 156(3) of the Criminal Procedure Code for
registration of an FIR against the Applicant which has been dismissed by Judicial
Magistrate on 11.04.2016. Against the order of the Magistrate, a Revision Petition
is pending before the learned Session Judge. It is further pertinent to notice that
on 03.04.2017, the respondents have finally appointed its Plant Manager as a
sole arbitrator in terms of clause 19 of the work order. It is, therefore, evident that
there is record of dispute, which is to the notice of the Applicant. The aforesaid
record would be an impediment for initiation of insolvency process in view of the
provisions of Section 9(5)(ii)(d). Therefore, the Application is liable to be dismissed.
10. The argument of the Applicant that Respondent had secured consent to run its
unit after installation of wet scrubber system and it should be treated as sufficient
evidence of proper functioning of its equipment, has failed to impress us because
the stand taken by the respondent is that it spent double the amount or more on
running the factory on furnace oil/gas in comparison to what it would have spent
on running on pet-coke for which the wet scrubber was essential and on oil/gas.
In support of the submission, respondent has placed on record a copy of the
ledger showing the amount spent on running the plant on oil/gas. Therefore, the
consent to operate the plant granted by the environment authorities is not
necessarily dependent on the wet scrubber equipment. Moreover, it has come
on record that the respondent got the wet scrubber installed by the Applicant
inspected through specialised agencies in this field with the name of APS Enviro
System and it was found that the machine had several deficiencies and unless
those deficiencies were rectified, the machine would not be functional. A copy of
the report dated 24.06.2015 has also been placed on record (R-6).
11. For the reasons, aforementioned, this Application fails and the same is
dismissed.
(CHIEF JUSTICE M.M.KUMAR)
PRESIDENT
(R. V ARDHARAJAN)
MEMBER (JUDICIAL)
PRINCIPAL BENCH 595

NEW DELHI
C.P NO. (IB)-66(PB)/2017
C.A. NO.
CORAM :
Hon’ble President
SH. R.VARADHARAJAN
Hon’ble Member (J)
ATTENDANCE-CUM-ORDER SHEET OF THE HEARING BEFORE PRINCIPAL BENCH
Mr. Satish Mittal
Vs.
Ozone Builders & Developers Pvt. Ltd.
SECTION OF THE COMPANIES ACT: U/s 9 of Insolvency and Bankruptcy Code 2016
1. Rishi Sood Advocate Petitioner/Applicant
ORDER
This is an application filed under Section 9 of the Insolvency and Bankruptcy

Code, 2016 (for brevity the ‘Code’) with a prayer for triggering insolvency process
against M / s. Ozone Builders & Developers Private Limited. The Applicant has
claimed that he is, an operational creditor, within the meaning of Section 9 read
with Section 5 (20) of the Code. He has named the respondent as Corporate
Debtor.
2. Brief facts of the case necessary for disposal of the controversy may first be
noticed. The Applicant has averred that in pursuance of the representations made
by the respondent, he was induced to deposit advance amount for purchase of a
plot in the Ozone City which is a residential township belonging to respondent
with a promise for its allotment within a period of one year from the date of
payment. Accordingly, he deposited a sum of Rs. 50,00,000/- (Rupees Fifty Lakhs
only) for booking of plots. A sum of Rs. 30,00,000/- (Rupees Thirty Lakhs only) was
paid on 22.02.2013 in cash against the receipt issued by the respondent. After a
gap of three months, the balance amount of Rs. 20,00,000/- (Rupees Twenty
Lakhs only) was again paid in cash, although no receipt was issued in respect of
the balance payment despite the commitment to issue the same. According to
the Applicant, the entire amount was to be refunded in case of non-
confirmation of booking in the project within a period of one year. On the aforesaid
basis, the Applicant has claimed that a sum of Rs.30,00,000/- (Rupees Thirty
Lakhs only) became due for refund after a period of one year on 22.2.2014
alongwith interest @ 18% per annum. It has been asserted by the Applicant that
he made it absolutely clear to the respondent that he was no longer interested in
the Project because the respondent had violated the terms and conditions on the
basis of which the amount was deposited by the Applicant. The aforesaid facts
have been admitted on 01.09.2016 before the Investigating Officer of Economic
Offence Wing, Central Zone, Faridabad by the respondent. However, the Applicant
has remained unsuccessful to recover the principal amount of Rs.30,00,000/-
(Rupees Thirty Lakhs only) plus interest.
3. The Applicant has claimed that a copy of the Demand Notice has already been
served as per the requirement of Rule 5 of the Insolvency and Bankruptcy
(Application to Adjudicating Authority) Rules, 2016 and has called upon the
respondent to make payment of the due amount. According to the Applicant, in
the reply sent on 06.02.2017, a motivated and false defence has been raised to
dispute the demand raised by the Applicant. It has not been shown by the
respondent that any suit or arbitration proceedings in terms of Section 8(2)(a) of
the Insolvency and Bankruptcy Code are pending so as to stop initiation of
insolvency process. It is pertinent to notice that in their reply dated 06.02.2017,
the respondent has taken a stand that a sum of Rs.30,00,000/-
(Rupees Thirty Lakhs only) was deposited by the Applicant for taking allotment of
plot/ flat in Ozone City, Aligarh and the money was invested in the project. It was
further clarified that the refund was not possible but they were committed to allot
a unit to the Applicant and has given two options namely allotment of flats or land
lying vacant with the respondent.
4. We have heard the learned counsel at a considerable length and are of the
view that the matter is covered against the Applicant by our order dated 20.02.2017
passed in C.P. No.(IB)-10(PB)/2017, titled as Col. Vinod Awasthy v. AMR
Infrastructures Ltd. In the aforesaid case, we have taken the view on Section 9
and Section 5(20) & (21), which is evident from the perusal of following paras:
“7. A perusal of section 9 of the code would show that in order to maintain, an.
application. as an ‘Operational Creditor’ the Petitioner has to satisfy the
requirements of section 5(20) and (21) of the Code. According to section 9(1) a
petition like the one in hand could be maintained only by an ‘Operational
Creditor’ against the ‘Corporate Debtor. The aforesaid expression has been
PRINCIPAL BENCH 597
defined in section 5(20) & (21) which would also be attracted and applicable.
Section 5 (20) & (21) of the code read thus:
“5. In this Part, unless the context otherwise requires,-
(20) operational creditor” means a person to whom an operational debt is
or transferred
(21) operational debt” means a claim in respect of the provision of goods or
services including employment or a debt in respect of f the repayment of dues
Government. any State Government or any local authority;”
8. It is evident from the perusal of the aforesaid definition of ‘Operational Debt’
that it is a claim in respect of provision of goods or services including dues on
account of employment or a debt in respect of repayment of dues arising under
any law for the time being in force and payable to Centre or State Government or
local authority. It is thus clear that debt may arise out of provision of goods or
services or dues arising out of employment or dues arising under any law for
time being in force and payable to the Centre/State Government. The framer of
the Code have also defined the expression ‘Financial Debt’ in section 5(8) to
mean a debt which is disbursed against the consideration of time value of money.
However the framer of the Code has not included in the expression ‘Operation
Debt’ as any debt other than the ‘Financial Debt’. It is thus confined to aforesaid
four categories like goods, services. employment and Government dues. In the
present case the debt has not arisen out of the provisions of goods or services.
The debt has also not arisen out of employment or the dues which are payable
under the statute to the Centre/State Government or local body. The refund sought
to be recovered is necessarily associated with the delivery of the possession of
immovable property which has been delayed.
9. The next question is whether the Petitioner could be regarded as an ‘Operational
Creditor’ within the meaning of section 5(20). The ‘Operational Creditors’ are
those persons to whom the ‘Corporate Debt’ is owed and whose liability from the
entity comes from a transaction on operations. The final report of the Committee
in para 5.2.1 defines ‘Operational Creditor’ like the wholesale vendor of spare
parts whose spark plugs are kept in inventory by Car Mechanic and who gets
paid only after spark plugs are sold to acquire the status of `Operational Creditor’
so and so forth. The Petitioner in the present case has neither supplied any goods
nor has rendered any service to acquire the status of an `Operational Creditor’.
10. We are further of the view that given the time line in the code it is not possible
to construe section 9 read with section 5(20) & (21) of the Code so widely to
include within its scope even the cases where dues are on account of advance
made to purchase the flat or a commercial site from a construction company like
the Respondent in the present case especially when the Petitioner has remedy
available under the Consumer Protection Act and the General Lou, of the land.
Therefore we are not inclined to admit the petition.”
5. When the facts of the present case are examined in the light of the law laid
down in the case of Col. Vinod Awasthy (supra) no doubt is left that the application
is liable to be dismissed. On facts and law, it is covered by the aforesaid judgment
against the applicant.
6. For the aforesaid reasons, we find no merit in this application and the same is
hereby dismissed. Keeping in view the tenderness of the provisions of IBC we
refrain from saddling the Applicant with cost. We make it further clear that any
observations made in this order shall not be construed as an expression of
opinion on the merit of the controversy as we have refrained from entertaining
the application at the initial stage itself when the respondent has not even entered
appearance. Therefore, the right of the Applicant before any other forum shall not
be prejudiced on account of dismissal of instant application.
PRESIDENT
(R. VARDHARAJAN)
MEMBER (JUDICIAL)
Dated: 27.04.2017
PRINCIPAL BENCH 599

SPECIAL BENCH, NEW DELHI
Company Application No. (I.B.)45(PB)/2017
Present: SHRI R.VARADHARAJAN, MEMBER (JUDICIAL)
& Ms. DEEPA KRISHAN, MEMBER (TECHNICAL)
Under Section 9 and other applicable provisions of the Insolvency and Bankruptcy
Code, 2016 read with the Rule 6 of the Insolvency and Bankruptcy (Application to
In the matter of:
1. M/s NOWFLOATS TECHNOLOGIES PVT. LTD.
3rd FLOOR, PLOT NO.1269, ROAD NO.36, JUBILEE HILLS CHECK POST,
HYDERABAD- 500033, TELANGANA
Operational Creditor/Applicant
2 M/s GETIT INFOSERVICES PVT. LTD.
1205,12th FLOOR, NEW DELHI HOUSE, BARAKHAMBA ROAD,
NEW DELHI -110 001
Corporate Debtor
Counsel for the Petitioners: (i) Ms. Apoorva Bhumesh, Advocate
(ii) Ms. Madhavi Khare, Advocate
ORDER
1. The Applicant Company has moved the application under the provisions of
Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for
brevity referred to as Adjudicating Authority Rules) seeking that the Corporate
Insolvency Resolution Process be set in motion against the respondent company.
The facts giving rise to such a prayer is that the respondent company and the
applicant had entered into a service agreement wherein the applicant company
had agreed to render certain IT related services to the respondent company and
that from time to time for the services rendered invoices since the year 2014 had
been raised for the payment of service fee. However the respondent company had
been defaulting in the payment of dues and that presently a sum of Rs.1,93,37,105/
- is due excluding interest payable by the respondent company to the applicant.
2. In view of the same and also taking into consideration that certain internal
disputes were going on between the management and its shareholders, the
applicant had issued a notice dated 07.10.2016 under the provisions of Section
433(e) and Section 434 of Companies Act, 1956 for winding up the respondent
company on the ground of inability to pay its debts and in relation to the notice no
reply has been received even though served. Upon coming into force of the
Insolvency & Bankruptcy Code, 2016 (for brevity referred to as IBC) the applicant
in the capacity of an Operational Creditor as defined under IBC issued a Notice of
Demand as contemplated under Rule 5 of the Adjudicating Authority Rules at the
registered office of the respondent company which notice of demand has been
returned unserved with the endorsement 'left'. Subsequent notices of demand
on 14.02.2017 have also been returned with similar endorsements. In addition it
is claimed by the applicant that copies of the notice of demand have also been
sent to the key managerial personnel as well as the directors of the respondent
company on 22.02.2017 through e-mail. The amount due to the applicant by the
respondent company remains unpaid and hence taking into consideration the
circumstances it is just, fair and equitable and in the interest of justice that the
corporate insolvency process be initiated against the respondent company as
contemplated under the provisions of IBC.
3. During the course of hearing on 10.04.2017 we were made to understand by
the representative of the Official Liquidator's office that in relation to the respondent
company the Hon'ble High Court of Delhi has appointed the Official Liquidator as
the provisional Liquidator in proceeding for winding up initiated before it in terms
of Section 450 of the Companies Act, 1956. When confronted with the above said
fact, the counsel for the petitioner sought to distinguish the winding up proceedings
pending before the Hon'ble High Court of Delhi and the Insolvency Resolution
Process pending before this Tribunal as initiated by the petitioner, both
proceedings however in relation to the same company, namely the respondent.
This Tribunal however apprised the counsel for the petitioner about Section 434
of the Companies Act, 2013 relating to transfer of proceedings as well the recent
changes brought about by way of insertions by the Central Government by virtue
of 5.0. 3676(E) dated 07.12.2016 made effective from 15.12.2016.
4. Based on request of the Counsel for the Applicant the matter was adjourned
by a day to give an opportunity to the counsel to peruse the above said notification
as well as to make submissions in relation to legal position as may be applicable
under the circumstances. When the matter was again taken up on 11.04.2017, the
counsel for the applicant filed written submissions in relation to maintainability of
the petition under the provisions of IBC. Going through the written submissions
as filed by the counsel for the applicant it is seen that an attempt is sought to be
made that the provisions of IBC 2016 will prevail notwithstanding anything
inconsistent therewith contained in any other law for the time being in force and
further in the absence of any enabling provision to approach Hon'ble High Court
PRINCIPAL BENCH 601
in a pending winding up proceedings the application as filed by the applicant

under Section 9 of IBC has to be admitted if conditions laid down under Section
9(5) are complied with and further the object of IBC is materially different from the
winding up proceedings before Company Court.
5. Before proceeding to deal with the above submissions on merits it will be in
order to consider the Notification issued by the Central Government as noted in
para (3) supra the relevant portions of which are extracted below:-
S.O. 3676 (E) -
(1) This Order may be called the Companies (Removal of Difficulties) Fourth
Order, 2016.
(2) It shall come into force with effect from the 15th December, 2016.
2. In the Companies Act, 2013, in Section 434, in sub-section (1), in clause (c),
after the proviso, the following provisos shall be inserted, namely :
"Provided further that only such proceedings relating to cases other than
winding-up, for which orders for allowing or otherwise of the proceedings are
not reserved by the High Courts shall be transferred to the Tribunal:
Provided further that -
(i) all proceedings under the Companies Act, 1956 other than the cases
relating to winding up of companies that are reserved for orders for allowing
or otherwise such proceedings; or
(ii) the proceedings relating to winding up of companies which have not
been transferred from the High Courts ;
shall be dealt with in accordance with provisions of the Companies Act, 1956
and the Companies (Court) Rules, 1959".
6. In view of the above notification, winding up petitions pending against the
respondent company has not been transferred by the Hon'ble High Court of Delhi
to this Tribunal and it is seized of the same. Further a careful reading of the order
passed by the Hon'ble High Court of Delhi on 03.02.2017 the material portion of
which is reproduced hereunder:
Under these circumstances, I am satisfied that the present batch of petitions
needs to be admitted forthwith. Consequently, the petitions are admitted and
the Official Liquidator attached to this Court is appointed as the Provisional
Liquidator. He is directed to take over all the assets, books of accounts and
records of the said Company forthwith. The citations be published in the Delhi
editions of the newspapers 'Statesman' (English) and 'Veer Arjun' (Hindi), as
well as in the Delhi Gazette, at least 14 days prior to the next date of hearing.
The cost of publication is to be borne by the petitioners collectively who shall

tentatively deposit a sum of Rs.75,000/- with the Official Liquidator within 2
weeks, subject to any further amounts that may be called for by the liquidator
for this purpose, if required. The Official Liquidator shall also endeavor to prepare
a complete inventory of all the assets of the said Company when the same are
taken over; and the premises in which they are kept shall be sealed by him. At
the same time, he may also seek the assistance of a valuer to value all assets
to facilitate the process of winding up. It will also be open to the Official Liquidator
to seek police help in the discharge of his duties, if he considers it appropriate
to do so. The Official Liquidator to take all further steps that may be necessary
in this regard to protect the premises and assets of the said Company.
In addition, the directors of the said Company shall file their statement of affairs
within 21 days from today before the Provisional Liquidator. It is made clear that
in the event the said statement of affairs is not so filed within the specified time,
the concerned Directors, including the Managing Director of the said Company
shall remain personally present in Court on the next date of hearing, in order to
enable this Court to examine them, if required, on that date.
The said Company, as well its directors, are restrained from alienating,
encumbering, or otherwise parting with possession of the assets of the said
Company without the leave of this Court.
A copy of the petition along with annexures be supplied to the Official Liquidator.
The Official Liquidator shall file a compliance report before the next date of
hearing.
Renotify on 27.04.2017.
In view of the nature of allegations and counter allegations made by the two
groups of promoters and shareholders of the said Company in relation to the
defalcation of money and assets belonging to the said Company, it is further
considered necessary, in my opinion, to direct the Serious Fraud Investigation
Office to investigate into the affairs of the said Company and file a report in that
behalf within two months from today. Ordered accordingly.
A copy of this order be sent to the Serious Fraud Investigation Office forthwith.
The above order leaves no doubt as to the present status of the respondent
company.
7. Taking into consideration the above order passed by the Hon'ble High Court of
Delhi as well as the Notification issued by the Central Government and as extracted
above it is clear that the provisions of Companies Act, 1956 will govern in relation
to the proceedings pending before the Hon'ble High Court of Delhi and not the
Companies Act, 2013 as contended by the counsel for the applicant. If that be so,
PRINCIPAL BENCH 603
no suit or other legal proceeding shall be proceeded with, against the company,
except by leave of the Court which is seized of the winding up proceedings. In the
present instance no leave has been obtained by the applicant to proceed with
present proceedings initiated by the applicant company before this Tribunal and
obviously this Tribunal is therefore handicapped in proceeding further in relation
to the above company petition.
8. Viewed from another angle also, assuming that this Tribunal proceeds further as
canvassed by the petitioner in admitting the petition de-horse of the winding up
proceedings, on such admission this Tribunal is enjoined to appoint an Interim
Resolution Professional who is required to perform under the provisions of IBC
including duties enjoined under Section 18 of IBC, more particularly so of sub
section (e) of Section 18 of that of taking control and custody of any asset which the
corporate debtor has ownership rights as well as those envisaged under Section
17 of IBC of taking control of the management of affairs of corporate debtor. Obviously
the above actions of the Interim Resolution Professional will result in a collusive
course of action with that of the functioning of the provisional liquidator as directed
by the Hon'ble High Court of Delhi. It is to be borne in mind that both winding up
proceedings under the erstwhile Companies Act of 1956 as well as the Insolvency
Resolution Process is initiated for the benefit of the general body of creditors and is
a representative action and not for the recovery of money of the individual creditor
for which necessarily claims are required to be submitted to the Official Liquidator
or the Interim Resolution Professional as the case may be. In the instant case in
view of the matter pending before the Hon'ble High Court of Delhi which has also
thought it fit to appoint the Official Liquidator as the Provisional Liquidator of the
respondent company, the Interim Resolution Professional, if appointed will again
be put on a collusive course with the Official Liquidator even in accepting the claims
as may be filed as envisaged under Section 21 of IBC.
9. Taking into consideration the above aspects and legal position we are not
inclined to accept the submissions put forth by the Counsel for the Applicant and
we are constrained to reject the application. Before parting we make it clear that
any observations made in this order shall not be construed as an expression of
opinion on the merit of controversy as we have refrained from entertaining the
application at the initial stage itself. Therefore the right of the applicants before
any other forum shall not be prejudiced on account of dismissal of instant
application.
(DEEPA KRISHAN)
MEMBER (TECHNICAL)
(R.VARADHARAJAN)
MEMBER (JUDICIAL)

PRINCIPAL BENCH
NEW DELHI
Company Application No. (I.B.)34/PB/2017
Present: SHRI R.VARADHARAJAN, MEMBER (JUDICIAL)
& Ms.DEEPA KRISHAN, MEMBER (TECHNICAL)
In the matter of:
Section 9 and other applicable provisions of the Insolvency and Bankruptcy Code,
2016 read with the Rule 6 of the Insolvency and Bankruptcy (Application to
In the matter of:
1. M/s CREATIVE SOLUTIONS
B-2, 2185, DDA FLATS VASANT KUNJ,
NEW DELHI - 110 070
2 AMR INFRASTRUCTURE LIMITED
"AMR HOUSE" 2425/11,GURUDWARA ROAD
KAROL BAGH NEW DELHI -110 005
Corporate Debtor
Counsel for the Petitioners: (i) Shri Rohit K Aggarwal, Advocate
(ii) Shri Ajay Baury, Advocate:
ORDER
1. This is a petition filed by the petitioner claiming to be an 'Operational Creditor'

under the provisions of the Insolvency and Bankruptcy Code, 2016 (for brevity
referred to as IBC) along with attendant Rules against the respondent company
which is claimed to be the 'Corporate Debtor' of the petitioner. The petitioner has
averred in the petition that a sum of Rs.1,08,99,705/= is due and outstanding
from the respondent company in relation to the services rendered relating to
design and development of the project "Kessel 1-Valley" at Greater Noida of the
respondent company. Further, it is claimed that the petitioner has also rendered
its services for construction of the office spaces of the respondent company in
Noida.
2. In support of the claim made by the petitioner against the respondent, bills/
invoices in relation to the work carried out, it is claimed have been annexed and
PRINCIPAL BENCH 605
it is also the claim of the petition that the respondent company had duly
acknowledged all the bills and invoices raised against it all of which annexed as
Annexure-A/l(colly). It is the further claim of the petitioner company that out of the
work carried out by the petitioner amounting to Rs.3,53,61,884/=, the respondent
company has only made a part payment amounting to Rs.2,44,62,179/= and the
balance of Rs.1,08,99,705/= is still due and outstanding from the respondent
company. Repeated reminders made by the petitioner to the respondent company
to pay the balance amount has not borne any fruit and in the circumstances in
relation to the unpaid debt being an operational debt as defined under the
provisions of IBC, the petitioner had sent a notice of demand dated 30.01.2017
which is annexed as Annexure-A/3. Despite the receipt of the notice of demand
as annexed as Annexure- A/4, the respondent company has neither paid the
amount nor chosen to send a reply to the said notice of demand dated 30.01.2017
and in the circumstances the present petition has been filed by the petitioner
invoking the provisions of IBC for initiating the Corporate Insolvency Process of
the respondent company.
3. The above matter was listed before the Hon'ble Principal Bench on 28.03.2017
and on the said date the petitioner was directed to serve notice of the petition on
the respondent company in order to enable the respondent to make their
submissions in respect of the claim made by the petitioner/applicant with a view
to follow the principle of natural justice which this Tribunal is mandated to adhere
to as per the provisions of Companies Act, 2013. On 30.03.2017, the respondent
company was duly represented by a counsel who claimed that the bills/invoices
raised against the respondent company are all bogus and sought for a week's
time to file the reply with a copy in advance to be served on the counsel for the
petitioners/applicant and the matter was further posted for hearing on 10.04.2017
by the Hon'ble Principal Bench adorned by the Hon'ble President along with the
other Member.
4. In the circumstances, the matter was listed before this Special Bench on
10.04.2017 for further consideration. However, during the course of the hearing, it
was noticed that the respondent company had failed to comply with the directions
passed by the Principal Bench on 30.03.2017 in relation to filing of reply with a
copy in advance to the counsel opposite. The counsel for petitioner/applicant
vehemently objected to the reply being taken on record as it has been filed
beyond the time granted by the Hon'ble Principal Bench. Further, it was pointed
out by the counsel for the petitioner that IBC does not contemplate an opportunity
being given to the respondent/Corporate Debtor in filing of objections/reply to
the claim of the Operational Creditors. It was also pointed out by the counsel for
the petitioner that in the absence of the notice of dispute being not filed in reply to
the notice of demand dated 30.01.2017, it must be imputed that the respondent
company has accepted the liability and in the circumstances this Tribunal should
necessarily initiate Corporate Insolvency Process as prayed for in the Petition.
5. Per-contra counsel for the respondent company submitted that on the face of
it all the invoices/bills which have been raised are bogus as contended during
the course of the previous hearings and a perusal of the invoices to sustain the
claim produced by the petitioner as Annexure- A1(colly) does not even contain
the name of the party against whom such invoices have been raised nor the date
of invoices. Further, it is also pointed out by the learned counsel for the respondent
company that the registration number in relation to service tax or in relation to
sales tax or any other fiscal statute of like nature has not been printed on the face
of bills/invoices raised. In relation to the so called acknowledgement, it is
contended by the respondent company that Mr. Vijay Yadav who was in
employment with the company previously (i.e) prior to the period 2014 and hence
he could not have acknowledged on behalf of the company subsequently to the
said date. Learned counsel for the respondent company/ Corporate Debtor also
pointed out that no statement of account detailing the transactions between the
petitioner and the respondent company has been produced for the relevant
period and as to how the petitioner has arrived at the claim of Rs.1,08,99,705/-
and also as to how a sum of Rs.2,44,62,179/- is claimed to have been paid by the
respondent company when actually a sum of Rs.45,00,000/- or thereabouts
have been paid for the work done. Hence, in the absence of any material being
produced to decipher the actual amount of claim as made by the petitioner, the
petitioner cannot initiate the Corporate Insolvency Resolution Process as prayed
for in the Petition and hence the Petition is liable to be dismissed.
6. We have carefully considered the rival submissions made by the respective
parties as well as the pleadings and documents filed by the petitioner. Prima
facie we are not convinced by the claim made by the petitioner as rightly
contended by the respondent company, the invoices/bills on the face of it does
not even bear name of the party to whom it is addressed nor where the works
were executed as well as date on which the execution of work is alleged to have
been carried out. In addition, the statement of account as required to be filed
under the provisions of IBC read with the attendant Rules have also not been filed
to sustain the claim of the petitioner against the respondent company. More
particularly so when it is claimed by the petitioner that a sum of Rs.3,53,61,884/-
was the value of work executed for the respondent company and that the
respondent company had only paid a sum of Rs.2,44,62,179/- and the balance
sum is due, the question arises that is it not incumbent on the part of the petitioner
to disclose all the facts fully and truly and also the details of all the receipts from
the respondent company to be put forth before us to ascertain the veracity of the
claim made by the petitioner.
PRINCIPAL BENCH 607
7. Hence in the exercise of summary jurisdiction we are compelled to dismiss

this Petition filed under the provisions of IBC without costs.
R.VARADHARAJAN
MEMBER (JUDICIAL)
DEEPA KRISHAN
MEMBER (TECHNICAL)

PRINCIPAL BENCH
NEW DELHI
Present: CHIEF JUSTICE (Retd.) SHRI M.M.KUMAR,
HON'BLE PRESIDENT
& SHRI R.VARADHARAJAN, MEMBER (JUDICIAL)
In the matter of:
Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for
initiating Corporate Insolvency Resolution Process against the Corporate Debtor.
In the matter of:
1. M/s.DEEM ROLL-TECH LIMITED
C/3-301 ANUSHRUTI APARTMENT, OPP., NEW YORK TOWER,
NEAR JAIN MANDIR S.G.HIGHWAY, THALTEJ AHMEDABAD,
380 054.
APPLICANT COMPANY/ OPERATIONAL CREDITOR
VS.
2. M/s.R.L.STEEL & ENERGY LTD.
C-l/A, OPPOSITE ARYA SAMAJ MANDIR,
NIZAMUDDIN EAST, MATHURA ROAD,
NEW DELHI-110013
RESPONDENT/ CORPORATE DEBTOR
Counsel for the Petitioner: Shri Vinit Trehan, Advocate
Shri Kunal P Vaishnav, Advocate.
ORDER
1. The Petitioner has moved this petition before us claiming to be an Operational
Creditor as defined under the Insolvency and Bankruptcy Code, 2016 (for brevity
'IBC') of the respondent company. The transaction giving rise to filing of this
petition is stated to be one of sale of goods to the respondent company of
Spheroidal Graphite Rolls based on 3 (three) invoices as detailed below:
Invoice No. Date Amount
Invoice No. 550 11.10.2011 Rs.9,60,841/-
Invoice No. 785 21.12.2011 Rs.8,43,795/-
PRINCIPAL BENCH 609
Invoice No.885 20.01.2011 Rs.4,50,024/-

Total Rs.22,54,660
2. Out of the above said amount of Rs.22,54,660/- the Petitioner claims that a
sum of Rs.16,95,000/- had been paid by the respondent company the last of the
payment being made in March 2014 and subsequently no payment is forthcoming
of the balance amount in a sum of Rs.5,59,660/- from the respondent.
3. The Petitioner, with a view to recover the balance amount due to it of
Rs.5,59,660/- had initiated a Summary Suit under Order XXXVII of CPC in the
Court of SR.Civil Judge, Ahmedabad (Rural) A Mirzapur, Ahmedabad I in Summary
Suit No.217/2014 and that in the said suit the Learned Judge had decreed ex-
parte on 19.10.2016 the suit in favour of the Plaintiff for a sum of Rs.5,59,660 with
simple interest at the rate of 8% per annum from the date of filing of the suit till the
date of its realization as well as the costs of the suit to the Petitioner.
4. Based on the strength of the Invoices as given, Demand Notice in Form 3 of IBC
seems to have been issued on 15.02.2017 under the hand of its counsel on the
respondent by e-mail. Immediately after the expiry of 10 days as mandated
under IBC to await for notice of dispute or for due payment of the amounts claimed,
the Petitioner has filed the instant petition to let loose the Corporate Insolvency
Resolution Process on the respondent on 27.02.2017 as evident from the
endorsement made by the Registry of this Tribunal.
5. The above petition was initially moved before us on 08.03.2017 and since we
found that no proof had been adduced by the Petitioner for having effected the
service of the Notice of Demand dated 15.02.2017 on the respondent other than
through e-mail, we directed the Petitioner to serve a notice of the hearing of the
Petition fixed on 28.03.2017. Despite service the respondent company as evident
from the tracking report has not chosen to appear before us and in the
circumstances we are constrained to proceed with the hearing of the petition in
the absence of the respondent company.
6. Be that as it may on a perusal of the records available before us, particularly
taking into consideration the invoices as detailed above annexed as Annexure -
3 (colly) to the petition coupled with the Copy of the Ledger Account for the year
2011, 2012, 2013 and 2014, all annexed as part of Annexure - 4 (Colly), it is evident
that the invoices relates to the period between February 2011 to January 2012 and
the non-payment of dues is claimed to be in relation to 3 invoices as detailed
above, and the last date of payment as per the ledger account for the
period between 1.4.2013 to 31.3.2014 is that of 25.2.2014 where in a sum of
Rs.2,00,000/- is shown as received from the respondent and for the year ended
31.3.2014 the closing balance is disclosed to be in a sum of Rs.5,59,660/- as due
from the respondent company. For the year ended 31.3.2015 as well as 31.3.2016
the same amount figures as the closing balance due from the respondent as per
the ledger accounts certified by the petitioner. The same seems to be the story for
the period commencing from 1.04.2016 to 31.03.2017? as found in page number
26 of the petition. It is pertinent to note that none of the ledger accounts produced
and the closing balances stated therein have been confirmed by the respondent
company nor any other acknowledgments issued by the respondent produced
by the petitioner. In view of the above facts we do not have any hesitation in
holding that the amount claimed as a 'debt' by the petitioner, as against the
respondent giving a ground for triggering the insolvency process as contemplated
under IBC is time barred and hence the petition is liable to fail keeping in view the
provisions of IBC as delineated hereunder:-
7. 'Debt' is defined under section 3(11) of IBC to mean a liability or obligation in
respect of a claim which is due from any person and includes a financial debt
and operational debt. 'Claim' is defined under section 3(6) of IBC as follows:
(a) a right to payment, whether or not such right is reduced to judgment,
fixed, disputed, undisputed, legal, equitable, secured or unsecured;
(b) right to remedy for breach of contract under any law for the time being in
force, if such breach gives rise to a right to payment, whether or not such
right is reduced to judgment, fixed, matured, unmatured, disputed,
undisputed, secured or unsecured;
8. It is also relevant to consider the definition of 'operational debt' and 'operational
creditor' which seems to have given rise to the instant petition. Operational debt
is defined under section 5(21) of IBC to mean a claim in respect to the provision of
goods or services including employment or a debt in respect of the debt in
respect of repayment of dues arising under any law for the time being in force
and payable to the central government, state government or any local authority
and an operational creditor is defined in section 5(20) of IBC means a person to
whom an operational debt is owed and includes any person to whom such debt
has been legally assigned or transferred. As per section 60 of IBC this Tribunal
has been designated as adjudicating authority in relation to corporate persons.
Further as per clause (c) sub-Section (5) section 60, this tribunal is enjoined with
the jurisdiction to entertain or dispose off any question of priorities or any question
of law or facts, arising out of or in relation to the insolvency resolution or liquidation
proceedings of the corporate debtor or corporate person under this code. Section
255 of IBC provides that the Companies Act 2013 shall be amended in the manner
specified in the eleventh schedule to IBC and a perusal of the eleventh schedule
of IBC discloses the amendments made to the Companies Act 2013 of several
provisions though not section 433 of the Act wherein specifically the provisions of
PRINCIPAL BENCH 611
the Limitation Act 1963 (36 of 1963) is made applicable and that it shall, as far as
may be apply to the proceedings or appeals before the Tribunal or Appellate
tribunal as the case may be. Hence in the absence of any specific bar in the IBC
to the application of the Limitation Act, 1963 coupled with the provisions of Section
433 of the Act as contained in the Companies Act 2013 which makes Limitation
Act applicable to this Tribunal the debt as claimed by the petitioner is barred by
limitation and hence cannot be the basis for invoking IBC before this Tribunal.
9. In relation to the decree obtained from the civil court in relation to the amounts
claimed, we are of the considered view that the petitioner is well within its rights
to have it executed before the appropriate civil courts meant for execution and
that this Tribunal cannot be converted into an executing court of the above said ex
parte decree obtained. Further we have categorically held in matter of Annapurna
Infrastructure Pvt. Ltd. & Ors. Vs. Soril Infra Resources Ltd. in C.P.No.(IB)-22(PB)/
2017 dated 24.03.2017 that a petitioner cannot seek to avail multiple remedies in
respect of the same cause of action and thus venture into forum shopping.
10. In view of all the above the petition is dismissed with costs of Rs.25,000/-
PRESIDENT
(R.VARADHARAJAN)
MEMBER (JUDICIAL)

PRINCIPAL BENCH
NEW DELHI
C.P NO. (IB)-19(PB)/2017
CA NO.
CORAM:
Hon’ble President
SH. S.K MOHAPATRA
Hon’ble Member (T)
Pawan Dubey & Anr.
Vs
J.B. K. Developers Pvt. Ltd.
SECTION OF THE COMPANIES ACT : U/s 9 of Insolvency And Bankruptcy Code
2016
S. NAME DESIGNATION REPRESENTATION SIGNATURE
NO.
1. Pawan Dubey (Advocate)
2. Biswajeet Das (Advocate)
ORDER
1. This Petition has been filed under Section 9 of the Insolvency and Bankruptcy
Code 2016 (for brevity the 'Code') with a prayer to initiate an insolvency process
against the respondent Company, namely, K.B.K. Developers Private Limited. The
Petitioners are son and father. They booked a residential Flat No.IRIS-102 having
super area of 1295 sq ft. with construction linked plan in the Green Avenue
project. They paid a total sum of Rs.25,97,940/-. On the deposit made by the
petitioners, the respondent issued them an allotment letter on 1.11.2012 which
contains terms & conditions of the allotment and the same has been placed on
record (Annexure- B). The respondent was to hand over the possession of the
residential flat positively within a period of 30 months from the date of allotment
letter which expired on 30.4.2015.
PRINCIPAL BENCH 613
On account of the delay in raising the construction, the petitioner had sent a
number of e-mail messages and also visited the office of the respondent company
and also held a meeting on 16.7.2016. It is asserted that respondent had agreed
to cancel the allotment and refund the amount of Rs.25,97,940/- along with the
interest @ 19% p.a. for the delay period in accordance with the builder-buyer
agreement dated 01.11.2012. A copy of the minutes of the meeting dated 16.7.2016
has been placed on record (Annexure-C). Accordingly, the petitioner opted for
cancelling of the residential flat and requested the Respondent No.2 to refund the
amount with interest allegedly agreed by all the parties, a copy of the e- mail
dated 08.9.2016 has also been placed on record (Annexure-D). The respondent
company has asked for some documents to process the claim which was duly
provided by the petitioner. There are several allegations contained in Para-7 of
the brief synopsis' highlighting that on 15.9.2016, respondent sent an e-mail
dated 15.9.2016 asking the Petitioner No.1 to meet the Director to collect the
amount along with interest. Accordingly, the Petitioner No.1 sent to the office of
the respondent on 17.9.2016. According to the allegations, the respondent
company did not issue any cheque and asked for no objection certificate of
Home Loan section of the Axis Bank. However, no e-mail dated 15.9.2016 or any
evidence of the visit of Petitioner No.1 on 17.9.2016 has been placed on record.
On 20.6.2016, the respondent again wrote an e-mail after making reference to
the mail of the petitioner dated 23 & 26.9.2016 and asked the petitioner to supply
various documents. However, in the e-mail dated 14.10.2016, the respondent
has conceded with regard to the offer made for the refund of the amount in the
form of four post dated cheques on quarterly basis. The petitioner did not agree
and requested for revised amount of cheques. Eventually, the petitioner served
statutory notice under Section 433 of the Companies Act, 1956 and a notice as per
performa under the Code on 23.1.2017. Another notice under the Code was also
issued on 10.2.2017 calling upon the respondent to pay the outstanding principal
sum with interest @ 18% p.a. The notices have been duly served.
We have heard the Counsel for the petitioner Mr. Vishwajeet Dass. According to
the Ld. Counsel, the petitioner must be regarded as an operational creditor and
the respondent must be considered as an operational debtor within the meaning
of Section 9 read with Section 5 (20) and Section 5 (21), respectively. Ld. Counsel
has emphasized that an operational creditor under Section 5 (20) means a person
whom an operational debt is owed which includes a transferee or assignee. The
expression operational debt under Section 5 (21 ) would mean a claim in respect
of the provisions of goods or services including the re-payment of dues arriving
under any law for the time being in force and payable to the Central or any State
Government or local authority. According to the Ld. Counsel, the expression
operational debt must receive a liberal interpretation to include claim in respect
of the immovable property as the one involved in the present case.

The aforesaid issue is no longer res-integra. The facts of the present case are
akin to the one decided by the Principal Bench comprising of one of us (Hon'ble
President) in the case of Col. Vinod Awasthy v. A.M.R. Infrastructures Ltd.
In the aforesaid case, the Principal bench construed the provisions of Section 9
read with Section 5 (20) and (21) of the Code. It would be apposite to make
reference to the observations made in the aforesaid judgment which reads as
under:
"7. A perusal of section 9 of the code would show that In order to maintain an
application as an 'Operational Creditor' the Petitioner has to satisfy the
petition like the one in hand could be maintained only by an 'Operational
Creditor' against the 'Corporate Debtor. The aforesaid expression has been
"5. In this Part, unless the context otherwise requires, –
(20) operational creditor" means a person to whom an operational debt is
or transferred
(21) operational debt" means a claim in respect of the provision of goods or
Government, any State Government or any local authority
8. It is evident from the perusal of the aforesaid definition of 'Operational Debt'
account of employment or a debt in respect of repayment of dues arising
under any law for the time being in force and payable to Centre or State
Government or local authority. It is thus clear that debt may arise out of provision
of goods or services or dues arising out of employment or dues arising under
any law for time being in force and payable to the Centre/State Government.
The framer of the Code have also defined the expression 'Financial Debt' in
section 5(8) to mean a debt which is disbursed against the consideration of
time value of money. However the framer of the Code has not included in the
expression 'Operation Debt' as any debt other than the 'Financial Debt'. It is
thus confined to aforesaid four categories like goods, services, employment
and Government dues. In the present case the debt has not arisen out of the
provisions of goods or services. The debt has also not arisen out of employment
or the dues which are payable under the statute to the Centre/State Government
PRINCIPAL BENCH 615
or local body. The refund sought to be recovered is necessarily associated with

the delivery of the possession of immovable property which has been delayed.
9. The next question is whether the Petitioner could be regarded as an
'Operational Creditor' within the meaning of section 5(20). The Operational
Creditors' are those persons to whom the 'Corporate Debt' is owed and whose
liability from the entity comes from a transaction on operations. The final report
of the Committee in para 5.2.1 defines 'Operational Creditor' like the wholesale
vendor of spare parts whose spark plugs are kept in inventory by Car Mechanic
and who gets paid only after spark plugs are sold to acquire the status of
'Operational Creditor' so and so forth. The Petitioner in the present case has
neither supplied any goods nor has rendered any service to acquire the status
of an 'Operational Creditor'.
10. We are further of the view that given the time line in the code it is not
possible to construe section 9 read with section 5(20) & (21) of the Code so
widely to include within its scope even the cases where dues are on account
of advance made to purchase the flat or a commercial site from a construction
company like the Respondent in the present case especially when the Petitioner
has remedy available under the Consumer Protection Act and the General
Law of the land. Therefore we are not inclined to admit the petition.
11. Like wise we have decided the case of Sajive Kanwar v. AMR Infrastructure
C.P. No.(ISB)-03(PB)/2017 on 16.2.2017 which has also discussed the possibility
of treating a person like the petitioner as an "Operational Creditor ",
The above para taken from the judgment rendered in the case of Col. Vinod
Awasthy is a complete answer to the arguments raised by Mr. Dass. Accordingly,
we regret out inability to accept the submissions made by Mr. Dass on behalf of
the petitioner. Taking the same view, which has been taken by this Tribunal in its
earlier judgment, we are not inclined to admit the petition.
As a sequel to the above discussion, this petition fails and the same is dismissed.
PRESIDENT
(S.K. MOHAPATRA)
MEMBER (TECHNICAL)
Dated: 31.03.2017

PRINCIPAL BENCH
NEW DELHI
C.P NO. (IB)-30(PB)/201
CA NO.
CORAM:
PRESENT: CHIEF JUSTICE M. M. KUMAI
Hon’ble President
SH. R.VARADHARAJAI
Mukesh Kumar & anr.
Vs
AMR Infrastructures Ltd
2016
M Priyadarshi Advocate
Chaitanayshi
ORDER
The petitioners’ claim to be ‘Operational Creditor’ within the meaning of sections
8 & 9 of the Insolvency and Bankruptcy Code, 2016 (for brevity ‘the Code’) and
have prayed that insolvency process be initiated against Respondent ‘Corporate
Debtor’ as it has committed default and has not been able to pay despite the
demand made.
Facts in brief may first be noticed. The petitioners are joint holders of an allotted
apartment in the project of the Respondent Company known as ‘Adventure
Mall’. They had proposed to develop the aforesaid project at Plot No.9, Tech
Zone, Greater Noida. The Respondent had failed to pay admitted debts of
Rs.29,44,175/- which is the amount paid by the Petitioners towards the allotment
of commercial shop admeasuring 265 Sq. Ft bearing No.0-14B for a total sum of
Rs.22,52,500/-. They claim the refund advance payment made alongwith
assured returns of Rs.6,08,175/- from 16/10/2014 till date. After signing of the
MOU on 12.7.2013 the constructions is at stand still and there is no hope
whatsoever of construction being carried out as per the terms of MOU.
Accordingly the petitioners served a demand notice on 27.1.2017 under section
8 of the Code and the same has not been replied by the Respondent. On the
PRINCIPAL BENCH 617
basis that the notice has not been replied the petitioners claim that the default
has been admitted by the Respondent as there is no bona fide defence. Therefore
Insolvency process is required to be initiated.
We have heard learned counsel for the petitioner at length and are of the view
that against the respondent similar relief was claimed in the earlier two cases
namely Sajive Kanwar v. AMR Infrastructure (C.P. No.06/2017 decided on 16.2.2017)
and Col. Vinod Awasthy v. AMR Infrastructure Ltd. (C.P. No.(IB)- 10(PB)/2017 decided
on 22.2.2017). The issue raised before us is squarely covered by the aforesaid
two judgements. Therefore the question of facts and law are similar as would be
evident from the perusal of paras 7 to 11 of the judgement rendered in the case of
Col. Vinod Awasthy v. AMR Infrastructure Ltd. (surpa) which read as under:-
“7.A perusal of section 9 of the code would show that in order to maintain an
application as an ‘Operational Creditor’ the Petitioner has to satisfy the
petition like the one in hand could be maintained only by an ‘Operational
Creditor’ against the ‘Corporate Debtor. The aforesaid expression has been
“5. In this Part, unless the context otherwise requires, –
(20) “operational creditor” means a person to whom an operational debt is
or transferred
(21) “operational debt” means a claim in respect of the provision of goods or
account of employment or a debt in respect of repayment of dues arising
under any law for the time being in force and payable to Centre or State
Government or local authority. It is thus clear that debt may arise out of provision
of goods or services or dues arising out of employment or dues arising under
any law for time being in force and payable to the Centre/State Government.
The framer of the Code have also defined the expression ‘Financial Debt’ in
section 5(8) to mean a debt which is disbursed against the consideration of
time value of money. However the framer of the Code has not included in the
expression ‘Operation Debt’ as any debt other than the ‘Financial Debt’. It is
thus confined to aforesaid four categories like goods, services, employment
and Government dues. In the present case the debt has not arisen out of the
provisions of goods or services. The debt has also not arisen out of employment
or the dues which are payable under the statute to the Centre/State Government
or local body. The refund sought to be recovered is necessarily associated with
the delivery of the possession of immovable property which has been delayed.
9. The next question is whether the Petitioner could be regarded as an
‘Operational Creditor’ within the meaning of section 5(20). The ‘Operational
Creditors’ are those persons to whom the ‘Corporate Debt’ is owed and whose
liability from the entity comes from a transaction on operations. The final report
of the Committee in para 5.2.1 defines ‘Operational Creditor’ like the wholesale
vendor of spare parts whose spark plugs are kept in inventory by Car Mechanic
and who gets paid only after spark plugs are sold to acquire the status of
‘Operational Creditor’ so and so forth. The Petitioner in the present case has
neither supplied any goods nor has rendered any service to acquire the status
of an ‘Operational Creditor’.
10. We are further of the view that given the time line in the code it is not
oossible to construe section 9 read with section 5(20) & (21) of the Code so
widely to include within its scope even the cases where dues are on account
of advance made to purchase the flat or a commercial site from a construction
company like the Respondent in the present case especially when the Petitioner
has remedy available under the Consumer Protection Act and the General
Law of the land. Therefore we are not inclined to admit the petition.
of treating a person like the petitioner as an “Operational Creditor”. In para 6 to
10 we have expressed the following view:-
“6. From a bare perusal of Section 9 (1) of IBC (Supra) it becomes evident that a
cause of action to an 'Operational Creditor’ to file an application before NCLT
would arise if after 10 days notice given by him to the 'Operational Debtor’, the
'Operational Creditor’ does not receive any payment from such a debtor or a
corporate debtor or in the alternative he does not receive a notice of dispute.
He must also satisfy the Tribunal about demand notice issued to the Operational
Debtor/Corporate Debtor and is also requires to fulfill all other requirements of
Section 9(3) of IBC.
7. In order to fall within the four corners of Operational Creditor” as per Section
9 of the IBC it must be shown that he is a person to whom an 'Operational Debt’
is owned or it is legally assigned/transferred as is patent from a bare perusal
of Section 5 (20) of IBC. The expression 'Operational Debt’ has been defined by
Section 5 (21) of IBC and it must fulfill following substantive elements namely:
(a) Debt arising out of provisions of goods; or
(b) services; or
PRINCIPAL BENCH 619
(c) out of employment.

It also covers dues arising under any law for the time being in force and
payable to the Central or State Government or local authority. It is doubtful
whether it would include all debts other than 'Financial Debt’ because we do
not find any such ‘Legislative intendment’ from the Part II of IBC which deals
with 'Insolvency and Liquidation for Corporate Persons’
8. Learned counsel for the petitioner has argued that the expression 'Corporate
Debtor’ means a person who owes a debt to any person as per Section 3(5) of
IBC. It is further emphasized that the expression 'Debt’ means a liability or
financial debt and operational debt. However Part II specifically deals with
“Insolvency resolution and Liquidation’ and it has its own definition enumerated
in Section 5 of IBC as is discussed in the preceding para. Therefore the definition
as enumerated in section 5 of IBC are to apply the expressions used in sections
7 and 9 of IBC and therefore, the expression used in section 3 of IBC cannot be
exclusively read to interpret various words used in section 5 of IBC. Therefore
we find no merit in the aforesaid submission.
9. Therefore the argument of the petitioner to treat this petition as the one under
section 9 of IBC is also without substance and we reject the same.
10. For the reasons stated above this petition fails and the same is dismissed.
Keeping in view the tenderness of the provisions of IBC we refrain from burdening
the petitioner with cost. Before parting we make it clear that any observations
made in this order shall not be construed as an expression of opinion on the
merit of the controversy as we have refrained from entertaining the application
at the initial stage itself when the Respondents have not entered appearance
and are not present before us. Therefore the right of the Applicants before any
other forum shall not be prejudiced on account of dismissal of instant
application."
A perusal of the aforesaid paras would make it evident that the petitioners cannot
be treated as ‘Operational Creditor’ within the meaning of section 9 as the debt
incurred by the respondents has not arisen out of provisions of goods, services or
emoloyment. It can also not be considered ‘Financial Debt’ within the meaning of
section 5(8) to mean a debt which is disbursed against the consideration of the
time value or money.
As a sequel to the above discussion this petition fails and the same is dismissed.
(Chief JUSTICE M.M. KUMAR)
PRESIDENT
(R. VARADHARAJAN)
Dated: 31.03.2017 MEMBER (J)

PRINCIPAL BENCH
NEW DELHI
C.P NO.(IB)-36(PB)/2017
CA NO.
CORAM:
Hon’ble President
SH. R.VARADHARAJAI
Shri Rajesh Saini
Vs
DSC Ltd.
SECTION OF THE COMPANIES ACT: U/s 9 of Insolvency and Bankruptcy Code 2016
Shyam Babu Advocate Petitioner
Kunal Madan Advocate Petitioner
ORDER
This petition filed u/s 9 of the Insolvency & Bankruptcy Code, 2016 (for brevity ‘the
Code’) was treated as incomplete and additional papers could be filed only on
24.3.2017. Accordingly this has been placed before us for hearing today.
2. The prayer made by the Petitioner is to trigger insolvency process under
section 9 of the Code against the Respondent Company as it has failed to pay
arrears of wages of the Petitioner amounting to Rs.15.88 lacs. In order to claim the
aforesaid amount the demand notice in respect of unpaid ‘Operational Debt’
from the Respondent Company issued on 24.1.2017 (A-1). In reply to the notice
the Respondent took the stand that the contents of the notice were wholly false
and mischievous. In reply the filed its counsel the following facts were revealed:-
“(a) Your client was appointed as Chief Information Officer in Vice President
(M- 2) Grade vide letter dated 09.07.2010 at a monthly remuneration of
Rs.3,33,400/-. A copy of the letter dated 09.07.2010 appointing him as Chief
PRINCIPAL BENCH 621
Information Officer is annexed herewith as Annexure-I. He worked in this

position till 16.10.2012. All his dues for this period were paid to him and nothing
remained payable for the service rendered by him up to 16.10.2012.
(b) On 17.10.2012, he was engaged as Sr. Consultant (IT) on contract basis on
a lump sum monthly consultancy fee of Rs.1,66,700/-. The engagement was
for a period of 6 months (i.e. from 17.10.2012 to 16.4.2013) A copy of the letter
dated 17.10.2012 engaging him as Sr. Consultant (IT) is annexed herewith an
Annexure-2.
(c) On 17.04.2013, his contractual engagement as Sr. Consultant was extended
from 17.04.2013 to 16.10.2013 on the same terms and conditions. A copy of the
letter dated 17.04.2013 extending the period of contractual engagement upto
16.10.2013 is annexed as annexure-3.
(d) Even though his contractual engagement as Sr. Consultant was extended
up to 16.10.2013, your client had stopped coming to office from 01.09.2013,
presumably because he had found some regular job. Therefore, there is no
question of any payment having become due to your client for the period
commencing from 01.09.2013. In view of this, there is no question of any payment
becoming due to your client for the months of September 2013 to April 2014 as
alleged in your notice.
(e) As regards letters/email dated 04.11.2013 and 21.12.2013, we deny having
sent any such extension letters/ emails and your client is put to strict proof in
respect of the same.
(f) Presuming, though not admitting, that your client continued to attend office
till 16.10.2013 (i.e. the date up to which the contractual engagement as Sr.
Consultant was extended), there was no question of your client coming to the
company for work during the period from 17.10.2013 to 16.04.2014 as alleged.
It is pointed out that since the contract was not extended beyond 16.10.2013,
your client ceased to have any relationship with our company after 16.10.2013.
Incidentally, it is mentioned/clarified that in contractual engagements of this
nature, the period of engagement automatically comes to an end on the date
of contract expires and no formal resignation is required to be submitted by the
concerned person engaged on contractual basis. In view of this, your client
sending an e-mail dated 09.04.2014 intimating our any about his resignation
w.e.f. 28.04.2014 was nothing less than a or clever attempt on the part of your
client to falsely show/prove that he continued to work during the period from
17.10.2013 to April, 2014.”
3. A perusal of the aforesaid paras of the reply would clearly shows that
appointment of the Petitioner as Chief Information Officer came to an end on
16.10.2012. He was engaged as a Senior Consultant (IT) on contract basis thereafter

on a lump sum monthly consultancy fee of Rs.1,66,700/- for a period of six
months commencing from 17.10.2012 to 16.4.2013 (A-2). It was later extended to
16.10.2013 (A-3). However, the Petitioner stopped attending office from 01.09.2013,
presumably for the reason that he had found some regular job. It is in the aforesaid
facts and circumstances that Respondent has seriously disputed any liability to
pay the arrears of wages from September 2013 to April 2014 as alleged in the
notice. The Respondent has vehemently controverted the letter and emails dated
04.11.2013 and 21.12.2013. Therefore the relationship with the Respondent
Company came to an end on 01.09.2013. The issue concerning the period of
limitation has also been raised.
4. We have heard learned counsel for the petitioner at length and are of the view
that there is serious dispute raised by the Respondent with regard to the liability
to pay from 01.09.2013 to April 2014. It would not thus be safe to brand the
respondent as a ‘defaulter’ The Petitioner has not filed any rejoinder to controvert
the aforesaid stand taken by the Respondent. The emails claiming to have
extended the period of employment cannot per se be accepted in the face of
regular extension letter issued on 17.04.2013 till 16.10.2013. Therefore we have
not been able to persuade ourselves to trigger insolvency process as there is a
serious dispute.
5. As a sequel to the above discussion this petition fails and the same is dismissed.
However the dismissal of the petition shall not be construed as a bar for the
petitioner to avail any other remedy in accordance with law including that of filing
of a civil suit.
PRESIDENT
(R.VARADHARAJAN)
MEMBER (JUDICIAL)
PRINCIPAL BENCH 623

PRINCIPAL BENCH
NEW DELHI
C.P NO.(IB)-22(PB)/2017
CA NO.
CORAM:
Hon’ble President
SH. R.VARADHARAJAN
NAME OF THE COMPANY:
Annapurna Infrastructure Pvt. Ltd. & Ors.
Vs
Soril Infra Resources Ltd.
SECTION OF THE COMPANIES ACT : U/s 7 of Insolvency and Bankruptcy Code,
2016
S.No. Name Designation Representation Signature
1. Mr. Chentan Sharma Sr. Advocate Respondent
2. Mr. Abhishek Swaroop Advocate Respondent
3. Mr. Abhishek Shivpuri Advocate Respondent
4. Mr. Vijary Nair Advocate Operational Creditor
5. Mr. Prashant Jain Advocate Operational Creditor
6. Mr. Sanyogita Jain Advocate Operational Creditor
7. Mr. Aparna Malhotra Advocate Operational Creditor
8. Mr. R P Gupta In-person Operational Creditor
ORDER
M/s Annapurna Infrastructure Pvt. Ltd. & Ors - applicants (for brevity ‘the applicants)
have invoked the provision of Section 9 of Insolvency and Bankruptcy Code 2016
(for brevity ‘the Code’) with a prayer to trigger Insolvency Process against M/s
SORIL Infra Resources Limited - Respondent (for brevity ‘the respondent). The
applicants have made the following prayers:

1. To admit the application and pass an order for initiating the Corporate
Insolvency Resolution Process under section 9 of the Insolvency and
Bankruptcy Code 2016;
2. To appoint an interim resolution professional in terms of section 16 of the
Code;
3. To cause a Public announcement of the initiation of Corporate Insolvency
Resolution Process and calling for submission of claims under section 15
of the Code; and
4. To declare a moratorium in terms of section 14 of the Code.
2. In order to put the controversy in its proper perspective it would first be necessary
to notice few material facts. The applicants have some claims against the
Respondent and in pursuance of the order passed by Hon’ble High Court of Delhi
Justice (Dr.) Mukundakam Sharma (Retd.) was appointed as Sole Arbitrator to
adjudicate all disputes arising out of the lease deed dated 23.11.2005 between
the applicants and respondents. It is pertinent to mention that respondent have
changed their name and is now known as M/s SORIL Infra Resources Limited-
Respondent. The applicants claimed that applicants are ‘Operational Creditor’
and the Respondent is a ‘Corporate Debtor’ within the meaning of code.
3. The arbitrator passed an award on 9.9.2016 in favour of the applicants granting
the following reliefs:-
a. Rs. 2,67,52,283/- on account of rend from 1.4.2008 upto 22.3.2010 along
with interest @ 12 % per annum w.e.f. 23.3.2010 upto the date of the
Award.
b. Rs. 1,11,56,145/- on account of damages equivalent to rend for a period of
6 months from 22.3.2010.
c. Future interest @ 12% per annum on the amounts, as calculated above,
from the date of the award till the date of realization.
4. The Respondent then challenged the award u/s 34 of the Arbitration and
Conciliation Act, 1996 (for brevity the ‘Arbitration Act’) with a prayer to set aside
the award. However the application was dismissed on 19.12.2016. As a
consequence each of the applicants issued Demand Notice on 13.1.2017 under
section 8 of the Code. In response to the Demand Notice Respondent filed reply
on 27.1.2017. It is conceded by the applicants that in the reply sent by Respondent
the existence of ‘Operational Debt’ has been disputed and it also stated that an
appeal being numbered as FAO(OS)(COMM) 20 of 2017 has been filed under
PRINCIPAL BENCH 625
section 37 of the Arbitration Act against the order dated 19.12.2016 passed by
learned Single Judge while dismissing the appeal under section 34 of the
Arbitration Act. It has also been pointed out that execution proceedings to recover
the amount due under the award dated 9.9.2016 have also been initiated and are
pending consideration before Hon’ble Delhi High Court. It is thus evident that the
dispute has arisen on account of payment of rent and interest/damages on the
rental amount.
5. Mr. Vijay Nair learned counsel for the Petitioner has vehemently argued that
the applicant has to be regarded as a ‘Operational Creditor’ within the meaning
of section 9 read with section 5(20) and 5(21) of the Code. A reference has also
been invited to the definition of words the ‘debt’ and ‘default’ as defined in section
3(11) and section 3(12) of the Code. It has been submitted that the Demand Notice
dated 13.1.2017 was served on 16.1.2017. According to the learned counsel on
the date of service of Demand Notice the award of the Arbitrator had attained
finality as the application u/s 34 of the Arbitration Act was dismissed on 19.12.2016
and no appeal u/s 37 was filed or pending. According to the learned counsel
filing of appeal subsequent on 20.1.2017 would be immaterial.
6. In order to buttress his stand that applicant is an ‘Operational Creditor’ learned
counsel has placed reliance on a portion of para 3.2.2 of the report of the
Bankruptcy Law Reforms Committee Volume I: Rationale and Design and has
argued that the report clearly brings out that the obligation to pay rent is certainly
cover by the definition of expression ‘Operational Creditors’. According to the
learned counsel the expression ‘Operational Creditor’ used in section 5(20) and
5(21) of the Code must be construed to include the obligation to pay rent to the
applicant as an ‘Operational Creditor’. According to the learned counsel the
definition of ‘Operational Creditor’ as adopted in section 5(20) of the Code is not
exhaustive but it is illustrative as it is evident from the use of word ‘include’. Mr.
Nair has submitted that it is well settled principle of law that wherever the
expression ‘include’ is used to define an expression then it has room to imply
many other things as the definition is not exclusive.
7. Mr. Nair has then submitted that application u/s 34 of the Arbitration Act cannot
be regarded as continuation of arbitration proceeding because the arbitrator is
the final judge of the facts and the High Court while hearing objections u/s 34 is
not expected to scrutinize the award as an appellate forum. In support of his
submissions learned counsel has placed reliance on para 30 of a judgment of
Hon’ble High Court of Delhi in the case of M/s Raj Kishan & Company v. National
Thermal Power Corporation 2012VIIIAD (Delhi) 53. It has been pointed out that in
some-what similar circumstances a Division Bench of Hon’ble High Court of
Madras in the case of N. Poongodi and Anr. v. Tata Finance Limited 2005(4) CTC
577 has rejected the objections to the issuance of the insolvency notice and
rejected the objections as is evident from the perusal of para 7 of judgement.
8. Another submission made by Mr. Nair is that expression ‘arbitration
proceedings’ used in section 8(2)(a) of the ‘Code’ cannot be deemed to be pending
because under section 21 the Arbitration Act arbitration proceedings commence,
on the date on which a request for referring such a dispute to arbitration is
received by the respondent. The ‘arbitration proceedings’ and it comes to an end
in terms of section 32 on the date of announcing the final award or by an order of
the arbitral Tribunal in accordance with sub section (2) of section 32 of the Arbitration
Act. According to the learned counsel there are no arbitral proceeding pending in
accordance with the provision of section 32 which have come to an end on
9.9.2016. The proceeding could be considered pending between the period
contemplated by section 21 and section 32 of the Arbitration Act. In support of his
submission learned counsel has placed reliance on the observations made in
para 10 of the judgement rendered by Hon’ble High Court of Bombay in the case
of Rendezvous sports World v. Board of Control for Cricket in India 2016 SCC
Online Bom 6064 and argued that the term “arbitral proceedings” would not
include post-award proceedings i.e. proceedings for enforcement of the arbitral
award or proceedings to challenge the arbitral award, which arise only after the
award is made. Therefore the pendency of appeal u/s 37 of the Arbitration Act
and the execution proceeding in any case would not constitute a Bar in triggering
the insolvency process in accordance with the provision of section 9 of the Code.
9. Mr. Nair has also submitted that there is well known yardstick applicable to
test and ascertain whether renting of property would be regarded as service or
not. According to the learned counsel renting a property for commercial purpose
is certainly a service and has value for the service receiver. In that regard reliance
has been placed on para 22 of the Division Bench judgment rendered by the
Punjab & Haryana High Court in the case of M/s Shubh Timb Steels Limited v.
Union of India and Another 2011(1) ILR (Punjab & Haryana) 1008 Learned counsel
has also placed reliance on the observations made by Division Bench of Gujarat
High Court in the case of Cinemax India Limited v. Union of India 2011 SCC
online Guj 4584.
10. Mr. Nair further argued that pendency of appeal without any interim order
would not constitute a bar for initiation of execution of the award because the
main purpose of the Arbitration Act has been to provide a speedy remedy. In that
regard learned counsel has placed reliance on the observations made in para 7
of the Division Bench judgment rendered by the Hon’ble High Court of Delhi in the
case of Decor India Pvt. Ltd. v. National Building Consti. Corpon Ltd. 2007 (97)
DRJ 428 (DB).
PRINCIPAL BENCH 627
11. Mr. Chetan Sharma leaned counsel for the Respondent has made few
preliminary submissions. According to him instant petition u/s 9 of the Code per
se is not maintainable because the Respondent does not owe any ‘Operational
Debt’ to the applicant. The applicant is not an ‘operational creditor’. Operational
debt is clearly defined in section 5(21) of the Code. According to Mr. Sharma Ipso-
facto an Operational Debt arises only in respect of the claim of ‘goods’ and
‘services’. The expression goods and service include ‘employment’
12. Mr. Sharma maintains that it is clear from the bare reading of the statute, the
applicant ipso-facto and ipso-jure does not and cannot qualify to be by any
stretch of imagination an Operational creditor by any stretch of imagination as
there is no operational Debt. Learned counsel has maintained that the ‘debt’ is
not arising under any law for the time being in force, as is the mandate of sub
section 21 section 5 of the Code and it would be attracted only when the said debt
is payable to (i) Central Government; (ii) State Government; and (iii) Local Authority.
13. According to the learned counsel sections 8, 9, 5(2), 5(21) must be construe in
accordance to the object of the Code as outlined in the long title. Learned counsel
has maintained that any external aid for construction of the provisions in the
Code like the Committee report must be avoided because it was after the report
that the Parliament has passed the code. The Code as it stands must be construed
strictly. In support of his submissions learned counsel has invited out attention to
para 9 & 10 of the judgement rendered in the case of Workmen of Dimakuchi
Tea Estate v. Management of Dimakuchi Tea Estate AIR 1958 SC 353.
14. Mr. Sharma has placed reliance on the judgement delivered by us in Sajive
Kunwar v. AMR infrastructure (IB-06(PB) 2017 decided on 16.2.2017) where it has
been held that a person who claims to be ‘Operational Creditor’ must show that
he is covered by section 5(20) of the Code which defines the expression
‘Operational Creditor’. Such person is also required to satisfy the requirement of
section 5(21) by showing that his claim is in respect of provision of goods or
services including employment or debt in respect of repayment of dues arising
under any law payable to the Centre/State Government to acquire locus standi
and to file a petition u/s 9 of the Code. According to the learned counsel this
judgment is in terms against the applicant and the application is liable to be
dismissed on that score alone.
15. Mr. Sharma then submitted that on 27.1.2017 the Respondent served a notice
under section 8(2) of the Code clearly pointing out that there is no default in terms
of section 8(1) of the Code and has raised the dispute with regard to any such
claim. Once there is a dispute raised then the Insolvency Process cannot be
triggered in the face of section 8(2). Learned counsel has also pointed out that no
affidavit in pursuance of section 9(3)(b) has been filed and no notice has been
given by the ‘Corporate Debtor’ relating to a dispute of unpaid ‘Operational Debt’.

It has been maintained that such an affidavit could not have been filed in view of
notice sent u/s 8(2) dated 27.1.2017 disclosing the detail of pendency of appeal
filed u/s 37 which came up for hearing on 30.1.2017. Therefore the application is
liable to be rejected.
16. Mr. Sharma has also submitted that there is deliberate suppression of material
facts as notice dated 27.01.2017 disputing the demand raised by the applicant
has not been disclosed and no disclosure has been made with regard to execution
of the proceeding as per the prescribed performa (form V). Therefore on that
score also the petition is liable to be dismissed. It has also been pointed out that
sections 75 and 76 of the Code would also be attracted on account of non -
disclosure. A reference has also been made to the order dated 30.1.2017 passed
by Division Bench of Hon’ble High Court of Delhi in which appeal preferred by the
Respondent under section 37 of the Arbitration Act. It has further been pointed out
that the execution proceedings for enforcement of award dated 9.9.2016 have
also been filed which are listed on 23.5.2017.
17. Mr. Sharma has pointed out that the initiation of Insolvency process has serious
consequences and if person like the petitioner has already availed a remedy of
execution then the draconian Insolvency Process should not be triggered which
may bring a profit making corporate entity to a complete halt. According to the
learned counsel it would result in delirious effect and a profit making corporate
entity may suffer in its reputation and irreparable loss.
18. It has further been pointed out that arbitration proceeding do not in terms
come to an end on the announcement of award which is to pass through the
process of challenge u/s 34 and then u/s 37 of the Arbitration Act as well as
subject to any further proceedings before Hon’ble the Supreme Court. In support
of his submissions learned counsel has placed reliance on the observations
made in para 10 by a Division of Bombay High Court in the case of DSL Enterprises
Pvt. Ltd. v. Mrs. N.C. Chandratre Income tax Officer, TDS-I, Nasik & Ors.
(manu/MH/0187/2013) and has argued that award would attained finality only
after remedies available to a party are exhausted u/s 34 & 37 of the Arbitration
Act or even in further appeal to Hon’ble the Supreme Court. For the same
proposition reliance has also been placed on an another judgement of Bombay
High Court rendered in the case of Rajendra N. Mehtra and Ors. v. Prabhudas
Liladhar P. Ltd. 2013(1) Mh.L.J. 532.
19. Mr. Nair for the applicant in rebuttal has argued that there is no concealment
and the factum of dispute as raised by the Respondent in its reply, has been duly
disclosed in para 4 of the brief synopsis. Learned counsel has further pointed out
that the factum of filing appeal u/s 37 of the Arbitration Act has also been disclosed
PRINCIPAL BENCH 629
in the list of dates and events and that there is no further obligation on the part of
the applicant to disclose any other fact.
20. Having heard the learned counsel for the parties and perusing the paper
book with their able assistance we proceed to take up the issues raised before
us. It is a classical case where dispute between the parties has already been
subjected to arbitration proceedings which are yet to attain finality. The expression
‘dispute’ has been defined in section 5(b) of the Code and it must be read with
section 8(1) & (2) thereof. It would thus be profitable to read the above mentioned
provisions which are as under :
Definition
5. In this Part, unless the context otherwise requires, –
(6) “dispute” includes a suit or arbitration proceedings relating to –
Insolvency resolution by operational creditor.
8. (1) An operational creditor may, on the occurrence of a default, deliver a
notice of the operational creditor –
relation to such dispute;
(b) the repayment of unpaid operational debt –
(i) by sending an attested copy of the record of electronic transfer of
the unpaid amount from the bank account of the corporate debtor;
or
(ii) by sending an attested copy of record that the operational creditor
has encashed a cheque issued by the corporate debtor.
Explanation. – For the purposes of this section, a “demand notice” means a
notice served by an operational creditor to the corporate debtor demanding
repayment of the operational debt in respect of which the default has occurred.
21. A co-joint perusal of the aforesaid provisions makes it clear that a corporate
debtor has option available under section 8(2) of the Code. The corporate debtor
could either place on record material disclosing the existence of a dispute or to
pay the unpaid debt. According to section 5(b) of the Code the expression dispute
includes a suit or arbitration proceedings relating to (a) the existence of the amount
due; (b) the quality of goods or service or (c) the breach of representation or
warranty. The definition of the word ‘dispute’ is not exhaustive but is, in fact
illustrative. In other words a ‘corporate debtor’ is not left with the only option of
showing the existence of dispute by way of a pending suit, arbitration or to show
the breach of representation or warranty. The corporate debtor would be well
within his right to show that ‘goods’ and services were not supplied at all or the
supply was far from satisfactory in case of demand raised by an ‘operational
creditor’. Hence a corporate debtor would be well within his rights to reject the
demand on any sustainable grounds. It would therefore, depend on the facts and
circumstances of each case.
22. In the instant case an arbitral award has been announced on 9.9.2016 and
the application for setting aside the award filed under section 34 of the Arbitration
Act has been rejected on 19.12.2016. It has been mentioned by the respondent in
its reply dated 27.01.2017 sent under section 8(2) of the Code to the notice issued
under section 8(1) of the Code by the applicant that the debt is disputed and
appeal under section 37 of the Arbitration Act is pending. The reply dated 27.1.2017
reads as under:-
“1. At the outset, kindly note that our client is disputing the existence of the
‘operational debt’ allegedly payable to you by our client. Our client is
vigorously contesting the Award dated 9.9.2016 (Award) passed by Mr.
Justice Mukundakam Sharma (Retd.), Sole Arbitrator, in Arbitration Case
No.3 of 2013, before the Hon’ble Delhi High Court.
2. As you are aware, our client had filed a petition under section 34 of the
Arbitration and Conciliation Act, 1996 (Act) bearing No. OMP (Comm.)
No.570 of 2016, before the Hon’ble Delhi High Court vide order dated
19.12.2016. Please note that our client has filed an appeal against the said
order under section 37 of the Act, bearing No.FAO(OS)(COMM) 20 of 2017,
for setting aside the order dated 19.12.206, and the same is presently
pending adjudication before the Hon’ble Court.
3. In view of the above, please note that no default has occurred in terms of
section 8(1) of the Code and, therefore, no process for Corporate Insolvency
Resolution can be initiated at this stage. Any action in this regard would
be at your won cost, risk and consequences.
PRINCIPAL BENCH 631
Kindly note that this reply is without prejudice to any other rights or remedies
available to our client under contract and in law.”
23. A close examination of the aforesaid reply would show that the respondents
have disputed the existence of ‘Operational Debt’ by disclosing that its application
under section 34 of the Arbitration Act was dismissed and the appeal under
section 37 of the Arbitration Act bearing No. FAO(OS)(COMM) 20 of 2017 was
pending adjudication. It is also pertinent to mention that the applicant has filed a
caveat for issuance of notice to it before passing any order. Therefore the applicants
are contesting the litigation tooth nail before this forum. In this backdrop
respondent has claimed no default within the meaning section 8(1) read with
section 3(12) of the Code is deemed to have occurred. It is also pertinent to notice
that execution proceedings for enforcement of the award have also been initiated
and are pending for consideration of the Hon’ble Delhi High Court on 12.5.2017.
24. In the face of the aforesaid facts we find that there is complete answer to the
claim made by the applicant in terms of section 8(2)(a) read with section 9(1) of the
‘Code’ which bars initiation of insolvency process. It cannot be said that arbitration
proceedings have come to an end merely on the dismissal of application under
section 34 of the Arbitration Act as sought to be canvassed on behalf of the
applicant. The proceedings are yet to attain finality as appeal under section 37 of
the Arbitration Act is pending. On behalf of the respondents reliance has rightly
been placed on the judgement of the Bombay High Court rendered in the cases
of DSL Enterprises Private Ltd. (DB) and Rajendra (SB) (Supra)
25. We have not been able to persuade ourselves to accept the submission
advanced on behalf of the applicant that ‘arbitration proceedings’ stand concluded
by virtue of section 32 of the Arbitration Act. The argument is wholly unsustainable
once we take into account the provisions of section 33 of the Arbitration Act itself.
It provides for corrections and interpretation of award and even for additional
award after the award has been announced. As already observed section 34
and section 37 of the Arbitration Act provide for setting aside of the award and the
remedy of appeal. The appeal under section 37 of the Arbitration Act is still
pending. The judgements of Bombay High Court has been rightly relied upon by
the learned counsel for respondents.
26. The other judgment that no proceedings were pending on the date of issuance
of demand notice in terms of section 8(1) of the Code is equally falicious. Admittedly
appeal under section 37 of the Arbitration Act could be preferred within 30 days
against an order passed under section 34 of the Arbitration Act. Merely because
no appeal was pending on 16.1.2017 when the respondent have time to prefer
the appeal would not entitle the applicant to invoke section 9 of the Code. If that
view is taken then extreme technicality would result in nullifying the remedy of
appeal within 30 days provided by section 37 of the Arbitration Act. No reasonable

person would take such a view. Thus the argument is wholly devoid of merit and
therefore we have no hesitation to reject the same.
27. We are further of the view that already proceedings for execution of the
award have been initiated. An effective remedy has been availed by the applicant.
We have not been able to accept that a party can invoke more than one remedy
simultaneously. It is in fact against the fundamental principles of judicial
administration to allow a party to avail more than one remedies. Ordinarily only
one remedy at one time could be availed as is evident from the fundamental
principles laid down in section 10 CPC. It would promote forum shopping which
is wholly impermissible in law. For the aforesaid view we draw support from the
observations in paras 22,23 & 24 of the judgment of the Supreme Court rendered
in the case of Dr. Aloys Wobben and Another v. Yogesh Mehta & Ors. (2014) 15
SCC 360. Accepting the aforesaid contention their lordships of the Supreme Court
observed as under:-
“22. We do not have the slightest hesitation in accepting the above contention
(fifth in the series of contentions), that even though more than one remedies
are available to the respondents in Section 64 of the Patents Act, the word “or”
used therein separating the different remedies provided therein, would disentitle
them, to avail of both the remedies, for the same purpose, simultaneously. On
principle also, this would be the correct legal position.
23. Keeping in view the submissions advanced at the hands of the learned
counsel for the appellants (as have been noticed in the foregoing paragraphs),
the question which arises for determination is, that having chosen both the
above remedies, which one of the two, should the respondents, be permitted
to pursue. The answer to the above query, will, if possible, have to be determined
from the provisions of the Patents Act itself. In this behalf we may at the outset
record, that learned counsel for the rival parties, did not invite our attention to
any provision from the Patents Act, which would provide a clear pointer, to the
course to be adopted. Whilst it was undoubtedly submitted, on the one hand,
that the choice should fall in favour of the superior forum. Details about the
locus, in respect of other challenges have been narrated in paragraph 16
hereinabove. We may in the passing record, that the determination of the
“counter-claim” would be with the superior forum, i.e., the jurisdictional High
Court (Sections 64(1) and 104 of the Patents Act). The above submission was
sought to be countered, on the other hand, by pointing out, that the opportunities
provided by the legislature to assail the order(s) passed under the Patents Act,
could not be reduced. In this behalf, it was submitted, that the remedies provided
by the legislature, where a “revocation petition” is filed, were far in excess of
PRINCIPAL BENCH 633
the remedies, in case revocation was sought through a “counter-claim”. The

legitimate inference derived from the former submission, was thus equally
legitimately, repudiated by the latter contention. Since no legitimate solution
could emerge from the provisions of the Patents Act, it would be essential, to
rely 26 on known principles of law, to resolve the issue. We shall therefore
attempt to resolve the issue, on accepted principles of law.
24. A “counter-claim” for all intents and purposes, must be understood as a
suit, filed by one who is impleaded as a defendant. A “counter-claim” is
essentially filed to obstruct the claim raised in a suit. A “counter-claim” is tried
jointly, with the suit filed by the plaintiff, and has the same effect as a cross-suit.
Therefore, for all intents and purposes a “counter-claim” is treated as a plaint,
and is governed by the rules applicable to plaints. The court trying a suit, as
well as, the “counter-claim”, has to pronounce its judgment on the prayer(s)
made in the suit, and also, those made in the “counter-claim”. Since a “counter-
claim” is of the nature of an independent suit, a “counter-claim” cannot be
allowed to proceed, where the defendant has already instituted a suit against
the plaintiff, on the same cause of action. The above conclusion is drawn on
the basis of the accepted principle of law crystallized in Section 10 of the Code
of Civil Procedure, 1908 (hereinafter referred to as, the CPC) read with Section
151 of the CPC. Both the above provisions are being extracted here under:-
“10. Stay of suit.- No Court shall proceed with the trial of any suit in which the
matter in issue is also directly and substantially in issue in a previously instituted
suit between the same parties, or between parties under whom they or any of
them claim litigating under the same title where such suit is pending in the
same or any other Court in India having jurisdiction to grant the relief claimed,
or in any Court beyond the limits of India established or continued by the
Central Government and having like jurisdiction, or before the Supreme Court.
Explanation- The pendency of a suit in a foreign Court does not preclude the
Courts in India from trying a suit founded on the same cause of action. 27.
151. Saving of inherent powers of Court.- Nothing in this Code shall be deemed
to limit or otherwise affect the inherent power of the Court to make such orders
as may be necessary for the ends of justice or to prevent abuse of the process
of the Court.”
Therefore, where an issue is already pending adjudication between the same
parties, in a Court having jurisdiction to adjudicate upon the same, a
subsequently instituted suit on the same issue between the same parties,
cannot be allowed to proceed. A similar question arises for consideration
before this Court, in the present controversy. If the respondents in their capacity
as “any person interested”, had filed a “revocation petition” before the institution
of an “infringement suit”, they cannot be permitted to file a “counter-claim” on
the same cause of action. The natural conclusion in the above situation would
be, the validity of the grant of the patent would have to be determined in the
“revocation petition”. Therefore, in the above situation, while the “revocation
petition” will have to be permitted to be pursued, the “counter-claim” cannot be
permitted to be continued. Therefore, in the above eventuality, it is apparent
that the situation would be resolved, in the same manner, as it would have
been resolved in cross-suits filed by the rival parties, before different
jurisdictional courts. In our considered view, the above conclusion is imperative
for a harmonious interpretation of the relevant provisions of the Patents Act. ”
28. In view of the above we do not feel the necessity of expressing our views on
the other issues which are left open. Accordingly we hold that application does
not warrant admission and the same is dismissed with cost of Rs.1,00,000/- (Rs.
One Lac).
PRESIDENT
(R. VARADHARAJAN)
MEMBER (J)
Dated: 24.03.2017
PRINCIPAL BENCH 635

PRINCIPAL BENCH
NEW DELHI
Present: CHIEF JUSTICE (Retd.) SHRI M.M.KUMAR, HON'BLE
PRESIDENT
In the matter of:
In the matter of:
1. Mr. Ishwar Khandelwal
Proprietor of Shri. Balaji International,
241,1st Floor, Loha Mandi
B. S Road, Ghaziabad, Uttar Pradesh
2. Amrapali Infrastructure Private Limited
Company registered under the Companies Act, 1956 Having Registered
Office at: 307, Nipun Towers, Community Centre Karkardooma, New
Delhi-110092
C1N: U4500DL2007PTC171979
Corporate Debtor
Counsel for the Petitioners: (i) Shri Dushyant K. Mahant, Advocate
(ii) Shri Ankur Mittal, Advocate
Counsel for the Respondent: NONE
ORDER
The above petition has been filed by the petitioner seeking to set in motion the
Corporate Insolvency Resolution Process (IRP) as contemplated under Section 9
of the Insolvency and Bankruptcy Code, 2016 (Code) in relation to Amrapali
Infrastructure Private Limited (for brevity hereinafter referred to as the Company')
however described in the petition as 'Corporate Debtor'. The petitioner describes
himself as an "Operational Creditor" against the Company. Facts in brief necessary
for disposal of the controversy raised in this petition are as follows:-

a) The Company is engaged in real estate business including real estate
development. The Petitioner has described itself to be a Sole Proprietary
Concern carrying business under the name and style of Shri Balaji
International. It is averred that Company had been purchasing from the
Petitioner various types of steels and iron goods/ raw materials strictly as
per needs, requirements and specifications of the Company. It is further
averred that the Petitioner has been selling to the Amarpali Group/
Corporate Debtor goods against detailed invoices duly issued by the
Amarpali Group. The following amounts are due or in credit to the Petitioner,
namely:-
1. Amrapali Centurian Park Pvt Ltd, amount due Rs. 56,99,697
2. Amrapali Dream Valley Pvt Ltd amount due Rs. 33,23,527
3. Amrapali Infrastructure Pvt Ltd amount due Rs. 76,31,936
4. Amrapali Leisure Valley Developers Pvt Ltd amount due Rs.
74,95,597
5. Amrapali Princely Estates Pvt Ltd amount due Rs. 33.223
6. Amrapali Smart City Developers Pvt Ltd amount due Rs. 2,91,685
7. Hitech City Developers Pvt Ltd amount due Rs. 16,454
8. Ultra-Home Construction Pvt Ltd amount due Rs. 51,99,911.44
9. Amrapali Leisure Valley Pvt Ltd amount credit Rs. 5,40,246
10. Amrapali Silicon City Pvt Ltd amount credit Rs. 91,75,284
11. Amrapali Zodiac Developers Pvt Ltd amount credit Rs. 1,91,482
b) It is claimed by the Petitioner that in relation to the material supplied out of
the total billing of Rs. 1,97,85,018.44 a sum of Rs.10, 00 000/ vide cheque
bearing No. 966018 dated 27.06.2016 has been paid thereby leaving a
balance of Rs. 1,87,85,018.44 and further vide NEFT dated 03.10.2016, the
Company has also deposited a sum of Rs. 3,00,000. Thus in aggregate
the Company owes the Petitioner a sum of Rs. 1,84,85,018.44. It is claimed
that despite reminders the Corporate Debtor has failed to pay the balance
outstanding. Further the issue of cheques as discharge for the payment of
liabilities, the same has been dishonored time and again.
c) That the non-payment of the balance outstanding since July 2016 forced
the Petitioner to serve a notice of demand as contemplated under Section
8 of the Code through its counsel on 28.01.2017 at the registered office of
PRINCIPAL BENCH 637
the Company as well as through e-mail and till the date of filing of the
above petition on 07.03.2017, no reply has been received despite service
nor any payment has been made. This has given rise to the above petition
being filed under the Code for unleashing the Corporate Insolvency
Resolution Process as against the Company.
The above petition came to be listed before us on 14.03.2017. At the outset we are
unable to fathom the logic of the Petitioner in trying to enforce so called liabilities
of Amrapali Group, described in some places of the Petition as Corporate Debtor
against one company from the details given in the preceding paragraphs. It is
seen that eleven companies have been named to whom goods is alleged to
have been supplied by the Petitioner and with all of whom it is claimed that
running accounts are being maintained.
However when the Counsel for the Petitioner was put forthwith with the query as
to whether he is demanding such amount against one company or against the
group of companies to all of whom it had supplied the materials, the counsel for
the petitioner was not able to answer the paradox.
In order to apply the provisions of the Code, it is necessary that it must be against
a corporate person as defined under section 3(7) of the Code who must be also
be a Corporate debtor as defined under section 3(8) of the Code.
In the instant case, it is evident that the Petitioner is collectively trying to enforce
liabilities owed by a group of companies (Amrapli Group) against a single
Company which is not given taking into consideration the nature of the Code.
Hence the remedy of the Petitioner above named lies elsewhere and not under
the provisions of the Code. Before parting we make it clear that any observations
merit of controversy as we have refrained from entertaining the application at the
initial stage itself. Therefore, the right of the applicant before any other forum
shall not be prejudiced on account of dismissal of instant application.
For the reasons afore stated we reject the application/petition filed by the
petitioner/operational creditor without any costs.
PRESIDENT
(R.VARADHARAJAN)
Member (Judicial)
Dated: 22nd March, 2017

PRINCIPAL BENCH
NEW DELHI
C.P NO. (IB)-29(PB)/2017
CA NO.
CORAM:
Hon’ble President
SH. R.VARADHARAJAN
Gurcharan Singh Soni & Kuldeep Kaur Soni
Vs
Unitech Ltd. and Alice Developers Pvt. Ltd.
2016
1. Mukesh Chadha
ORDER
Dismissed in terms of AMR Infrastructure.

For order please see C.P. No. (IB)-28(PB)/2017
PRESIDENT
(R.VARADHARAJAN)
MEMBER (JUDICIAL)
PRINCIPAL BENCH 639

PRINCIPAL BENCH
NEW DELHI
C.P NO. (IB)-28(PB)/201
CA NO.
CORAM:
Hon’ble President
SH. R.VARADHARAJAN
Gurcharan Singh Soni & Kuldeep Kaur Soni
Vs
Alice Developers Pvt. Ltd.
2016
1. Mukesh Chadha GPA Holder C.A.
ORDER
This order shall dispose of C.P. Nos.(IB)28(PB)/2017 and (IB) 29(PB)/2017 as

common questions of law and facts are involved. The respondents are common
which are involved in developing infrastructure.
2. Few material facts may first be noticed. The respondent floated a Residential
Apartments Scheme named as Gardens, Sector 97, Uniworld City, Mohali (Punjab).
The applicants applied for allotment of one flat in the scheme and paid the
application money on 1.12.2010. Thereafter tripartite agreement was executed
between the applicants, Unitech Ltd. and Alice Developers Pvt. Ltd on 10.2.2011
for a total consideration of Rs.41,52,825/-. The amount was to be paid in
instalments. The possession of the flat was to be handed over within 36 months
of signing of the agreement. From 8.3.2011 to 24.6.2013 the applicants made a
payment of Rs.39,82,215.42 which include the amount of application money. On
14.4.2015 applicant sent a legal notice to Unitech Ltd.-Respondent with a request
of refund of entire amount alongwith interest which was not replied. Eventually,
the applicants filed a complaint before the State Consumer Disputes Redressal
Commission, Punjab and on 3.10.2016 the Commission passed the following
order:-
i) To refund of Rs. 39,82,315/- alongwith interest at the rate of Rs.12% per
annum from the date of payments till the date of payment;
ii) To pay a sum of Rs.3,00,000/- as compensation on account of mental
agony and harassment suffered by them; and
iii) To pay a sum of Rs. 11,000/- as litigation expenses
The compliance of this order shall be made by the opposite parties within one
month from the date of receipt of the certified copy of this order and failing that,
they shall be liable to pay interest on the said amount of Rs.3,00,000/- at the rate
of 12% per annum from the date of this order till the date of payment.
3. On the basis of the aforementioned order passed by the State Consumer
Disputes Redressal Commission the applicants have now approached this
Tribunal for triggering the Insolvency Process claiming themselves to be an
‘Operational Creditor’ under section 9 of the Insolvency and Bankruptcy Code,
2016 and dubbing the respondent to be the ‘Operational Debtor’. It is alleged that
the respondents have committed default and the amount has become payable.
4. We have heard Mr. Mukesh Chadha, GPA holder from the parities and have
explained to him that this Bench has already taken a view in the case of Sajive
Kunwar v. AMR infrastructure (IB-06(PB) 2017 decided on 16.2.2017) and therefore
they cannot be regarded as ‘Operational Creditor’ as per the express requirement
of section 9, 5(20) and 5(21) of the Insolvency and Bankruptcy Code, 2016. They do
not fulfil substantive ingredients of the aforesaid provisions and we have concluded
in AMR Infrastructure as follows:-
“6. From a bare perusal of Section 9 (1) of IBC (Supra) it becomes evident that a
cause of action to an 'Operational Creditor’ to file an application before NCLT
would arise if after 10 days notice given by him to the 'Operational Debtor, the
'Operational Creditor’ does not receive any payment from such a debtor or a
7. In order to fall within the four corners of 'Operational Creditor” as per Section
9 of the IBC it must be shown that he is a person to whom an 'Operational Debt’
PRINCIPAL BENCH 641
of Section 5 (20) of IBC. The expression 'Operational Debt’ has been defined by
(b) services; or
whether it would include all debts other than 'Financial Debt’ because we do
not find any such ‘Legislative intendment’ from the Part II of IBC which deals
with 'Insolvency and Liquidation for Corporate Persons’
8. Learned counsel for the petitioner has argued that the expression ' Corporate
Debtor’ means a person who owes a debt to any person as per Section 3(5) of
IBC. It is further emphasized that the expression 'Debt’ means a liability or
“Insolvency resolution and Liquidation’ and it has its own definition enumerated
9. Therefore the argument of the petitioner to treat this petition as the one under
section 9 of IBC is also without substance and we reject the same.”
5. We reiterate the view taken in the case of Sajive Kanwar (Supra) and following
the same, we dismiss these petitions. However the dismissal of the petitions
shall not be construed as an expression of opinion on the merit of the controversy
so as to cause any prejudice to the petitioners to file application to execute the
order passed by State Consumer Disputes Redressal Commission.
(R. VARADHARAJAN)
MEMBER (J)
PRESIDENT
Dated: 21.03.2017

PRINCIPAL BENCH
NEW DELHI
C.P NO. (IB)-25(PB)/2017
CA NO.
CORAM:
Hon’ble President
SH. R.VARADHARAJAN
Portrait Advertising & Marketing Pvt. Ltd.
Vs
Mothers Pride Dairy India Pvt. Ltd.
SECTION OF THE COMPANIES ACT: U/s 9 of Insolvency and Bankruptcy Code
2016
ORDER
There are lacunae in the petition and it is incomplete in material particulars.

Learned Counsel applies for withdrawal of the petition with liberty to file a fresh
one on the same cause of action.
The prayer is accepted and liberty is granted in terms thereof.
Dismissed as withdrawn.
PRESIDENT
(R. VARADHARAJAN)
MEMBER (JUDICIAL)
PRINCIPAL BENCH 643

PRINCIPAL BENCH
NEW DELHI
C.P NO. (IB)-17(PB)/2017
CA NO.
CORAM:
Hon’ble President
SH. R.VARADHARAJAN
Fichtner Consulting Engineers (India) Pvt. Ltd.
Vs
M/s. Punj Lloyd Ltd.
SECTION OF THE COMPANIES ACT: U/s 8 & 9 of Insolvency And Bankruptcy
Code, 2016
Goutham Advocate Counsel for
Shivashanker Petitioner
ORDER
Learned counsel after arguing the case for same time and realising that he will
not be able to persuade the Bench with his arguments, has applied for withdrawal
of the petitioner.
Dismissed as withdrawn.
PRESIDENT
(R VARADHARAJAN)
MEMBER (J)
Dated: 16.03.2017

PRINCIPAL BENCH
NEW DELHI
Company Application No. (I.B) 18(PB)/2017
Present: CHIEF JUSTICE (Retd.) SHRI M.M.KUMAR, HON’BLE
PRESIDENT & SHRI S. K. MOHAPATRA, MEMBER (TECHNICAL)
In the matter of:
Section 9 and other applicable provisions of the Insolvency and Bankruptcy Code.
2016 read with the rule 6 of the Insolvency and Bankruptcy (Application to
In the Matter of:
1. M/S Prowess International Private Limited
A-18 , 6th Phase, Adityapur Industrial Area,
Gamharia, Jamshedpur,
Jharkhand-832108
2. Action Ispat and Power Private Limited
5th Floor, Block A. ITL Twin Tower Subhash Palace, Pitampura,
New Delhi-110088
Operational Debtor
Counsel for the Petitioner: Manjulika Pal, Advocate
ORDER
(Order reserved on 09.03.2017)
On the ground that default has occurred, this application has been filed by M/s
Prowess International Private limited, Operational Creditor to initiate corporate
insolvency resolution process under Section 9 of the Insolvency and Bankruptcy
Code. 2016 against corporate debtor M/s Action Ispat and Power Private Limited.
2. The precise case of the applicant is that in the course of its business the
applicant company had supplied equipments and parts (2*15 Ton Landle Refining
Furnance) through various sales invoices dated 30.03.2011 for an aggregate
value of Rs. 2,92,51,560/- to M/s Action Ispat and Power Private Limited. It is also
their case that the supplies were accepted without any demur and M/s Action
Ispat and Power Private Limited made part payments against these supplies on
PRINCIPAL BENCH 645
various occasions and the last payment against the said supplies was made on
29.08.2012 for Rs. 20,00,000/-. As per the petitioner a sum of Rs. 79,76,715/-
(Rupees seventy nine lac seventy six thousand seven hundred fifteen only) is still
payable to them by M/s Action Ispat and Power Private Limited against the
aforesaid supplies.
3. It is submitted that after the last part payment made on 29.08.2012, payment to
the petitioner was stopped. On its follow up for payment the petitioner received a
mail from respondent company on 29.07.2013 which envisages that:
“Subject: RE: Project pending invoice
Dear Sir,
This is once again to remind you kindly furnish the status for your billing amount
as the discussed bill is over & above the ordered value.
Plz reconcile the matter latest by 31st July, 2013 otherwise we have to book the
bill at value of ZERO. In case no reply is received it will be treated as consent
from your end. ”
4. As desired the petitioner company had sent the payment details through mail
on the same date on 29.07.2013. However it is alleged that despite the compliance
M/s Action Ispat and Power Private Limited failed to make any further payments.
5. It is also the case of the petitioner that Respondent company vide Ref AIPL/HO/
PH-V/SMS/01 dated 13th October, 2010 had agreed to pay an additional 10% of
the total value of supplies made through its aforesaid purchase order if those
supplies were successfully made within 4 months of issue of its purchase order
dated 5th October, 2010. It is submitted that the supplies were manufactured and
kept ready for delivery within 4 months of the stipulated time, but the company
failed to take delivery in time and as such total value of the supplies got enhanced.
6. Petitioner submits that despite repeated demands and requests made by the
Petitioner for payment of the outstanding dues amounting to Rs. 79,76.715/-,
respondent company has failed and neglected to pay the same on one pretext or
the other.
7. Petitioner further states that a legal notice dated 15th May, 2016 was sent to the
respondent company demanding payment of the outstanding sum of Rs.
79.76,715/-, however despite such notice the company failed to make payment
of the aforesaid outstanding dues.
8. It is submitted that respondent company has acknowledged the aforesaid
dues in the company's audited financial statements for the FYs 2012-13, 2013-14,
and 2014-15 and that the said amount has not been written off.
9. The petitioner further submits that no part of the petitioner's claim is barred by
limitation in as much as the transaction between the petitioner and the respondent
company was continuous.
10. Petitioner has prayed for grant of reliefs claimed in the petition as the respondent
corporate debtor has deliberately failed and neglected to pay off the legitimate
claim of the petitioner without any lawful or reasonable excuse.
11. Heard Ld. Counsel for the petitioner and perused the case records.
12. In order to ascertain as to whether there is a default in making payment of the
operational debt, the tribunal is required to examine that the claim made before
it is within time. In case of revenue recovery the limitation period is three years
from the date on which the debt has fallen due or the claim has arisen. Law of
limitation has to be applied with all its rigor and tribunal has no power to extend
the period of limitation. A live claim after lapse of limitation period becomes a
stale claim unenforceable in law. Accordingly it is to be seen whether the tribunal
has been moved within the maximum period of three years prescribed under the
Indian Limitation Act, 1963 from the date on which the debt has fallen due or the
claim has arisen.
13. Admittedly the present claim arises in respect of supplies made by the petitioner
to the respondent company during the year 2011-12 through various sales invoices
all dated 30th March, 2011. Almost long six years have since passed. There is
also no dispute that last part payment against the said supplies was made by
respondent company on 29.08.2012 and there after it has stopped making any
payment to the petitioner. The present application has been filed on 15.02.2017
much after the limitation period of three years.
14. Ld. Counsel for the petitioner vehemently argued that no part of the petitioner’s
claim is barred by limitation in as much as the transaction between the petitioner
and the respondent company was continuous. It is further contended that petitioner
has been constantly chasing with regular follow up actions for the payment of the
outstanding dues. In this regard there is no dispute that the claim in question
arises in respect of supplies made during the year 2011-12 through various sales
invoices all dated 30th March, 201 1. There was no subsequent sale invoice after
30th March. 2011. This therefore, cannot be termed as continuous transaction to
save limitation. Similarly the contention that there was continuous follow-up and
chase for the payment of the outstanding dues will also not help. It is no longer
Res-integra that repeated representation and letters not provided under law
cannot itself extend limitation ( S.S. Rathor v. State of M.P.. AIR 1990 SC 10).
15. Ld. Counsel further argued that respondent company has acknowledged the
aforesaid dues in the company's audited financial statements for the FYs 2012-
PRINCIPAL BENCH 647
13, 2013-14, and 2014-15, and that the said amount has not been written off. The
rulings in the case of S. C. Gupta v. Allied Beverages Company Pvt. Ltd. were
referred, wherein it was held that the acknowledgment made by a company in its
balance sheet has the effect of extending the period of limitation for the purpose
of Section 18 of the Limitation Act.
16. Law in this regard is clear that acknowledgment executed within subsistence
of period of limitation creates fresh period of limitation from the date of
acknowledgment. An unqualified acknowledgment of liability by the debtor not
only saves the period of limitation but also gives a cause of action to the creditor
to base its claim thereon. In the present case however, no doubt the Petitioner
has enclosed the financial statements for the FYs 2012-13, 2013-14. and 2014-15
of the respondent company, but it could not be specifically shown as to where the
aforesaid dues outstanding to petitioner has been reflected in the company's
audited financial statements or which entry establishes that the said amount has
not been written off. It could not been shown specifically as to where
acknowledgment has been made by respondent company in its balance sheet.
All that could be shown from the financial statements of the company is one
general entry showing total outstanding amount without any specific imputation
of outstanding dues in the name of the petitioner. It is pertinent to note here that
last part payment against the said supplies was made by respondent company
on 29.08.2012 and there after it has stopped making any payment to the petitioner.
Petitioner has to show something specific for proving the acknowledgment of
debt thereafter. When a person is bound to prove the existence of any fact, the
burden of proof lies on that person. The plea of existence of acknowledgment of
debt through mere oral submission, in the absence of any documentary evidence,
cannot be accepted. The petitioner miserably failed to establish his contention.
Once the acknowledgment of debt is not established, the present belated claim,
filed after the lapse of limitation period by petitioner against the respondent, is to
be taken as time barred.
17. In the case of Bombay Dyeing and Manufacturing Company Limited v. State of
Bombay AIR 1985 SC 328 Hon'ble Apex Court has held that expiry of the period of
limitation prescribed under the Limitation Act could not extinguish the debt but it
would only prevent the creditor from enforcing the debt. Therefore when a debt
becomes time barred, it does not become extinguished but only unenforceable
in a court of law. Though the right is not extinguished, the remedies are clearly
barred. These rights are known as imperfect rights.
18. 'Debt' has been defined in the Insolvency and Bankruptcy Code, 2016 as a
liability or obligation in respect of a claim which is due and includes a financial
debt and operational debt. ‘‘Default” has been defined in the Code as non-payment
of debt which has become due and payable. (Emphasis given) A debt which is
not recoverable for any valid reason ceases to be an amount due and payable.
Default arises for non-payment of an amount which could be recovered in law.
Default is the event on the occurrence of which, the insolvency proceedings may
be initiated under the Code.
19. Claims which are time barred are not amount due and cannot be recovered
under law. Creditors have no right to recover claims of such due that become
time barred. The debt in question has become more than three years old and
was, therefore, not enforceable from respondent company in view of the law of
limitation. Consequently in the present case, as discussed, there has been no
default for initiation of insolvency proceedings.
20. In the facts and in the absence of default, the application filed by M/s Prowess
International Private limited to initiate corporate insolvency resolution process
under Section 9 of the Insolvency and Bankruptcy Code, 2016 against M/s Action
Ispat and Power Private Limited, is rejected without any order as to costs.
Pronounced in open court on 15.03.2017.
PRESIDENT
(S. K. MOHAPATRA)
MEMBER (TECHNICAL)
Dated: 15.03.2017
PRINCIPAL BENCH 649

PRINCIPAL BENCH
NEW DELHI
C.P NO.(IB)-16(PB)/2017
CA NO.
CORAM:
Hon’ble President
SH. R.VARADHARAJAN
Anil Mahindroo and Anr.
V/S
Earth Iconoic Infrastructure Pvt. Ltd.
SECTION OF THE COMPANIES ACT: U/s 7 of Insolvency and Bankrucptcy Code
2016
1. Neeraj Kr. Gupta Advocate Applicant
2. Viraj Sagar Das Advocate Respondent
ORDER
This is an application filed under section 7 of Insolvency and Bankruptcy Code

2016 (for brevity The Code') read with Rule 4 of the Insolvency and Bankruptcy
(Application to Adjudicating Authority) Rule 2016 (for brevity The Rule') with a
prayer for initiation of insolvency process in respect of the Respondent Company
with the provisions of the Code. The applicants have named Manisha Dhir as an
Insolvency Professor as per the provisions of the Act and Rules. They have further
prayed that the Respondent owe to the applicants a some of Rs.25,30,814/-
(computed as Rs.23,07,169/- + Rs.2,12,200/- + Rs.10,445/-) being the amount
due.
Brief facts of the case necessary for disposal of the instant petition are that a
MOU, allotment letter was executed between the applicants and Respondent
Company. They were allotted one flat reference No.ETTS 1959 on the first floor in
the project Earth Titanium Studios developed by Respondent Company at Greater

Noida, UP. The MOU contains an express promise made on behalf of the
Respondent Company for granted a returned on the investment and has been
styled as 'commitment amount' till the actual possession is delivered. The total
sale consideration for the flat was Rs.20,80,000 plus taxes. The possession of the
flat was to be delivered in September 2016. On the date of signing of the MOU
part payment of sale consideration alongwith service tax was paid and
Respondent Company had undertaken to make payment of commitment of
amount of Rs.20,000/- per month and it was to increase with the payment of the
next installation. The last instalment of the sale consideration was payable in
May 2015. Eventually the applicants have paid the entire agreed sale
consideration plus taxes. The Respondent Company paid the commitment amount
to the applicants till February 2016 and has stop paying the same subsequently.
The facts of the instant case are akin to those of a decided case in material
particulars namely Nikhil Mehta & Sons (HUF) & ors. v. M/s AMR Infrastructures
Ltd. [C.P No.(ISB)-03(PB)/2017] decided on 23.01.2017 by this Bench. The aforesaid
petition was also filed under section 7 of the Code. After hearing learned counsel
for the applicants we have expressed the view that applicants could not be
regarded as 'Financial Creditors' within the meaning of section 5(7) & (8) of the
Code nor their advance payment for purchase of the flat could be regarded as a
'Financial Debt' merely because there is a stipulation in the MOU with regard to
payment of assured return. In view thereof we adopt the same reasons which
have been given in the case of Nikhil Mehta (supra). A copy of the aforesaid order
in the Nikhil Mehta and sons' case may be added by the office which shall
constitute as a part of this order as well.
As a sequel to the discussion, this petition fails and the same is dismissed.
However, we make it clear before parting that any observations made in this
order shall not be construed as an expression of opinion on the merit of the
controversy as we have refrained from entertaining the application at the initial
stage itself when the respondents have not entered appearance and are not
present before us. Therefore the right of the applicants before any other forum
shall not be prejudiced on account of dismissal of the instant application.
PRESIDENT
(R. VARADHARAJAN)
MEMBER (J)
Dated: 08.03.2017
PRINCIPAL BENCH 651

PRINCIPAL BENCH
NEW DELHI
Present: CHIEF JUSTICE (Retd.) SHRI M.M.KUMAR, HON'BLE
PRESIDENT & SHRI R.VARADHARAJAN, MEMBER (JUDICIAL)
In the matter of:
2016 read with the Rule 6 with Rule 4 of the Insolvency and Bankruptcy (Application
to Adjudicating Authority) Rules, 2016.
In the matter of:
1. M/s.Jeevan Credit & Leasing Pvt. Ltd.
Cabin No.3, 1st Floor,
R-10, Green Park Main,
New Delhi-110016 Applicant Company/
Financial Creditor
VS.
2. M/s.King Airways Limited
1897, 2nd Floor, Uday Chand Marg,
Kotla Mubarakpur, New Delhi - 110003
Respondent/Corporate Debtor.
Counsel for the Petitioner: Shri P.K. Mittal, Advocate
Counsel for the Respondent: Shri Rajnish Sinha, Advocate
ORDER
1. This is an application seeking to invoke the provisions of Section 7 of the

Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiating
insolvency process against the respondent.
2. Brief facts can be discerned from the perusal of the application which are as
follow:-
(i) The applicant had made available to the respondent, unsecured loan to
the extent of Rs. 10,50,000/- in total in three tranches vide cheque payment
as follows:-
Cheque No. Date Amount

062499 05.02.2014 Rs.6,00,000/-
062500 05.02.2014 Rs.4,00,000/-
062501 10.09.2014 Rs.50,000/-
(ii) The total sum of loan is Rs.10,50,000/- as detailed above (Annexure I). It is
repayable by the respondent company to the applicant on or before
30.09.2016 at the rate of 16% interest. An MOU was also entered into
between the parties to this effect ( Annexure II).
(iii) The respondent on 11.04.2016 repaid a sum of Rs.5,00,000/- as evidenced
by Annexure III and the balance sum of Rs.5,50,000/- is due and payable
as evidenced by the certificate issued by the Chartered Accountant of the
applicant (Annexure IV).
(iv) On 09.10.2016 a demand letter was issued by the applicant to the
respondent seeking the repayment of Rs.5,50,000/-, being the balance
amount due with a further reminder on 10.11.2016 in view of inaction on
the part of the respondent to the earlier letter, both the demand and
reminder letters have been placed on record. ( Annexure V colly).
(v) The applicant also sent a notice under Section 433(e) of the Companies
Act, 1956 dated 30.11.2016 ( Annexure VI). The proof of dispatch and delivery
have been ( Annexures VII and VIII). The applicant has also sent a notice
under Section 8 of the Insolvency and Bankruptcy Code, 2016 calling upon
the respondent to repay the undisputed and admitted amount of
Rs.5,50,000/- towards principal amount and Rs.4,11,814/- towards interest
and the notice was sent (Annexure IX). The proof of dispatch and delivery
have been placed on record ( Annexure X and XI respectively).
(vi) The respondent company has not denied the liability to the applicant
and has expressed its inability to pay the amounts vide its
communication dated 17.01.2017 (Annexure XII). That the latest
available annual accounts of the respondent company discloses that
the liabilities far exceeds the assets and it is a fit case for winding up
as is evident from Annexure XIII.
(vii) Mr Manish Agarwal, Chartered Accountant has been named as the
Insolvency Resolution Professional who is registered with the Insolvency
and Bankruptcy Board of India as evidenced from the certificate issued
and that the said resolution professional has also given his consent to act
as such. (Annexure XIV).
PRINCIPAL BENCH 653
3. Based on the facts and submissions, the following reliefs prayers are being
sought:
a) Present application may kindly be admitted for further hearing;
b) Order for appointment of interim resolution professional;
c) Order for any consequential relief as are available under the Insolvency
and Bankruptcy Code;
d) Waive any requirement as may be permissible under the law;
e) Any other order or orders or relief or reliefs as this Hon'ble Tribunal, deem
fit and proper, under the circumstances of the whole case, may also kindly
be allowed;
4. The above application filed on 23.02.2017 came up for hearing on 01.03.2017.
At the time of hearing the Counsel for the Applicant, reiterated the submissions
made in the application as well as stressed upon the fact that the respondent
company has not disputed the liability. On the other hand it has expressed its
inability to make the payment due to financial difficulties. The respondent
entered its appearance through a counsel who represented that the respondent
is having since 1999, only two aircrafts as its asset which stand also grounded
for the past many years and it does not have any means to pay. However
learned counsel for the respondent pressed issuance of direction for moratorium
as envisaged under Section 14 of IBC in case this Tribunal chose to admit the
application of the Applicant.
5. Having laid out the facts and before going into the merits of the application, it
will be worthwhile to revisit the relevant provisions of the IBC as the
implementation of IBC is still at its infancy. Section 2 of IBC makes it clear that the
provisions of IBC will apply to Companies incorporated under the provisions of
Companies Act, 2013 or under previous Company Act, Limited Liability Partnership
(LLP) incorporated under the Limited Liability Partnership Act, 2008 or other
incorporated bodies as may be notified by the Central Government and partnership
and individuals in relation to their insolvency, liquidation, voluntary liquidation or
bankruptcy as the case may be. While the insolvency resolution and bankruptcy
for individuals and partnership firms under IBC is vested with the Debts Recovery
Tribunal as provided under Part III of the IBC, in relation to Corporate Persons the
jurisdiction has been vested with this Tribunal as provided under Part II of the IBC
titled as "Insolvency Resolution and Liquidation for Corporate Persons". Section
3(7) of the IBC defines a "Corporate Person" and Section 3(8) of the IBC defines a
"Corporate Debtor".
6. The instant Application, as already stated in the prelude to this Order, has been
filed under Section 7 of the IBC by the applicant as a "financial creditor" of the
respondent who it is claimed by the applicant as a "corporate debtor". However
no document, say the Certificate of Incorporation, has been produced by the
applicant to substantiate, prima facie, that the respondent is indeed a "corporate
person", other than a mere statement to the said effect, in Part II of the application.
Going further it is pertinent to note that Section 5(4) of the IBC defines in relation to
a Corporate Person what can be considered as the "constitutional document"
which includes the articles of association and a memorandum of association of
a company which also has not been produced. Further the present status of the
respondent has also not been substantiated with adequate documents to show
that the respondent who it is claimed to be a "Corporate Person" is in fact presently
in existence, which is per se quite essential for initiating the Corporate Insolvency
Process. In other words the Corporate Person should not have been wound up or
in the process of being wound up. Hence the status report of the Corporate
Person becomes a sine qua non to establish the existence of a corporate person
in the first place at the time of initiating the corporate insolvency process as
contemplated under IBC at the instance of the applicant. A perusal of Section 11 of
the IBC which deals with inability of a person to make an application mandates
that in case the Applicant happens to be a 'Corporate Applicant' as claimed in the
present instance than such Corporate Applicant should also not have suffered a
liquidation order. The application as filed by the applicant is devoid of any document
evidencing its incorporation and disclosing its current status.
7. The compulsion of the applicant to come out with the information and details
by way of pleadings and documents presently becomes necessary in view of the
absence of "Information Utility" as contemplated under Section 7 of the IBC. The
aforesaid provision reads as under:-
"7(1) A financial creditor either by itself or jointly with other financial creditors
against a corporate debtor before the Adjudicating Authority when a default
has occurred.
Explanation- For the purposes of this sub-section, a default includes a default
in respect of a financial debt owed not only to the applicant financial creditor
but to any other financial creditor of the corporate debtor.
(2) The financial creditor shall make an application under sub-section (1) in
such form and manner and accompanied with such fee as may be prescribed.
(3) The financial creditor shall, along with the application furnish-
PRINCIPAL BENCH 655

(4) The Adjudicating Authority shall, within fourteen days of the receipt of the
application under sub-section (2), ascertain the existence of a default from the
records of an information utility or on the basis of other evidence furnished by
the financial creditor under sub-section (3).
(5) Where the Adjudicating Authority is satisfied that-
(a) a default has occurred and the application under sub-section (2) is
complete, and there is no disciplinary proceedings pending against the
proposed resolution professional, it may, by order, admit such application;
or
(b) default has not occurred or the application under sub-section (2) is
incomplete or any disciplinary proceeding is pending against the proposed
resolution professional, it may, by order, reject such application:
Provided that the Adjudicating Authority shall, before rejecting the application
under clause (b) of sub-section (5), give a notice to the applicant to rectify the
defect in his application within seven days of receipt of such notice from the
(6) The corporate insolvency resolution process shall commence from the date
of admission of the application under sub-section (5).
(7) The Adjudicating Authority shall communicate -
(a) the order under clause (a) of sub-section (5) to the financial creditor and
(b) the order under clause (b) of sub-section (5) to the financial creditor,
Within seven days of admission or rejection of such application, as the case
may be."
8. In the absence of Information Utility, a question arises has the applicant claiming
to be a financial creditor, discharged the initial onus and that the certifying
professional thereafter has done his duty in certifying to the following effect:
"I, hereby, certify that the facts averred by the applicant in the present application
are true, accurate and complete and a default has occurred in respect of the
relevant corporate debtor. I have reached this conclusion based on the following
facts and/or opinion:-
1. Notice dated 13.01.2017.

2. Service Proof".
9. However perusal of the documents filed along with the application not only
shows defects in filing but also glaring inconsistencies which goes to the root of
the application and its maintainability. As already pointed out, in the absence of
certificate of incorporation and other constitutional documents of both the applicant
and respondent it is puzzling as to how the applicant and respondent can be
categorized as "Corporate Persons" and particularly the respondent who is alleged
to be a "Corporate Debtor" by the applicant. Status Report as can be ascertained
and obtained from web site maintained by MCA has also been not produced
which could have at the least disclosed to this Tribunal the existence of the
respondent on the file of Registrar of Companies and also about its current
status. Production of status report by the applicant could have also disclosed the
involvement of the respondent and the assets, if any charged and registered with
the ROC.
10. Further though the Applicant has claimed vide Annexure XIII (pages 35-39) as
the available annual accounts of the respondent, perusal of the same discloses
that only a few pages of the auditor's report that too of the applicant has been
filed, without any financial statement of the respondent enclosed and for that
matter even that of the applicant, which clearly shows the intent of the applicant
to not to disclose the information as required, for the Tribunal to exercise its
discretion.
11. Primarily to sustain the transaction of loan as given by the applicant to the
respondent, the applicant seeks to rely on a Memorandum of Understanding
(MOU) as entered into between two corporate entities. Curiously the said MOU
does not contain a date as to when the MOU was executed. Further the MOU also
seems to be not conclusive from the following words as found in the last paragraph
of the said MOU as reproduced hereunder:
"That the parties has agreed to enter into a detailed exhaustive agreement
later on" (emphasis supplied).
However no such further agreement as contemplated by the above terms
contained in the MOU has been produced before us. Further the applicant as a
Non Banking Financial Company is also required to comply with the provisions of
Section 186 of the Companies Act, 2013 in relation to the loan transaction termed
as Inter Corporate Deposit between two companies in relation to amounts made
available as loan subsequent to 01.04.2014. In any case the applicant has also
failed to furnish the necessary Board Resolution for granting the loan to the
respondent all of which literally clouds the transaction of loan itself.
PRINCIPAL BENCH 657
12. Further in relation to Notice of Default as furnished by the applicant (Annexure

IX) and taken together with proof of dispatch as well as proof of delivery, (Annexure
X and XI read with Annexure XII), being the so called acknowledgment raises
serious questions about the bonafide of the parties herein. They appear to have
stage managed the entire petition with an ulterior motive. At page 30 of the
application, the applicant has filed a certificate issued by the statutory auditor of
the applicant in relation to Ledger Account of King Airways Ltd. A perusal of the
same prima facie discloses that the said certificate is dated 30.11.2016, however
the certificate is in relation to the period between 01.04.2014 to 23.01.2017 i.e for
a period subsequent to the date of the certificate. Curiously the notice along
which the said certificate has been annexed to establish the amount claimed, is
however dated 13.01.2017.
13. Even in relation to the service of notice there seems to be glaring anomaly
as both the speed post and courier through which the notice dated 13.01.2017
seems to have been dispatched seems to have not been delivered or delivered
at some other place. However Annexure XII which is claimed to be
acknowledgment of liability alleged to have been issued by the respondent
reflects the same address to which the notices were sent by the applicant but
from which address the postal authorities report that the addressee (meaning
the respondent) had moved thereby casting a cloud on the application itself as
that of collusive as between the parties.
14. Taking into consideration all the above, we are unable to feel persuaded to
admit the application. However before parting it is incumbent to point out that the
professionals, whether it be a finance professional or secretarial, before issuing
certificates are required to be more vigilant as the Companies Act, 2013 as well
as the IBC places great faith on their certificates. The function of issuance of
certificates is a serious matter and it should not be done in a mechanical manner.
Further in the absence of Information Utility as contemplated under the IBC the
role of the named Interim Resolution Professional (IRP) becomes all the more
onerous and the certificate issued by him/her should conform to in effect vouching
the contents of the application and the documents filed therewith in fine detail. It
must not be made in a pedantic or mechanical manner. It is to be appreciated by
all the IRPs that they have been tasked with a very important function in the entire
scheme of Corporate Insolvency and Liquidation Process and the onus is cast on
them to act diligently. In this connection it will not be out of place to point out the
Code of Conduct for Insolvency Professionals as formulated by the Insolvency
and Bankruptcy Board of India under the regulations governing the Insolvency
Professionals. Finally the IBC by virtue of Section 65 clothes this Tribunal with
authority to impose a fine extending up to Rs.One Crore for fraudulent and
malicious initiation of proceedings and hence the parties and professionals are
required to be vigilant, careful and bonafide in approaching this Tribunal under

IBC.
This application is hence rejected for reasons aforestated but without costs.
PRESIDENT
(R.VARADHARAJAN)
MEMBER (JUDICIAL)
Dated: 08.03.2017
PRINCIPAL BENCH 659

PRINCIPAL BENCH
NEW DELHI
C.P NO. (IB)-06(PB)/2017
CA NO.
CORAM:
Hon’ble President
SH. R.VARADHARAJAN
Chharia Holdings Ltd.
Vs
BRYS International Pvt. Ltd.
SECTION OF THE COMPANIES ACT: U/s 7 Insolvency & Bankruptcy Code, 2016
1. Arpita Yadav Advocate Petitioner
ORDER
The petition is incomplete as no Insolvency Professional has been nominated.

The petition was filed on 02.02.2017. Moreover time was granted to the counsel
for the petitioner to place on record all the facts. However, the needful has not
been done. Accordingly the petition is dismissed in terms of the provisions of
Section 7 (5)(b) of the IBC.
PRESIDENT
(R. VARADHARAJAN)
MEMBER (J)

PRINCIPAL BENCH
NEW DELHI
Company Application No (I.B.)08/PB/2017
Present: CHIEF JUSTICE (Retd.) SHRI M.M.KUMAR,
HON'BLE PRESIDENT
In the matter of:
In the matter of:
1. M/s.One Coat Plaster
182/183, Indra Bhawan, V.P.O. Sikhrali, Sector-17a,
Gurgaon-122 001
2. M/s.Ambience Private Limited
Office at: L-4, Green Park Extension, New Delhi-110016 CIN:
U51503DL1986PTC023886
Corporate Debtor
In the matter of:
1. M/s. Shivam Construction Company
Plot No.SO-110, Khasra No.1965 Iqbal Colony, Garima Garden,
Ghaziabad-201 005
2. M/s. Ambience Private Limited
Office at: L-4, Green Park Extension, New Delhi-110016 CIN:
U51503DL1986PTC023886
Corporate Debtor
Counsel for the Petitioners: (i) Shri Dushyant K. Mahant, Advocate
PRINCIPAL BENCH 661
(ii) Shri Gaurav Dubey, Advocate

Counsel for the Respondent: Shri Sushant Kumar, Advocate
COMMON ORDER
The above petitions have been filed by the petitioners seeking to set in motion the
Corporate Insolvency Resolution Process (IRP) as contemplated under Section 9
of the Insolvency and Bankruptcy Code, 2016 in relation to one M/s. Ambience
Private Limited (for brevity hereinafter referred to as the 'Company') however
described in the petition as 'Corporate Debtor'. Brief facts as can be discerned
from the petition filed by the petitioners describing themselves as an "Operational
Creditor" against the Company giving rise to the filing of the petition are as follows:-
In relation to CA No.(I.B.)07(PB)/2017.
a) That the Company is engaged in real estate business including real estate
development and in pursuance of its business had initially issued a work
order dated 01.10.2015 bearing No. Ambience/15-16/363 for a specified
sum of Rs.204, 000/- in favour of the Operational Creditor which happens
to be a partnership firm carrying its business under the name and style of
One Coat Plaster. Subsequently it is averred that two more work orders
dated 13.10.2015 and 13.11.2015 were also placed on the Operational
Creditor by the Company as works contract for Gypsum Plaster for the
Walls/Ceiling at their site at Noida and the payment in relation to the
same was to be made as per actual work measurement at site. Further,
the payments to be released against bills. All the work orders placed by
the Company on the Operational Creditor, have been annexed. (Annexure
B, colly).
b) It is claimed that the Operational Creditor pursuant to the work orders had
executed the work subsequent to which bills were raised. It is contended
that in relation to the work carried out at a site named 'Pushpanjali' out of
the total billing of Rs.2,69,507.44 a sum of Rs. 1,00,085/- has been paid
thereby leaving a balance of Rs.1,69,422.44 and that in relation to the site
at Noida where the work had been carried out and as against the billed
amount of Rs.55,60,242.74 the Company has paid only Rs.24,68,832/-
leaving a balance of Rs.30,91,410.74. Thus in aggregate the Company
owes the Operational Creditor a sum of Rs.32, 60,833.18 it is claimed and
despite reminders have failed to pay the balance outstanding.
c) That the non-payment of the balance outstanding since July 2016 forced
the Operational Creditor to serve a notice of demand as contemplated
under Section 8 of the Code through its counsel on 25.01.2017 at the

registered office of the Company as well as through e-mail and till the
date of filing of the above petition on 08.02.2017, no reply has been received
despite service nor any payment has been made. This has given rise to
the above petition being filed under the Code for unleashing the Corporate
Insolvency Resolution Process as against the Company.
In relation to Company Application No. (I.B.)08/PB/2017, the following
fact emerges:
d) That the company engaged in real estate business including real estate
development and in pursuance of its business had initially issued a work
order dated 25.11.2015 bearing No. Ambience/15-16/480-A for a specified
sum in favour of the Operational Creditor which happens to be a sole
proprietary concern carrying business under the name and style M/
S.Shivam Construction Company. Subsequently, it is averred that one more
work order dated 25.11.2015 bearing No. Ambience/15-16/480-B was
also placed on the Operational Creditor by the company as work contract
for Gypsum Plaster for the Walls/Ceiling without supply of material at their
site at Noida and the payment in relation to the same to be made as per
actual work measurement at site and payments to be released against
bills. All the work orders placed by the Company on the Operational
Creditor it is averred by the Counsel for the Operational Creditor has been
annexed as Annexure B (colly).
e) That the Operational Creditor pursuant to the work orders had executed
the work subsequent to which bills were raised. It is contended that in
relation to the work carried out at Noida, out of the total billing of
Rs.16,79,646.66 a sum of Rs.7,83,746/- has been paid thereby leaving a
balance of Rs.8,95,900/-. Thus in aggregate the Company owes the
Operational Creditor a sum of Rs.8,95,900/-. It is claimed that despite
reminders the company has failed to pay the balance outstanding.
f) That the non-payment of the balance outstanding since 10.06.2016 forced
the Operational Creditor to serve a notice of demand as contemplated
under Section 8 of the Code through its counsel on 25.01.2017 at the
registered office of the Company as well as through e-mail and till the
date of filing of the above petition on 09.02.2017, despite service no reply
has been received nor any payment has been made. This has given rise
to the above petition being filed under the Code for unleashing the
Corporate Insolvency Resolution Process against the Company.
The above petitions came to be listed before us on 17.02.2017 on which date the
Counsel for the Company entered appearance and sought time for response and
PRINCIPAL BENCH 663
the hearing was deferred to 20.02.2017. On 20.02.2017 when the petitions were
taken up, the Counsel for the Company submitted that the Company had sent a
reply to the notice of demand sent by the Counsel for the Operational Creditor
dated 04.02.2017. The Company has taken the stand that due to defective and
poor quality of work on the part of the Petitioners no payment has been made and
have completely denied the claim of the Operational Creditor. In view of the
representation of the Counsel for the Company that a reply had been sent to the
legal notice of the Operational Creditor, the parties were directed to file the reply
as sent by the Company through its Counsel and the petitions were fixed for
hearing on 22.02.2017 for compliance.
Since the issues involved in both the Company Petitions are similar and concerning
the company named as "Corporate Debtor', the matter is taken up together and
disposed off as follows:
On 22.02.2017 we heard learned counsel for both the parties. The Counsel for the
Operational Creditors/Petitioners took us through the typed set of documents
filed along with the petitions. A perusal of the record shows that the work order
placed by the company primarily relates to works contract predominantly
concerning labour contract and the rate for the execution of the works contract
seems to be fixed on square feet basis. Further it is seen that the bills/invoices
raised by the petitioners annexed as Annexure C 'Colly' is computed on sq.feet
basis for ascertaining the quantum of work done and the amount payable for
carrying out the work. However when the Counsel for the Petitioners was asked
as to whether the Company or its authorized representative or architect had
certified the quantum of work done by the Petitioners in relation to the works
contract awarded to them, no such document was produced wherein the quantum
of work might have been certified or in relation to quality. This is the norm adopted
in building contracts of considerable value which ordinarily constitute the basis
for raising the bills. The engagement of the petitioners to execute the work cannot
be denied in view of the work order placed by the Company which is further
reinforced by payment in a sum of Rs.25,68,917/- to the Petitioner in C.A. No.07/
PB/2017 and Rs. 7,83,746/-. However in relation to the balance amount claimed
by the petitioners as due from the Company, we are unable to agree in view of
lack of materials submitted before us by the Petitioners and also taking into
consideration the fact that the debt sought to be fastened on the company has
been vehemently disputed as is evident from the reply to the notice sent by the
Company, which is dated 04.02.2017 but dispatched on 08.02.2017 to the counsel
for the petitioners.
Reference to the provisions of the Code, more particularly Section 9 thereof clearly
discloses that this Tribunal has the power, interalia also to reject the Application
of the Operational Creditor under Section 9(5)(d) in case of notice of dispute has
been received by the operational creditors or there is record of dispute with the
information utility. In the absence of information utility, we are perforce to rely on
the notice of dispute as sent by the Company to the petitioners denying the
liability based on which the entire edifice of the petitioner's claim crumbles which
constitutes basis of the present application. It is pertinent to note that the expression
dispute' has been defined and it seems to be an inclusive definition as seen from
Section 5(6) of the Code which reads as follows:-
"dispute" includes a suit or arbitration proceedings relating to -
(a) The existence of the amount of debt;
(b) The quality of goods or services; or
(c) The breach of a representation or warranty;
A bare perusal of Section 5(6) of the Code show that a dispute could be proved by
showing that a suit has been filed or arbitration are pending. It further elaborates
that suit or arbitration should be in respect of the existence of the amount debt,
quality of goods or services; or a breach of a representation or a warranty. It is not
an exhaustive definition but an illustrative one. It becomes evident from the
expression 'includes' which immediately succeeds the word 'dispute'. Moreover,
under Section 8(1) of the Code adequate room has been provided for the 'NCLT' to
ascertain the existence of a dispute. A demand notice by an 'operational creditor'
to an 'operational debtor' must be sent who has not paid operational dues and
has committed default. Section 8 (2) further clarifies that the corporate debtor is
obliged to bring to the notice of the 'Operational Creditor' within 10 days of the
receipt of notice, the existence of a dispute and record of the pendency of the suit
or arbitration proceeding filed before the receipt of such notice or invoice in
relation to such dispute. The other option is to pay the demanded amount. In the
instant case the Petitioner sent a demand notice which was duly received by the
'company' but the reply was also filed which has been delayed by four days
where dispute has been raised. As such on a perusal of documents submitted
before us by the petitioners, we are unable to fathom any material on record to
dislodge the same as already discussed in paragraph supra. Hence we are
inclined to reject the above petitions.
Hence the remedy of the Petitioners above named lies elsewhere and not under
the provisions of the Code. Before parting we make it clear that any observations
initial stage itself. Therefore, the right of the applicants before any other forum
shall not be prejudiced on account of dismissal of instant applications.
PRINCIPAL BENCH 665
For the reasons afore stated we reject the applications/petitions filed by the
petitioners/operational creditors without any costs.
PRESIDENT
(R.VARADHARAJAN)
MEMBER (JUDICIAL)
Dated: 1.03.2017

PRINCIPAL BENCH
NEW DELHI
C.P. NO. (IB)-03(PB)/2017
CA NO.
CORAM:
Hon’ble President
SH. R.VARADHARAJAN
Philips India Ltd.
Vs
Goodwill Hospital and Research Centre Ltd
SECTION OF THE COMPANIES ACT : U/s 7 of Insolvency and Bankruptcy Code,
2016
1. Harsh Raghuvanshi Advocate Respondent
2. N. Mahabir Advocate Petitioner
3. P.C. Arya Advocate Petitioner
FINAL ORDER
01.3.2017
This Order shall dispose of CP (ISB) No.03 (PB) of 2017 & CP (ISB) No.04 (PB) of
2017. Both the applications have been filed by M/s. Philips India Limited invoking
the provisions of Section 9 Insolvency and Bankruptcy Code 2016 (for brevity IBC).
Facts may be noticed from the first Petition i.e. CP (ISB)03(PB) of 2017. The applicant
has claimed that the Respondent Goodwill Hospital and Research Centre Limited
is a 'Corporate Debtor' as it owe a sum of Rs.1,119,869.00 to the applicant as the
principal amount plus interest. The applicant is engaged in manufacturing,
distribution and maintenance of various health care equipments, it entered into a
Comprehensive Annual Maintenance contract with the respondent on 2.8.2011
PRINCIPAL BENCH 667
and 11.5.2012, in respect of the Allum FD20C for the period from 1.9.2011 to 31.8.2012
& 1.9.2012 to 31.8.2013, respectively. The applicant had agreed to provide plant,
maintenance of the installed machine, Allum FD 20C etc. During the period of
contract, the applicant promised to keep the equipment in good working condition.
The applicant asserts that respondent had agreed to make the payment in
accordance with the provisions made in Clause 6 of the contract which reads as
under:
"(i) the amount of material, service or maintenance charges together with
applicable taxes (if any) shall be payable in full within 30 days of the Contract,
and
(ii) if the payment is not received within 30 days as specified above, Philips
shall be at liberty to terminate the Contract and recover the amount towards
charges for services, if any rendered at their standard rates.
The applicant has stated that it has provided maintenance during the relevant
period and fulfilled all its obligations in accordance with the provisions of the
contract. However, the respondent has failed to make full payment to the applicant.
It is claimed that the respondent never denied the factum of performing its
obligation by the applicant in accordance with the terms of the contract. The
following amount has been claimed against the invoices :
Date of the invoice Invoice Number Amount pending Original invoice
value
24.3.2013 950198391 381,958.59 477,786.94
23.1.2013 950197821 380,291.40 476,119.75
27.9.2012 950196954 357,619.02 453,447.37
Total principal Due 1,119,869.00
According to the averments made in the application, a number of meetings took

place and the respondent made a payment of Rs.94,000/- on 16.1.2014 which
was adjusted as partial payment of the dues owed by the respondent and its
sister concern Karina Health Care Private Ltd. equally in the ratio of 50% who is
the respondent in the second application. After the partial payment, the corporate
debtor still owed a sum of Rs.11,19,869.00 to the applicant who claims to be
operational creditor. A payment notice was sent by the applicant to the respondent
on 19.3.2014 with a request to clear its outstanding dues. Again on 09.3.2016,
another notice demanding payment under the hand of Legal Counsel for the
petitioner had been sent and the respondent sent a reply on 30.3.2016 and
refused to make any payment.
The applicant also sent a notice under Section 8 of the IBC to the respondent in
Form 3 as provided by the IBC Rules. The notice has been returned undelivered.
Like-wise, notice issued at other places also received back undelivered as the
registered office of the respondent was found locked. Eventually, a notice was
issued by email on the address of the responsible officer of the respondent on
2.1.2017. It refused vide letter dated 9.1.2017 to pay the debt. The applicant has
asserted that the respondent is in default and the applicant has become entitled
to recover a sum of Rs.11,19,869.00 along with interest @ 18% p.a. Accordingly, a
sum of Rs.17,16,314/- has been claimed as the total amount due which includes
the principal and interest calculated @ 18% p.a.. A copy of the contract dated
11.5.2012 has been placed on record (Annexure-I). A copy of the each unpaid
invoice has also been placed on record (Annexure-II colly). A sum of Rs.47,000/
- as paid on 16.1.2014 has been reflected in the accounts statement. The receipt
of the amount has also been placed on record (P-III). It is claimed that the corporate
debtor in its letter dated 30.3.2016 has admitted the outstanding amount of debt
and it has not intentionally paid the same.
We have heard the Learned Counsel for the parties at length and have perused
the Paper Book with their able assistance. Ld. Counsel for the applicant has taken
us 'through various documents filed along with the Application. A perusal thereof
would show that the work order placed by the corporate debtor primarily relates
to maintenance of the equipments. A bare perusal of the invoices would show
that it has included the charges for material and labour apart from CST, service
tax, operational cess & secondary and higher education cess. There is no
document placed on record certified by the respondent or its authorized
representative or a medical Technician that the work has been done satisfactorily
in accordance with the standard of norm/quality stipulated in the agreement. The
issuance of certificate is the norm adopted in all such contracts where the work of
maintenance is executed.
There is no other material on record to acknowledge the satisfactory completion
of work in terms of the provisions of the contract dated 2.8.2011 and 11.5.2012. It
is also not understood as to why the applicant has maintained blissful silence
over the claim to be made for such a long period after 16.1.2014.
A sum of Rs.47,000/- in respect of each of the petition has been paid on 16.1.2014.
It is also asserted that the claim has been made within three years and it is within
the limitation. A reference has been made to Section 19 of the Limitation Act to
argue that once part payment has been made, then the period of limitation would
commence from the date of part payment.
The reliance of the applicant on the provisions of Section 9 of IBC is not meritorious.
The applicant has claimed and has classified itself as 'operational creditor' and
PRINCIPAL BENCH 669
has prayed for triggering of the Insolvency Process . A bare perusal of Section 9 of
IBC would inter alia, reveal that this Tribunal is vested with the powers to reject
the application of the operational creditor under Section 9 (5) (d) of IBC in case it is
found that notice of dispute has been received by such an operational creditors,
or there is a record of dispute with the information utility. We have been informed
that no 'Information Utility' has so far been set up and we are here force to rely on
the notice of dispute as sent by the respondent operational debtor to the applicant.
In the notice of dispute, the liability to pay has been completely denied. To
appreciate the nature of dispute, It would be profitable to read the following part
of the reply dated 30.3.2016:
"'At the outset the allegations levelled under your notice dated 9.3.2016 are
being denied in its entirety for being false and concocted. It appears from the
tone and tenor of your notice that your client had not apprised you with the
correct facts and circumstances of the matter at hand, leading to the issuance
of the misconceived and ill founded notice dated 9.3.2016. It is brought to your
kind notice that dues as claimed by your notice were never outstanding against
my clients and the demand notice for the same is hopelessly barred by laws of
limitation and hence untenable under law.
It is brought to your notice that our clients entered into a Comprehensive Annual
Maintenance Contract with your client for the maintenance of installed Allura
Xper FD 20C at its hospital to keep the same in a good and proper working
condition. It was agreed under the clause 2 of the contract that the service will
be provided by your clients for the upkeep of the above mentioned medical
equipment at the site of my client but your client in the most unprofessional
manner failed to keep up with the contractual obligation taken by it vide contract
dated 11.5.2012 . It is further important to mention herein that the officials of
your client had failed to visit the premises of my client in a periodic manner for
the upkeep of the medical equipment due to which the functioning of the
equipment was majorly effected.
It is further important to mention herein that the Allura Xper FD20C installed at
the hospital of my client was left unattended at the hospital of my client for
several days due to minor problems which were to be repaired by your client
but were never repaired in time causing severe financial loss due to non
activity of the machine of my client. The unprofessional approach by the officials
of your client has caused major loss of reputation for my client and caused
severe inconvenience to the patient awaiting their treatment at the Hospital of
my client due to which the payment was deducted by my client and the same
was informed to the officials of your client."
A perusal of the aforesaid paras of the notice makes it patent that the operational
debtor has disputed the satisfactory performance and maintenance of the medical
equipment at the site in accordance with the contractual obligation undertaken
by the applicant vide contract dated '11.12.2012 . The reply specifically states that
the officials of the applicant had failed to visit the premises of the operational
creditor in a periodical manner to upkeep and maintain the medical equipment,
as a result of their negligence, the functioning of equipment has been adversely
affected. It has in fact caused major loss of reputation of the respondent operational
debtor in addition to severe inconvenience to the patients waiting for the treatment
at the Hospital. Accordingly, the payment was deducted by the respondent
operational Debtor and intimation was sent to the applicant.
It is pertinent to note that the expression dispute has been defined and it is an
inclusive definition as could be seen from Section 5(6) of the Code which reads as
follows :
"dispute" includes a suit or arbitration proceedings relating to:
(a) The existence of the amount of debt,
(b) The quality of goods or services, or
(c) The breach of a representation or warranty,
A bare perusal of the above provision of the 'IBC' shows that a dispute could be
proved by showing that a suit has been filed or Arbitration proceedings are
pending . It further elaborates that the suit or arbitration should be in respect of
the existence of the amount of debt, quality of goods or services, or for a breach
of a representation or a warranty. Obviously, it is not an exhaustive definition but
an illustrative one. It becomes evident from the expression 'includes' which
immediately succeeds the word 'dispute'. Moreover, under Section 8 (i) of the
Code adequate room has been provided for the 'NCLT' to ascertain the existence
of a dispute. A demand notice by an 'operational creditor' to an 'operational
debtor' must be sent who has not paid operational dues and has committed
default. Section 8 (2) further clarifies that the corporate debtor is obliged to bring
to the notice of the 'operational creditor' , within 10 days of the receipt of notice,
the existence of a dispute and show the record of the pendency of the suit or
arbitration proceeding filed before the receipt of such notice or with invoice in
relation to such dispute. The other option is to pay the demanded amount. In the
instant case, the applicant sent a demand notice which was duly received by the
respondent. A reply has also been duly filed where serious dispute has been
raised.
As such, on a perusal of documents submitted before us by the applicant, we are
unable to fathom any material on record to dislodge the stand of the respondent
as already discussed in the preceeding paras. Hence, we are inclined to reject
PRINCIPAL BENCH 671
the above Petitions. We have taken the same view in our judgment dated March
1, 2017 rendered in Company Application No. (I.B) 07/PB/2017 and Company
Application No. (I.B)08/PB/2017/ titled as M/s. One Coat Plaster Vs. M/s. Ambience
Pvt. Limited.
Hence, the remedy of the applicant above named lies elsewhere and not under
the provisions of the IBC, Before parting we make it clear that any observations
initial stage itself. Therefore, the right of the applicants before any other forum
shall not be prejudiced on account of dismissal of instant applications.
For the reasons aforestated, we reject both the applications filed by the applicant
operational creditors. However, owing to tenderness of the IBC, we leave the
parties to bear their own cost.
CHIEF JUSTICE M.M. KUMAR
PRESIDENT
(R. VARADHARAJAN)
MEMBER (JUDICIAL)

PRINCIPAL BENCH
NEW DELHI
C.P NO. (IB)-12(PB)/2017
CA NO.
CORAM:
Hon’ble President
SH. R.VARADHARAJAN
Parag Gupta
Vs
BK Educational Services Pvt. Ltd.
SECTION OF THE COMPANIES ACT: U/s 7 Insolvency and Bankruptcy Code 2016
1. Parag Gupta CA Petitioner
2. Mukul Gupta Advocate Petitioner
3. Asavin Kumar Advocate Petitioner
ORDER
Learned counsel for the petitioner prays for withdrawal of the petition with liberty
to file fresh one after removing the defects and placing on record all the necessary
documents.
We accept the request and grant liberty in terms of the prayer made. Dismissed
as withdrawn.
PRESIDENT
(R. VARADHARAJAN)
MEMBER (J)
PRINCIPAL BENCH 673

PRINCIPAL BENCH
NEW DELHI
C.P NO. (IB)-10(PB)/2017
CA NO.
CORAM:
Hon’ble President
SH. R.VARADHARAJAN
Col. Vinod Awasthy
Vs
AMR Infrastructures Ltd.
SECTION OF THE COMPANIES ACT: U/s 9 Insolvency and Bankruptcy Code 2016
1. C S Parashar Advocate Applicant
2. Mohit Kumar Advocate Applicant
ORDER
1. This is an application filed under section 9 of Insolvency and Bankruptcy Code

2016 (for brevity The Code') read with Rule 4 of the Insolvency and Bankruptcy
(Application to Adjudicating Authority) Rule 2016 (for brevity 'the Rule') with a
prayer for initiation of Corporate Insolvency Resolution process in respect of
Respondent Company.
2. In order to put the controversy in its proper perspective few material facts may
first be noticed. The respondent company has been incorporated on 15.06.2006
with ROC UP & Uttaranchal, Kanpur. The petitioner booked a flat for a total
consideration of Rs.19,80,000/- in the project known as i-Homes which was to
be completed by December 2013 and paid advance amount of Rs.9,87,284/-. On
18.10.2011 a MOU was executed between the Petitioner and Respondent
Company, it is also asserted that in accordance with the provisions of the MOU
Respondent Company had undertaken to pay a sum of Rs.9,050/- every month
w.e.f. 15.11.2011 to the Petitioner as 'assured return' till the date of possession on
the amount of Rs.9,87,284/- which was advance amount paid. The Respondent
paid the assured return upto December 2013 but failed to pay the same thereafter
despite repeated request by the petitioner which resulted in demand of the refund
of the entire booking amount.
3. On 28.3.2014 an allotment agreement was signed stipulating that possession
of fully furnished flat would be handed over by December 2014, however no
possession given till date. On 26.9.2016 a notice under section 433 etc of
Companies Act, 1956 was duly served at the registered office of the Respondent
Company calling upon it to pay due and admitted amount of Rs.12,76,884/-
along with interest within 21 days. On 25.1.2017 statutory notice under the Code
was issued which has been duly served on the Respondent.
4. It is on the aforesaid facts and circumstances that we have been called upon
to consider whether the Petitioner could be regarded as an 'Operational Creditor'
within the meaning of section 9 read with section 5(7) & (8) of the Code.
5. It is pertinent to mention that against the Respondent Company namely M/s
AMR Infrastructures Ltd. C.P No.(ISB)-03(PB)/2017 titled as Nikhil Mehta & Sons
(HUF) & Ors. v. M/s AMR Infrastructures Ltd. was filed by invoking section 7 of the
Code which was dismissed on 23.1.2017 by this Bench
6. We have heard learned counsel for the Petitioner at length and have not been
able to persuade ourselves to accept the submissions to initiate Corporate
Insolvency Resolution Process. It would be profitable to read relevant provisions
of section 9 of the Code in order to understand the locus standi of the Petitioner to
maintain this petition :
Application for initiation of corporate insolvency resolution process by / '
operational creditor.
9. (1) After the expiry of the period of ten days from the date of delivery of the
notice or invoice demanding payment under sub-section (1) of section 8, if the
operational creditor does not receive payment from the corporate debtor or
notice of the dispute under sub-section (2) of section 8, the operational creditor
may file an application before the Adjudicating Authority for initiating a corporate
insolvency resolution process.
(2) ..............................
(3) ..............................
(4) ..............................
PRINCIPAL BENCH 675
application under sub-section (2), by an order—

(i) admit the application and communicate such decision to the operational
creditor and the corporate debtor if —
(a) the application made under sub-section (2) is complete;
(b) there is no repayment of the unpaid operational debt
(c) the invoice or notice for payment to the corporate debtor has been
(d) no notice of dispute has been received by the operational creditor
(e) there is no disciplinary proceeding pending against any resolution
(ii) reject the application and communicate such decision to the operational
creditor and the corporate debtor, if –
(a) the application made under sub-section (2) is incomplete;
(b) there has been repayment of the unpaid operational debt
(c) the creditor has not delivered the invoice or notice for payment to
the corporate debtor
(d) notice of dispute has been received by the operational creditor or
(e) any disciplinary proceeding is pending against any proposed
7. A perusal of section 9 of the code would show that in order to maintain an
application as an 'Operational Creditor' the Petitioner has to satisfy the
petition like the in hand could be maintained only by an 'Operational Creditor'
against the 'Corporate Debtor. The aforesaid expression has been defined in
section 5(20) & (21) which would also be attracted and applicable. Section 5 (20)
& (21) of the code read thus:
"5. In this Part, unless the context otherwise requires, –
(20) operational creditor" means a person to whom an operational debt is
or transferred
(21) operational debt" means a claim in respect of the provision of goods or
Government, any State Government or any local authority;"
8. It is evident from the perusal of the aforesaid definition of 'Operational Debt'
local authority. It is thus clear that debt may arise out of provision of goods or
services or dues arising out of employment or dues arising under any law for
time being in force and payable to the Centre/State Government. The framer of
the Code have also defined the expression 'Financial Debt' in section 5(8) to
mean a debt which is disbursed against the consideration of time value of money.
However the framer of the Code has not included in the expression 'Operation
Debt' as any debt other than the 'Financial Debt'. It is thus confined to aforesaid
four categories like goods, services, employment and Government dues. In the
present case the debt has not arisen out of the provisions of goods or services.
The debt has also not arisen out of employment or the dues which are payable
under the statute to the Centre/State Government or local body. The refund sought
to be recovered is necessarily associated with the delivery of the possession of
immovable property which has been delayed.
9. The next question is whether the Petitioner could be regarded as an 'Operational
Creditor' within the meaning of section 5(20). The 'Operational Creditors' are
those persons to whom the 'Corporate Debt' is owed and whose liability from the
entity comes from a transaction on operations. The final report of the Committee
in para 5.2.1 defines 'Operational Creditor' like the wholesale vendor of spare
parts whose spark plugs are kept in inventory by Car Mechanic and who gets
paid only after spark plugs are sold to acquire the status of 'Operational Creditor'
so and so forth. The Petitioner in the present case has neither supplied any goods
nor has rendered any service to acquire the status of an 'Operational Creditor'.
10. We are further of the view that given the time line in the code it is not possible
to construe section 9 read with section 5(20) & (21) of the Code so widely to
include within its scope even the cases where dues are on account of advance
made to purchase the flat or a commercial site from a construction company like
the Respondent in the present case especially when the Petitioner has remedy
available under the Consumer Protection Act and the General Law of the land.
Therefore we are not inclined to admit the petition.
of treating a person like the petitioner as an "Operational Creditor". In para 6 to 10
we have expressed the following view:-
PRINCIPAL BENCH 677
"6. From a bare perusal of Section 9 (1) of IBC (Supra) it becomes evident that a
cause of action to an 'Operational Creditor' to file an application before NCLT
would arise if after 10 days notice given by him to the 'Operational Debt or the
'Operational Creditor' does not receive any payment from such a debtor or a
7. In order to foil within the four corners of 'Operational Creditor" as per Section
9 of the IBC it must be shown that he is a person to whom an 'Operational Debt'
of Section 5 (20) of IBC. The expression 'Operational Debt' has been defined by
(b) services; or
whether it would include all debts other than 'Financial Debt' because we do
not find any such legislative intendment' from the Part II of IBC which deals with
'Insolvency and Liquidation for Corporate Persons'
8. Learned counsel for the petitioner has argued that the expression 'Corporate
Debtor' means a person who owes a debt to any person as per Section 3(5) of
IBC. It is further emphasized that the expression 'Debt' means a liability or
"Insolvency resolution and Liquidation' and it has its own definition enumerated
9. Therefore the argument of the petitioner to treat this petition as the e under
section 9 of IBC is also without substance and we reject the same.
10. For the reasons stated above this petition fails and the same is dismissed.
Keeping in view the tenderness of the provisions of IBC we refrain from burdening
the petitioner with cost. Before parting we make it clear that any observations

merit of the controversy as we have refrained from entertaining the application
at the initial stage itself when the Respondents have not entered appearance
and are not present before us. Therefore the right of the Applicants before any
other forum shall not be prejudiced on account of dismissal of instant
application.”
12. As a sequel to above discussion this petition fails and the same is dismissed.
PRESIDENT
(R. VARADHARAJAN)
MEMBER (J)
PRINCIPAL BENCH 679

PRINCIPAL BENCH
NEW DELHI
C.P NO. (IB)-05(PB)/2017
CA NO.
CORAM:
Hon’ble President
SH. R.VARADHARAJAN
Mr. Jawahir Lai Dhar & anr.
Vs
M/s. Ultra Home Construction Pvt ltd
2016
1. Naku Sachdeva Advocate Petitioner
ORDER
Learned counsel for the petitioner applies for withdrawal of the petition with
liberty to file fresh one on the same cause of action after due compliance with all
the provisions of IBC, 2016.
Dismissed as withdrawn with liberty to file fresh one with same cause of action.
PRESIDENT
(R. VARADHARAJAN)
MEMBER (J)

PRINCIPAL BENCH
NEW DELHI
C.P NO. (IB)-03(PB)/2017
CA NO.
CORAM:
PRESENT: CHIEF JUSTICE M. M.KUMAR
Hon’ble President
SH. R.VARADHARAJAN
Nikhil Mehta & Sons (HUF) & ors
Vs
M/s AMR Infrastructures Ltd.
2016
1. Mr. Varun Kathuria Advocate
ORDER
1. This is an application filed by four applicants for triggering insolvency process

by invoking Section (7) of the Insolvency and Bankruptcy Code, 2016 (for brevity
’IBC’) read with Rule-4 and Rule-9 (1) of the Insolvency and Bankruptcy (Application
to Adjudicating Authority) Rules, 2016 (for brevity ‘IBR’). The application is directed
against M/s. AMR Infrastructure Limited. The details of Applicants as disclosed in
the application is as follows: Applicant No.1 is a HUF with Shri Nikhil Mehta as its
Karta, Applicant No.2 is the wife of Shri Nikhil Mehta who himself is Applicant
No.3. Applicant No.4 is Mrs. Praveen Mehta, mother of Applicant No.3. The
application has been filed through Power of Attorney holder Shri Suresh Mehta,
who is father of Applicant 3 and husband of Applicant No.4. He is also resident of
Greater Kailash-I, New Delhi.
2. It is appropriate to mention that all the Applicants claim themselves to be the
‘’Financial Creditors’ within the meaning of the term used in Section-7 of ‘IBC’. In
PRINCIPAL BENCH 681
order to put the controversy in its proper perspective few facts may first be noticed.
In accordance with the averments made in the application, the first three Applicants
are resident of United States of America and the Applicant No.4, mother of Applicant
No.3 resides in Delhi. Respondent viz. M/s. AMR Infrastructure is a Registered
Company having its Head Office in Delhi. It is in the real estate business of
constructing, promoting and developing commercial and residential properties,
office spaces etc. A true typed copy of its Memorandum of Association has been
placed on record (Annexure-A).
3. Applicants No.3 and 4 booked two Office spaces measuring 1000 sq.ft. in their
respective names under the project known as “Kessel-I - Valley” and executed
Memorandum of Understanding dated 12.07.2007. It is alleged that the
Memorandum of Understanding was lost by the Respondent with a mala fide
intention and some ulterior motive. In its place, a new Memorandum of
Understanding was sent to the petitioners for signature which had terms and
conditions different than the one originally agreed between the parties. As a
consequence, the applicants refused to sign the new Memorandum of
Understanding and demanded refund of the amount paid by them to the
Respondent. The applicants then substituted their booking in the project called ”I-
Mall” which had shops and other commercial units. It required further investment
to purchase a unit in the “I-Mall” project. Accordingly, a fresh Memorandum of
Understanding dated 17.10.2012 was executed and unit No.E-06 measuring about
1101 sq.ft. was allotted to the applicant in the project ‘I-Mall’. The total price of the
unit was Rs.39,57,400/- and a sum of Rs.39,21,300/- was paid by the applicants
to Respondent on 17.10.2012 at the time of execution of the Memorandum of
Understanding. The balance amount of Rs.36,100/- was to be paid by the
applicants 3 & 4 at the time of possession of the aforesaid unit. According to the
terms of Memorandum of Understanding, the Respondents were required to
build and deliver possession of the unit within two years from the date of execution
of the MOU. The Memorandum of Understanding, however, stipulated payment
of Rs.82,214/- per month as its “Assured Returns” with effect from 30.10.2012 till
the possession of the unit was delivered to the applicant.
4. Likewise applicants No.2 and 3 also booked a shop bearing No.E-47 in the “I-
Mall” project measuring 1453.432 sq.ft. super area for a total consideration of
Rs.46,67,402/-. An amount of Rs.36,50,000/- was paid by them at the time of
booking. The remaining amount of Rs.10,17,402/- was to be paid by them at the
time of taking possession. A Memorandum of Understanding dated 12.04.2008
was executed between the parties with various terms and conditions of the Sale/
Allotment. The Respondent were to complete the construction by December
2009. The stipulation in the MOU required the Respondent to pay the applicants
No. 2 and 3, a sum of Rs.99,600/- each month as an amount of “Assured Returns”
with effect from April 2008 till the possession of shop was delivered to them. It
appears that the applicants had agreed for payment of Assured Returns from
January 2009 and in return Respondent committed itself to make the payment of
Assured Returns for the period of 9 months to applicants 2 and 3 in future returns
or adjust the total amount at the time of possession. It is pleaded by the Respondent
that from January 2009 till March 2010, the Respondent continued making payment
to the applicants 2 and 3 for an amount of Rs.88,315/-, whereas it was actually
supposed to pay an amount Rs.99,600/-. However, the mistake was rectified
and the Respondent started paying to the applicants the agreed amount from
April 2010. It was further agreed by the Respondent to pay the difference of
amount of Rs. 19,875/- in the near future.
5. Applicant No.1 also booked a fully-furnished residential flat measuring 550 sq.ft.
on the 4th Floor for a consideration amount of Rs.7,24,000/-. A sum of Rs.5,80,000/
- was paid by the Applicant No.1 to the Respondent at the time of booking and the
remaining amount of Rs.1,44,000/- was to be paid at the time of delivery of
possession which included Club charges, EFC charges, EEC charges and IFMS
charges. A Memorandum of Understanding was executed between the parties on
20.08.2009 with detailed terms and conditions. According to the terms of the MOU,
construction of the fully-furnished flat was to be completed on or before July 2011.
Before the offer of possession, a sum of Rs. 12,000/- as Assured Returns each
month was required to be made with effect from August 2009.
6. After the execution of various Memorandum of Understandings, the Respondent
started paying the monthly “Assured Returns” to the applicants although erratically.
It is alleged that the cheques issued by the Respondent was dishonored for the
reasons, inter alia, of insufficient funds. The last cheque issued for Assured Returns
credited in the account of the Applicant No.1, Applicant No.2 and 3 for their
respective unit was on 11.01.2014 in respect of the month of December 2013. In
respect of the Applicant No.3 and 4, it was credited in their account on 26.07.2014.
It was actually for the month of March 2014. Thereafter no cheque for the Assured
monthly Return has been issued by the Respondent despite repeated requests.
None of the project of any of the Applicant has been completed by offering
possession. It is alleged that many other like the applicants have been duped to
invest their hard-earned money in many projects belonging to the Respondent. It
is alleged that a number of persons have initiated winding up proceedings against
the Respondent Company which are pending in the High Court of Delhi, and are
listed for 28.03.2017. A true copy of Order dated 30.05.2016 passed by the Hon’ble
High Court Delhi has been placed on record (Annexure-B).
7. The Applicant issued 3 legal notices on 13.12.2016 under section 433(e) and
434 of the Companies Act, 1956 demanding different amounts being the amount
of monthly “Assured Returns” due as per terms of MoUs and payable to the
PRINCIPAL BENCH 683
Applicant No.1, Applicant No.2 and 3; and Applicant No.3 and 4 respectively for
their three units. It is asserted that the aforesaid amount is an admitted debt by
Respondent. According to the Applicants, the Respondent is unable to meet its
liability as is evident from the non-payment of dues. Therefore the instant
application has been filed for triggering the corporate insolvency resolution process
under Section 7 of the Act.
8. The matter came up for hearing on 19.1.2017 and we posted the same for
hearing today because no one had put in appearance on behalf of the Respondent.
Learned Counsel for the Applicants have shown us the tracking report which
reveal that a copy of the application was delivered to the Respondent on 17.01.2017.
9. We have heard learned counsel at some length. We confronted learned counsel
for the Applicants with a query as to how the Applicants would be covered by the
expression ‘Financial Creditor’ and the expression ‘Financial Debt’ within the
meaning of the term used in Section 7 and Section 5 (7) & (8) of the IBC. According
to the learned counsel, the default in payment of the amount of “Assured Returns”
payable by the Respondent would be sufficient to satisfy the requirement of
Section 7 read with Section 5 (7) and (8) of the IBC.
10. In order to find out as to whether the Applicant answers the description of
“Financial Creditor” and “Financial Debt” in terms of the aforesaid provision of the
Act, it would be profitable to read the provisions of Sections 5 (7) & (8) and Section
7 of IBC which are set out below:
“5. Definitions: In this Part, unless the context otherwise requires,-
7. “financial creditor” means any person to whom a financial debt is owed and
includes a person to whom such debts has been legally assigned or transferred
to;
8. ’’financial debt” means a debt along with interest, if any, which is disbursed
against the consideration for the time value of money and includes-
(a) money borrowed against the payment of interest;
(b) any amount raised by acceptance under any acceptance credit facility or
its dematerialised equivalent;
(c) any amount raised pursuant to any note purchase facility or the issue of
bonds, notes, debentures, loan stock or any similar instrument;
(d) the amount of any liability in respect of any lease or hire purchase contract
which is deemed as a finance or capital lease under the Indian Accounting
Standards or such other accounting standards as may be prescribed;
(e) receivables sold or discounted other than any receivables sold on non-
recourse basis;
(f) any amount raised under any other transaction including any forward
sale or purchase agreement, having the commercial effect of a borrowing;
(g) any derivative transaction entered into in connection with protection
against or benefit from fluctuation in any rate or price and for calculating
the value of any derivative transaction, only the market value of such
transaction shall be taken into account;
(h) any counter - indemnity obligation in respect of a guarantee, indemnity,
bond, documentary letter of credit or any other instrument issued by a
bank or financial institution;
(i) the amount of any liability in respect of any of the guarantee or indemnity
or any of the items referred to in sub-clauses (a) to (h) of this clause;
7. Initiation of corporate insolvency resolution process by financial creditor - (1)
A financial creditor either by itself or jointly with other financial creditors may
file an application for initiating corporate insolvency resolution process against
a corporate debtor before the Adjudicating Authority when a default has
occurred.
Explanation.-For the purposes of this sub-section, a default includes a default
(3) The financial creditor shall, along with the application furnish-
(c) any other information as may be specified by the Board
11. From a bare perusal of Section 7 of the IBC, it is patent that the insolvency process
can be triggered by a “Financial Creditor” individually or jointly against a corporate
debtor when default has occurred. The first question arises for consideration is as
to who is a ‘Financial Creditor’. In order to ascertain the meaning of that expression
we have to examine its definition as provided by Section 5 which is applicable to
Part II. We have already extracted the provisions of Sections 5 (7) and 5 (8) of the IBC
which are relevant to the issue raised. Section 5 (7) of IBC defines the expression
“Financial Creditor” and Section 5 (8) of IBC defines the expression “Financial debt”
which has been used in Section 5 (7) of IBC.
12. A perusal of definition of expression ‘Financial Creditor’ would show that it
PRINCIPAL BENCH 685
refers to a person to whom a Financial debt is owed and includes even a person to
whom such debt has been legally assigned or transferred to. In order to understand
the expression ‘Financial Creditor’, the requirements of expression ‘financial debt’
have to be satisfied which is defined in Section 5(8) of the IBC. The opening words
of the definition clause would indicate that a financial debt is a debt along with
interest which is disbursed against the consideration for the time value of money
and it may include any of the events enumerated in sub-clauses (a) to (i). Therefore
the first essential requirement of financial debt has to be met viz. that the debt is
disbursed against the consideration for the time value of money and which may
include the events enumerated in various sub-clauses. A Financial Creditor is a
person who has right to a financial debt. The key feature of financial transaction as
postulated by section 5(8) is its consideration for time value of money. In other
words, the legislature has included such financial transactions in the definition of
‘Financial debt’ which are usually for a sum of money received today to be paid for
over a period of time in a single or series of payments in future. It may also be a sum
of money invested today to be repaid over a period of time in a single or series of
installments to be paid in future. In Black’s Law Dictionary (9th edition) the expression
Time Value' has been defined to mean “the price associated with the length of time
that an investor must wait until an investment matures or the related income is
earned”. In both the cases, the inflows and outflows are distanced by time and
there is a compensation for time value of money. It is significant to notice that in
order to satisfy the requirement of this provision, the financial transaction should be
in the nature of debt and no equity has been implied by the opening words of
Section 5(8) of the IBC. It is true that there are complex financial instruments which
may not provide a happy situation to decipher the true nature and meaning of a
transaction. It is pertinent to point out that the concept ‘Financial Debt’ as envisaged
under Section 5(8) of the IBC is distinctly different than the one prevalent in England
as provided in its Insolvency Act, 1986 and the ‘Rules’ framed thereunder. It appears
that in England there is no exclusive element of disbursement of debt laced with
the consideration for the time value of money. However, forward sale or purchase
agreement as contemplated by Section-5 (8)(f) may or may not be regarded as a
financial transaction. A forward contract to sell product at the end of a specified
period is not a financial contract. It is essentially a contract for sale of specified
goods. It is true that some time financial transactions seemingly restructured as
sale and repurchase. Any repurchase and reverse repo transaction are sometimes
used as devices for raising money. In a transaction of this nature an entity may
require liquidity against an asset and the financer in return sell it back by way of a
forward contract. The difference between the two prices would imply the rate of
return to the financer. (See Taxman’s Law Relating to IBC, 2016 by Vinod Kothari &
Sikha Bansal) When we examine the nature of transactions in the present case, we
find that it is a pure and simple agreement of sale or purchase of a piece of property.
The agreement to sell a flat or office space etc. Merely because some “assured
amount” of return has been promised and it stands breached, such a transaction
would not acquire the status of a ‘financial debt’ as the transaction does not have
consideration for the time value of money, which is a substantive ingredient to be
satisfied for fulfilling requirements of the expression ‘Financial Debt’.
13. Essentially in the case in hand ‘Assured Returns’ is associated with the delivery
of possession of the aforementioned properties and has got nothing to do with
the requirement of sub-section (8) of section 5. It is the consideration for the time
value of money which is mercifully missing in the transaction in hand. The classical
transaction which would cover the definition of financial debts is illustrated in
sub-clause (a) of sub-section (8) of Section-5 i.e. the money borrowed against the
payment of interest. Learned Counsel of Applicants has not been able to show
from any material on record or otherwise that it is a financial transaction in which
a debt has been disbursed against the consideration for the time value of money
and he being the Financial Creditor is entitled to trigger the insolvency process
against the Respondent in accordance with Section 7 of the IBC.
14. Even otherwise the present petition would not be maintainable as many
winding up petitions have been filed before Hon’ble Delhi High Court being
Company Petition No.477 of 2014, Company Petition Nos. 689,691,692,693, 694,
695, 700, and 722 of 2015 along with CP No.238 and 244 of 2016. Even the
Official Liquidator has been appointed as a provisional liquidator although the
matter is presently pending before the Appellate Bench with interim directions.
15. As a sequel to the above discussions, we are unable to persuade ourselves
to accept that the applicants are covered by the expression “Financial Creditor” in
term. The arrears of “assured returns” would also not be covered by the expression
‘financial debt’. Therefore the applicants do not answer the description of Section
7 read with Section 5(7) & 5(8) of IBC. The application is accordingly dismissed.
The remedy of the Applicant may lie elsewhere.
16. We make it clear before parting that any observations made in this order shall
not be construed as an expression of opinion on the merit of the controversy as
we have refrained from entertaining the application at the initial stage itself when
the Respondents have not entered appearance and are not present before us.
Therefore the right of the Applicants before any other forum shall not be prejudiced
on account of dismissal of instant application.
PRESIDENT
(R. VARADHARAJAN)
Dated: 1.03.2017 MEMBER (JUDICIAL)
AHMEDABAD BENCH 687
AHMEDABAD BENCH
AHMEDABAD BENCH 689

AHMEDABAD BENCH
AHMEDABAD
C.P. (LB) No. 9/9/NCLT/AHM/2017
Present: Hon’ble Mr. BIKKI RAVEENDRA BABU MEMBER JUDICIAL
Acme Specialities
V/s.
Entire Ceramics Ltd.
1. Wasif S Kadri Advocate Operational Creditor
2.
ORDER
Learned Advocate Mr. Wasif S Kadri present for Operational Creditor/ Applicant.
None present for Corporate Debtor.
Heard Learned Counsel for Operational Creditor.
The notice dated 18.02.2017 issued by the operation creditor is not in form 3 of the
Adjudication Rules.
Learned Counsel for petitioner requested this Adjudicating Authority to withdraw
the petition with liberty to file another petition complying with Rule 5 of Adjudication
Rules.
Petition is disposed of accordingly. Petitioner is permitted to withdraw with liberty
to file fresh petition.
MEMBER (JUDICIAL)
Dated : 21.04.2017
689

AHMEDABAD BENCH
AHMEDABAD
Coram:
Present: Hon’ble Mr. BIKKI RAVEENDRA BABU
MEMBER (JUDICIAL)
Master Engineering Works
V/s.
Sagar Automobiles Pvt Ltd.
Section of the Companies Act : Section 6 of the Insolvency and Bankruptcy
Code, 2016
1. Mehul Surti Advocate Operational Creditor
ORDER
Learned Advocate Mr. Mehul Surti present for Operational Creditor/ Applicant.
Heard Learned Counsel for Operational Creditor/ Applicant.
Learned Counsel for Operational Creditor submitted that notice was issued to
Corporate Debtor on 14.09.2016 before the Code came into force and he has not
issued notice as per Rule 5 of the Adjudication Rules under Code.
Learned Counsel for Applicant sought the permission of this Adjudicating Authority
to withdraw the application with the liberty to file fresh petition.
Petitioner is permitted to withdraw the petition with liberty to file fresh petition.
Petition is disposed of accordingly.
MEMBER (JUDICIAL)
Dated : 20.04.2017
AHMEDABAD BENCH 691

AHMEDABAD BENCH
AHMEDABAD
Coram:
MEMBER JUDICIAL
Shree Raj Rajeshwari Car Care
V/s.
Shirani Automotive Pvt Ltd.
Section of the Companies Act: Section 6 of the Insolvency and Bankruptcy Code,
2016
1. Mehul Surti Advocate Petitioner
ORDER
Learned Advocate Mr. Mehul Surti present for Operational Creditor/ Applicant.
Heard Learned Counsel for Operational Creditor/ Applicant.
Learned Counsel for Operational Creditor submitted that notice was issued to
Corporate Debtor on 14.09.2016 before the Code came into force and he has not
issued notice as per Rule 5 of the Adjudication Rules under Code.
Learned Counsel for Applicant sought the permission of this Adjudicating Authority
to withdraw the application with the liberty to file fresh petition.
Petitioner is permitted to withdraw the petition with liberty to file fresh petition.
Petition is disposed of accordingly.
MEMBER (JUDICIAL)
Dated : 20.04.2017
BEFORE THE ADJUDICATING AUTHORITY

AHMEDABAD BENCH
AHMEDABAD
IA65/2017 in C.P. (I.B) No. 6/9/NCLT/AHM/2017
Coram:
MEMBER JUDICIAL
Arun Structurals And Engineers Pvt. Ltd.
V/s.
Alok Industries Ltd.
Section of the Companies Act: Section 9 of the Insolvency and Bankruptcy Code,
2016
1. Naina Kanagat Advocate Petitioner
ORDER
Learned PCS Mr. Naina Kanagat i/b Nithish Bangera present for Operational
Creditor. None present for Corporate Debtor.
Applicant Operational Creditor filed this application before Adjudicating Authority
to withdraw the petition.
Heard learned PCS for Operational Creditor.
Perused the contents of Application.
Rule 8 of Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules,
2016 says the Adjudicating Authority may permit withdrawal of the application
made under Rule 4, 6 and 7 as the case may be on request made by the Applicant,
before its admission.
The Petition CP (IB) No. 6/2017 is filed by Operational Creditor under section 9 of
the code r/w Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating
Authority) Rules, 2016.
AHMEDABAD BENCH 693
The petition CP (IB) 6/2017 is posted today. It is not yet admitted.

Hence Operational Creditor is permitted to withdraw CP (IB) no. 6/2017.
IA 65/2017 is ordered accordingly.
CP (IB) no. 6/2017 is dismissed as withdraw.
No order as to costs.
MEMBER (JUDICIAL)
Dated : 17.04.2017
ALLAHABAD BENCH 695
ALLAHABAD BENCH
696
ALLAHABAD BENCH 697
BEFORE NATIONAL COMPANY LAW TRIBUNAL

ALLAHABAD BENCH
ALLAHABAD
CP No. 36/ALD/2017
ATTENDANCE-CUM-ORDER SHEET OF THE HEARING OF ALLAHABAD BENCH OF
THE NATIONAL COMPANY LAW TRIBUNAL ON 28.04.2017.
J.K. Jute Mills Mazdoor Morcha
SECTION OF THE COMPANIES ACT: U/s 9 of the Insolvency and Bankruptcy
Code, 2016
1.
2.
Order
Dated 28.04.2017
CP No. 36/ALD/2017 : J.K. Jute Mills Mazdoor Morcha
The case is fixed for order today. The order in detail is recorded separately. The
petition is not found fit for admission hence is liable to be rejected. The operative
of the detailed order reads as under:
“With above stated observation the present application is not found fit to be
admitted hence hereby is rejected. The main reasons for rejection of application
may be summaries as under:”
The Operational Creditor in its application (in prescribed format Part V Column III)
has made such statement that there are none case pending before the Tribunal
/Court or Arbitrator on the adjudication of the default at the time of filing of the
present Application on 28th March, 2017. However, a perusal of the objections
filed by Corporate Debtor in reply to the demand notice of the Operational Creditor}
It is seriously disputed informing such the Corporate Debtor has already filed a
civil suit 249/2017 before the court of the Civil Judge Kanpur, UP on 21st March,
2017 wherein the learned Civil Court has pleased to issue notice to opposite
parties including the Operational Creditor, in support of its contention the Corporate
Debtor has enclosed a copy of the tracking report of delivery of speed post (the
demand notice issued) dispatched by the Optional Creditor. The same was
delivered to the Corporate Debtor Company through its director Mr. Shashi Kant
Jha at 4.17 PM on 21st March, 2017.
There is no rebuttable evidence available on record to show that there is no

dispute about the debt pending in a Civil Court before receipt of notice by the
Corporate Debtor Company. In normal prudence it can be expected well that the
suit in question has been filed on 21st March, 2017 during court hours and after
the presentation of a suit the Civil Court could be able to issue notices to
dependants including the operational creditor, hence by no stretch of imagination
it can be concluded that the suit has been filed by Corporate Debtor after receipt
of demand notice.
As per matter available on record of record the demand notice was delivered
though Speed Post on 21st March, 2017 at 4.17 PM in the office of the director of
the Company situated at R. K Nagar, Kanpur while the suit in question was filed
before the Civil Court on situated locality in different not necessarily nearby locality.
It is also matter of record the worker’s union / creditor issued a demand notice to
the Corporate Debtor on 14th March, 2017 and prepared the present Application
for the purpose of filing on 25th March, 2017.
As the notice is received by Corporate Debtor only on 21st March it cannot be
presumed concluded that 10 clear days were given enabling the Corporate Debtor
for either making repayment of debts or to inform about the dispute in existence.
Hence, we find that present application on this ground alone is not complete and
found fit for admission.
It is also a matter of record that the present Operational Creditor has earlier been
impleaded as one of the Respondent’s before Hon’ble Delhi High Court in a
pending Writ Petition (C) No. 1110 of 2017 filed by another workers union named
as J.K. Jute Mills Mazdoor Ekta Union through its President /General Secretary
having office at Kalpi Road, Zarib Chowk, Kanpur wherein it has impleaded the
President / GS of Mazdoor Morcha darshan Purwa Baba Road, Kanpur as a
Respondent No. 20 among other respondents e.g. Union Of India, General
Manager, IDBI, BIFR and J.K. Jute Mills Company Ltd. through its director including
management official in the said writ petition. The relief sought for therein is to
challenge the Constitutional Validity of Section 252 of Insolvency & Bankruptcy
Code, 2016 read with Section 4(b) of SICA special Repeal Act contending such the
I & B Code does not provide for efficacious remedy to workmen for implementing
the direction passed by Supreme Court by 13.11. 2015 and 18.11. 2015 to approach
the NCLT once the BIFR reference stands abated.
It is also pleaded such in the Writ Petition that due to abetment of Proceedings
before BIFR, it rendered the Petitioner remedy less and the workers union cannot
initiate the proceeding before the NCLT for redressal of its grievance in the light of
the SICA Repeal act 203 and the present I & B Code. Therefore, it is only open for
Companies whose appeal / inquiry since abated to initiate a fresh proceeding
ALLAHABAD BENCH 699
before NCLT in accordance with Section 252 read with 8th Schedule of the code
within 180 days from commencement of code. As per the petitioner that section
does not make it compulsory’ to make a reference before NCLT and does not
provide for protection of the assets akin Section 22 (a) of SICA till such time
Company starts proceeding before NCLT.
According, the petitioner union on behalf of the workers of Corporate Debtor
Company has made such prayer to grant of ex-parte stay on the assets of the
Company and pass an order for appointment of receiver.
In view of the above, we feel that almost similar nature of reliefs has been sought
in the present petition as has been claimed before the Hon’ble Delhi High Court
in pending Writ Petition by seeking stay on the assets of and for appointment of
court Receiver in the corporate debtor company.
The above stated Writ Petition has been filed before Hon’ble Delhi High Court in
January, 2017. However, the present applicant being respondent No. 20 did not
disclose such facts about the pendency of the writ petition nor its stand taken in
support of or opposing to the writ petition or about its reply filed if any in the said
writ petition.
Since the eligibility’ and locus standi of a workers union as an operational creditor
/ financial creditor to file petition before the Adjudicating Authority under I & B
Code under consideration and sub-judice and before the Hon’ble Delhi High
Court wherein the present applicant union / Operational Creditor has also been
impleaded as respondents and similar nature of relief for appointment of a
receiver has been sought for. Hence, we are of the view that the present petition
under the I & B Code ought not to be entertained with a view to avoid multiplicity
of proceedings.
As per material available on record and pursuant to the direction issued by the
Hon’ble Supreme Court in the matter Ghanshyam Sarda Vs. Shiv Shankar Trading
Company and others, (2015) 1 SCC 298, the Hon’ble Supreme Court pleased to
direct to the BIFR (Paras 37 & 38 of the Judgment) to complete such exercise
within 2 months from the date of receipt of the order to determine the issue
whether the net worth of the corporate debtor turned positive or not and in case
the BIFR is satisfied that company has turned positive then it shall deregister the
reference of the company. Upon such deregistration the company will come out
of the supervisor}’ jurisdiction of the BIFR . In case it is not satisfied then it shall
consider the scheme for revival of the sick company.
However, as per record such enquiry could not be completed by the BIFR till the
present code came into effect and thereafter all the proceedings pending before
it stood abated.
Notwithstanding, the above, as per Section 252 read with 8th Schedule of the
I & B Code a liberty has been granted to a Corporate Debtor to make a reference
within 180 days from the date of I & B Code came into effect to this tribunal. For
consideration of DRS scheme / pending reference which could not be finalized.
Therefore, in the light of the above mentioned decision of the Hon’ble Apex Court
and read with the provision under Section 252 and 8th Schedule of the Code, the
corporate debtor is legally expected not to create third party interest over the
assets of the Company till such statutory period for filing reference is over.
Thereafter it would be subject to outcome of / order passed by a competent court
of Law / Statuary Labour Authority, if union or worker’s approach to it by filing suit
/ claim for recover}- of their labour dues or / and suit / proceedings filed against
them before a competent court of law.
However, our above stated observation is subject to final decision / interim
direction / order passed by the Hon’ble Allahabad High Court in pending writ
petition No. 7208 (M/S) of 2014 and in another Writ Petition No. 1110 of 2017
pending before Hon’ble Delhi High Court or by a Competent Court of Law as the
case may be.
Our above stated observation shall not meant to come in the way to implement
an order / direction issued by a Competent Court / Statutory Authority, Labour
Forum.
Hence the present petition is not maintainable and not found fit for admission
under Section 9 of the 1 & B Code. Hence, the application is hereby rejected.
However, no order as to costs.
H.P. CHATURVEDI
Member (Judiciail)
Dated : 28.04.2017
BENGALURU BENCH 701
BENGALURU BENCH
BENGALURU BENCH 703

BENGALURU BENCH
CP (IB) No.17/2017
DATED MONDAY, THE 17th DAY OF APRIL, 2017
PRESENT: SHRI RATAKONDA MURALI, MEMBER JUDICIAL
& SHRI ASHOK KUMAR MISHRA, MEMBER TECHNICAL
IN THE MATTER OF CORPORATE INSOLVENCY RESOLUTION PROCESS UNDER RULE
6 OF THE INSOLVENCY AND BANKRUPTCY RULES, 2016
AND
IN THE MATTER OF
M/s. FORTUNE PLASTECH
M/s. Fortune Plastech,
Sy. No.27, RMS Colony, Seegehalli Main Road,
Bhattarahalli, Virgonagar Post,
Bangalore - 560 049
....Petitioner
AND
M/s. Avni Energy Solutions Private Limited
Andhra Pradesh Industrial Infrastructure Corporation,
Industrial Area Locality, Plot No.B23,
Tirupati, Cuddapah, AP 517 520
....Respondent
COUNSEL PRESENT:
Shri S. Narendra Kumar, Advocate, No.213, First Stage, 7th Cross, Indiranagar,
Bangalore – 560 008.
ORDER
CP (IB) No.17/BB/2017, was filed before this Tribunal by the Petitioner Company
under section 9 of the Insolvency and Bankruptcy Code 2016 read with Rule 6 of
the Insolvency and Bankruptcy Rules, 2016, for initiation for Corporate Insolvency
against the respondents.
Briefly, the facts of the case are that the petitioner company is engaged in
manufacture and supply of plastic moulded components to various customers
703
and the respondent is one such debtor. The petitioner company had supplied/
sold materials/products under the Central sales Tax Act, 1956 at concessional
sales tax rate of 2% with the condition that the respondent should provide “C”
Form to the petitioner. Since the respondent has not provided the “C” Form and the
tax liability towards supplies of goods/products to the respondent has come up
to Rs.20,49,105/- and as all efforts made by the petitioner company to serve
notices, letters, etc. to the respondent failed, left with no option other than
approaching this Tribunal for initiation of corporate insolvency proceedings, the
petitioner has filed this petition.
We noticed that the respondent company is registered at Tirupati in Andhra Pradesh
and the jurisdiction for initiation of insolvency proceedings lies with NCLT,
Hyderabad, and asked the counsel for the petitioner whether this Tribunal has
jurisdiction to take up this case the learned counsel submitted that he would
withdraw the petition with leave to file the same before NCLT, Hyderabad, for the
same cause of action.
Today, the learned counsel for petitioner filed a memo for withdrawal of the
petition with liberty to file the same before NCLT. Hyderabad, for the same.
Accordingly, we permit the petitioner Company to withdraw the petition and file a
fresh petition before the National Company Law Tribunal, Hyderabad on the
In the result, CP (IB) No.17(BB)/2017 is dismissed as withdrawn with liberty to the
petitioner to file petition before the NCLT, Hyderabad on the same cause of action.
(RATAKONDA MURALI)
MEMBER JUDICIAL
(ASHOK KUMAR MISHRA)
MEMBER TECHNICAL
BENGALURU BENCH 703

BENGALURU BENCH
CP (IB) No.17/2017
DATED MONDAY, THE 17th DAY OF APRIL, 2017
PRESENT: SHRI RATAKONDA MURALI, MEMBER JUDICIAL
& SHRI ASHOK KUMAR MISHRA, MEMBER TECHNICAL
IN THE MATTER OF CORPORATE INSOLVENCY RESOLUTION PROCESS UNDER RULE
6 OF THE INSOLVENCY AND BANKRUPTCY RULES, 2016
AND
IN THE MATTER OF
M/s. FORTUNE PLASTECH
M/s. Fortune Plastech,
Sy. No.27, RMS Colony, Seegehalli Main Road,
Bhattarahalli, Virgonagar Post,
Bangalore - 560 049
....Petitioner
AND
M/s. Avni Energy Solutions Private Limited
Andhra Pradesh Industrial Infrastructure Corporation,
Industrial Area Locality, Plot No.B23,
Tirupati, Cuddapah, AP 517 520
....Respondent
COUNSEL PRESENT:
Shri S. Narendra Kumar, Advocate, No.213, First Stage, 7th Cross, Indiranagar,
Bangalore – 560 008.
ORDER
CP (IB) No.17/BB/2017, was filed before this Tribunal by the Petitioner Company
under section 9 of the Insolvency and Bankruptcy Code 2016 read with Rule 6 of
the Insolvency and Bankruptcy Rules, 2016, for initiation for Corporate Insolvency
against the respondents.
Briefly, the facts of the case are that the petitioner company is engaged in
manufacture and supply of plastic moulded components to various customers
703
and the respondent is one such debtor. The petitioner company had supplied/
sold materials/products under the Central sales Tax Act, 1956 at concessional
sales tax rate of 2% with the condition that the respondent should provide “C”
Form to the petitioner. Since the respondent has not provided the “C” Form and the
tax liability towards supplies of goods/products to the respondent has come up
to Rs.20,49,105/- and as all efforts made by the petitioner company to serve
notices, letters, etc. to the respondent failed, left with no option other than
approaching this Tribunal for initiation of corporate insolvency proceedings, the
petitioner has filed this petition.
We noticed that the respondent company is registered at Tirupati in Andhra Pradesh
and the jurisdiction for initiation of insolvency proceedings lies with NCLT,
Hyderabad, and asked the counsel for the petitioner whether this Tribunal has
jurisdiction to take up this case the learned counsel submitted that he would
withdraw the petition with leave to file the same before NCLT, Hyderabad, for the
Today, the learned counsel for petitioner filed a memo for withdrawal of the
petition with liberty to file the same before NCLT. Hyderabad, for the same.
Accordingly, we permit the petitioner Company to withdraw the petition and file a
fresh petition before the National Company Law Tribunal, Hyderabad on the
In the result, CP (IB) No.17(BB)/2017 is dismissed as withdrawn with liberty to the
petitioner to file petition before the NCLT, Hyderabad on the same cause of action.
(RATAKONDA MURALI)
MEMBER JUDICIAL
(ASHOK KUMAR MISHRA)
MEMBER TECHNICAL
CHANDIGARH BENCH

CHANDIGARH BENCH
CHANDIGARH
CP No.8/2016
Now treated as Petition under section 9 of Insolvency and
Bankruptcy Code, 2016 RT No.9/Chd/Pb/2017
in the matter of:
M/s Wanbury Ltd.
....Petitioner/Applicant
Versus
M/s Panacea Biotech Ltd.
....Respondent
Present : Mr. C.S. Chauhan, Advocate for Shri A.P. Sandhu, Advocate for Petitioner.
Mr. Atul V. Sood, Advocate for the Respondent.
Coram : Hon’ble Justice R.P. Nagrath, Member (Judicial)
ORDER
Company petition was filed in the Hon’ble High Court of Punjab and Haryana for
winding up of the Respondent Company for its inability to pay the debt’ in terms
of section 433 (e) of the Companies Act, 1956 (to be referred hereinafter as the
Act), after having served the Respondent Company with a notice of demand in
terms of section 434 of the Act. Annexure P-7 is the notice dated 17,12.2014,
calling upon the Corporate Debtor-Respondent to pay the outstanding amount of
Rs.49,45,331.86 being the principal sum, and Rs.10,52,106.78 towards interest @
24% p.a. upto 30.11.2014. It is also admitted by the petitioner that certain payments
were made thereafter and the respondent was called upon to pay the remaining
outstanding amount. As per the notice dated 25.05.2015 (Annexure P-9) the
outstanding amount of principal for the goods delivered was Rs.34,05,548.86,
apart from the interest @ 24% p.a. The Respondent, vide its reply dated 14.07.2015
(Annexure P-11) had undertaken to pay the balance amount of Rs.34,85,549 in 12
installment as detailed in the reply. Therefore, from the aforesaid notice to the
respondent, it was an admitted fact that the respondent was to pay an amount of
Rs.34,85,548.86 as claimed by petitioner in the notice (Annexure P-9).
2. The instant petition was received by transfer to the Tribunal in terms of Rule 5
of the Companies (Transfer of Pending Proceedings) Rules, 2016 (for brevity the
‘Rules ) as notified on 07.12.2016. These Rules came into force with effect from
15.12.2016.
Sub-rule 1 of rule 5 of the Rules reads as under -
“(1) All petitions relating to winding up under clause (e) of section 433 of the Act
on the ground of inability to pay its debts pending before a High Court, and
where the petition has not been served on the respondent as required under
rule 26 of the Companies (Court) Rules, 1959 shall be transferred to the Bench
of the Tribunal established under sub-section (4) of section 419 of the Act;
exercising territorial jurisdiction and such petitions shaft be treated as
applications under sections 7, 8 and 9 of the Code, as the case may be, and
dealt with in accordance with Part If of the Code.
Provided that the petitioner shall submit all information, other than information
forming part of the records transferred in accordance with Rule 7, required for
admission of the petition under sections 7, 8 and 9 of the code, as the case
may be, including details of the proposed insolvency professional to the Tribunal
within sixty days from date of this notification, failing which the petition shall
abate. “
As per the amendment made in this Rule vide notification dated 28.02.2017, the
period of furnishing all the required information has been extended to six months.
3. Accordingly, the petition received by transfer from the High Court is to be
treated as an application filed under section 8 and 9 of the Insolvency and
Bankruptcy Code, 2016 (for short to be referred hereinafter as the Code). The
petitioner is admittedly an operational creditor’ and entitled to make an application
in terms of section 9 of the code. Under Rule 6 (1) of the Insolvency and Bankruptcy
(Application to Adjudicating Authority) Rules, 2016 (for brevity to be referred
hereinafter as ‘AAA Rules’) an ‘operational creditor’is to make an application for
initiating corporate insolvency resolution process against the ‘corporate debtor’
in form 5, accompanied with documents and records required therein and as
specified in the Insolvency and Bankruptcy Board of India (Insolvency Resolution
Process for Corporate Persons) Regulations, 2016. Sub-rule (2) of Rule 6 further
says that the applicant under sub-rule (1) shall despatch forthwith, a copy of the
application filed with the Adjudicating Authority by registered post or speed post
to the registered office of the ‘corporate debtor’.
4. The petitioner/applicant has filed affidavit of Mr. Ravi Kant Alhat, its authorised
signatory in form No. 5, giving all the particulars required in the said form. It Is
stated that the outstanding principal amount in default as on 16.03.2017 Is
Rs.20,85,273.03 with interest outstanding at Rs.21,36,518.70. The statement of

accounts is attached as Annexure A-2 is in CD form and working for computation
of amount and the difference of default amount in the tabulated form is attached
as Annexure A-3.
5. The matter was listed for the first time on filing of the aforesaid application in
form No.5 of AAA Rules on 03,04,2017. Having heard the teamed counsel for
petitioner, the applicant/petitioner was required to remove the following defects:
i) To file resolution of the applicant company/operational creditor that Mr.
Ravi Kant Alhat son of Keshav Alhat has been authorised by the company
to accept the service of the process on its behalf.
ii) To file affidavit of authorised representative to the effect that there is no
repayment of the unpaid operational debt end that no notice of any dispute
has been received by the applicant company/operational creditor. The
affidavit would further state that no notice of the dispute has been given by
the Corporate Debtor relating to a dispute of the unpaid operational debt.
6. The applicant petitioner removed the aforesaid defects by filing an affidavit
dated 05.04.2017 and the matter was listed soon after the vacation period of the
Tribunal from 08,4.2017 to 16.04.2017.
7. The learned counsel for petitioner recorded his statement on 17.04.2017 that
the petitioner-operational creditor has received Cheque No.706456 dated
03.04.2017 drawn on Axis Bank Ltd. for an amount of Rs.8,82,074/-, but the same
has not been encashed so far as ‘corporate debtor’ wanted the cheque to be
accepted towards full and final settlement of the outstanding dues. Learned
counsel for petitioner further stated that the balance amount towards the principal
was still Rs.2,03,199/-, apart from the claim of interest to the tune of Rs.21,36,518.70.
It was also clarified in statement by the learned counsel that the petitioner had
earlier received cheque of aforesaid amount of Rs.2,03,199/-, but the same was
not got encashed by the petitioner. Learned counsel for respondent also recorded
his statement on 17.04.2017 that the respondent would be bringing the cheque
for the balance amount by today i.e. 18.04.2017 and that is how the matter was
adjourned for hearing for today.
8. The learned counsel for respondent has handed over the original cheque
No.706896 dated 17.04.2017 for Rs.2,03,199/- in favour of the petitioner, drawn
on Axis Bank Ltd. and the petitioner’s counsel made the statement on having
received the aforesaid cheque that the same was being accepted without
prejudice to the rights of the petitioner to press for claim of interest over the
outstanding amount. Copy of the cheque be made part of the record.
9. In view of the above the only limited question for determining would be whether
the claim of interest fails within the term ‘debt’ which the respondent is liable to
pay, failing which the petitioner is entitled to an order of admission in terms of
section 9 of the Code and for recommending the appointment of the Insolvency
Resolution Professional. It may be pointed out that the petitioner has not named
the IRP to bo appointed in case of admission, but has made a request for referring
the matter to the Insolvency and Bankruptcy Board of India, for such an
appointment in terms of section 16(3) of the Code. I have heard learned counsels
of parties and given my thoughtful consideration to the controversy involved in
the case. It is not disputed by the learned counsel for petitioner that the respondent
has issued cheques in respect of entire principal sum due.
11. The teamed counsel mainly relied upon the judgement of Hon’ble Supreme
Court in Vijay Industries Vs. NATL Technologies Limited (2009) 3 Supreme
Court Cases 527 in support of his contention. The question before the Hon’ble
Supreme Court was whether interest payable on the sum due would be a debt so
as to attract the provisions of sections 433 and 434 of the Companies Act, 1956,
The Hon’ble Supreme Court held as under: -
“34. Section 433 of the Companies Act does not state that the debt must be
precisely a definite sum. It has not been disputed before us that failure to pay
the agreed interest or the statutory interest would come within the purview of
the word ‘debt’. It is one thing to say that the amount of debt is not definite or
ascertainable because of the bona fide dispute raised thereabout or there
exists a dispute as regards quantity or quality of supply or such other defences
which are available to the purchaser; but it is another thing to say that although
the dues as regards the principal amount resulting from the quantity or quality
of supply of the goods stands admitted but a question is raised as to whether
any agreement had been entered into for payment of interest or whether the
rate of interest would be applicable or not in the latter case, in our opinion, the
application for winding up cannot be dismissed “
12. The facts of the case before the Hon’ble Supreme Court were that the invoices
of the credit bills attached with each of the supply contained a clause relating to
payment of interest in the following terms - ‘amount must he paid within 7 days
or you are liable to pay 2% interest per month.’ It was not in dispute that on the
foot of each credit bill, the officer of the respondent company has put his signatures
as a token of acceptance.
13. It was further found that the respondent company had adjusted the amount
paid first towards the interest at a stipulated rate and the balance against the
principal amount The Hon’ble Supreme Court, on the facts of the case, further
held as under: -
“43. The findings of the High Court, with respect, are not correct for more than
one reason; firstly; because the Division Bench did not hold that the invoices
were not proved by cogent evidence; secondly, question of leading evidence
would arise only after the company petition is admitted and, thirdly, issuance
of invoices and signature of the respondent thereon is not disputed “
44. The judgment of the Division Bench also contains a legal flaw insofar as it
failed to take into consideration that the appellant had in fact issued three
notices being dated 6-1.2003, 8-9-2003 and legal notice dated 23-12-2003
specifically mentioning that the payments had been adjusted towards interest
first and balance, if any, shall be adjusted towards the principal Thus, a prima
facie case was made out. “
14. The Hon’ble Supreme Court set aside the judgment of High Court. Further,
instead of remitting the case back to the High Court, disposed of the matter in
exercise of its jurisdiction under Article 142 of the Constitution of India, directing
the respondent company to pay simple interest on the admitted sum @ 12% p.a.
on the balance amount instead of 24% p.a. within 8 weeks from the date the
amount became due till it was paid, failing which the consequences provided
under the Law were to ensue
15. I am, however, of the view that the issue here is to be determined, in view of
the provisions of the ‘Coder which has come into force w.e.f. 01.12.2016. Learned
counsel for parties have not disputed that the term “debt” or operational creditor
were not defined in the 1956 Act. This term is now defined in section 3(11) of the
‘Code’ as meaning ‘a liability or obligation in respect of a claim which is due from
any person and includes a financial debt and operational debt’. We are presently
concerned with the definition of term “operational debt” as defined in section
5(21) of the ‘Code’ Section 5 (20) defines “operational creditor as meaning a
person to whom an operational debt is owed and includes any person to whom
such debt has been legally assigned or transferred”. Section 5 (21) of the ‘Code’
says that ‘ operational debt” means ‘a claim in respect of the provisions of goods
and services including employment or a debt in respect of the repayment of the
dues arising under any law for the time being in force and payable to the Central
Government or State Government or any local authority.
16. There is a marked difference between the definition of the term financial debt’
and the ‘operational debt’ Under section 5 (8) the term ‘financial debt’ means a
debt along with interest, if any, which is disbursed against the consideration for the
time value of money and that is an inclusive definition. In the definition of the term
‘operational debt’ under section 5 (21) the word interest’ has not been mentioned.
17. Anyhow, to resolve the issue, it would be relevant to refer to the documents on
record and the agreement, if any, between the parties. In the present case,
admittedly, the amount being paid by the applicant / petitioner from time to time
was being regularly adjusted towards the principal only and the interest has
accumulated for the amount claimed by the petitioner Even the invoices filed
along with the winding up petition, do not contain any clause of payment of
interest. It is only now with the present application that ‘operational creditor” has
attached Tax Invoices’ [Annexure A-4 (colly)] containing the clause of payment of
24% p.a. towards the interest in case the payment is not made within 3 days.
These Tax Invoices were not part of the petition before the Hon’ble High Court. It
is not the version of the petitioner that the Credit Invoices or Tax Invoices bear the
signatures of the representative of the respondent Company. The term of ‘interest’
is thus only a unilateral act of the petitioner / applicant
18. It would be pertinent to refer to the reply of respondent dated 23.03.2015
(Annexure R-8), attached with the Company Petition filed in the High Court. In
this reply, the respondent has explained the reasons for the delayed payment.
It was stated that the steps were being taken for restoration of World Health
Organization (WHO) pre-qualification of the respondent Company’s pentavalent
vaccine (“Easyfive-TT”) as in the absence of the same, the supplies of pentavalent
vaccine (“Easyfive-TT”) to UNICEF and other agencies could not be made, thereby
adversely affecting the respondent Company It was also stated that in view of
the above, the petitioner / applicant company had assured full cooperation to
the respondent and for that reason, no provision for payment of interest’ in case
of delay in payment was agreed in any of the purchase order in question. The
petitioner has not placed on record the purchase orders issued by the respondent
with the applicant company, in order to controvert the above stand of the
respondent.
19. The learned counsel far petitioner, however, vehemently contented that the
interest can be determined by the Tribunal at the reasonable rate, as the petitioner
is entitled to interest in accordance with section 61 of the Sales of Goods Act and
section 3 of the Interest Act. I am of the considered view that it is never the
intention of legislature under the “Code” that the Tribunal should determine the
rate of interest and grant time to the company to pay the amount as per the
directions. It is clearly intended that an application filed under section 9 of the Act
is either to be admitted or rejected within a period of 14 days of the receipt of the
application. There is no scope of passing an interim order like the one suggested
by the learned counsel for the applicant / petitioner.
20. In view of the aforesaid discussion, I hold that the entire amount of ‘debt’ as
per the intention of the legislature under the “Code” having been paid by way of
cheques, the instant petition is rejected. However, in case the cheques issued by
the respondent are dishonoured, the petitioner would be at liberty to file a fresh
petition, if so advised or take other appropriate steps in accordance with the Law.
Certified copy of the order be sent to both the parties by speed post.
Member (Judicial)
Dated : 18.04. 2017

CHANDIGARH BENCH
CHANDIGARH
CP (IB) No.11/Chd/Pb/2017
CA No.42/2017
SIDBI
....Petitioner/Applicant
Versus
Nexgen Laminators Pvt. Ltd.
....Respondent/Corporate Debtors
Present : Mr. Gaurav Goel, Advocate and Mr. Keshvan Iyengar, Authorised
Representative of petitioner.
Ms. Eshna Kumar, Advocate and Mr. Rajesh Singla, Authorised Representative for
Respondent.
The Authorised Representative of the petitioner has recorded his statement
withdrawing the instant petition with liberty to pursue the petition for winding up
of the company already pending before the Hon’ble High Court of Punjab and
Haryana.
Dismissed as withdrawn with liberty aforesaid.
Member (Judicial)
Dated : 17.04.2017
CHENNAI BENCH 715
CHENNAI BENCH
CHENNAI BENCH 717

(DIVISIONAL BENCH), CHENNAI
ATTENDANCE CUM ORDER SHEET OF THE HEARING OF CHENNAI BENCH, CHENNAI
NATIONAL COMPANY LAW TRIBUNAL, HELD ON 26/04/2017 AT 10.30 AM
PRESENT: SHRI K. ANANTHA PADMANABHA SWAMY, MEMBER-JUDICIAL SHRI
Ch. MOHD SHARIEF TARIQ, MEMBER-JUDICIAL
TCP/6(IB)/CB/201 7
KEI INDUSTRIES LIMITED
Vs.
ETA ENGINEERING PVT LTD
UNDER SECTION : Rule 6 of IBC Rules r/w Section (13) of Insolvency and Bankruptcy
Code, 2016
1. Ajay Kohli Petitioner
2. Kalpana Gupta Respondent
Order
Shri Ajay Kohli, counsel for petitioner present. Ms Kalpana Gupta, counsel for
respondents present. Counsel for petitioner filed application No.TCP/6(IB)/CB/
2017 in the matter of KEI Industries Limited vs M/s ETA Engineering Pvt Ltd. There
has been a settlement between the parties with regard to which they have drawn
up the terms and conditions in black and white, termed as Memo of Settlement
dated 10.4.2017. There are three conditions which pertain to the payments and it
has been submitted that the last payment of Rs.1,31,20,467.00 has been made
vide DD No.020038. The demand draft has been handed over to the petitioner
by the respondents in the open court. In view of the above, the petitioner prays to
withdraw the petition. The prayer is allowed. The petition is dismissed as
withdrawn.
(K. Anantha Padmanabha Swamy)
Member (Judicial)
Ch. Md. Sharief Tariq
Member (Judicial)

(DIVISIONAL BENCH), CHENNAI
ATTENDANCE CUM ORDER SHEET OF THE HEARING OF CHENNAI BENCH, CHENNAI
NATIONAL COMPANY LAW TRIBUNAL, HELD ON 21/04/2017 AT 10.30 AM
PRESENT: SHRI K. ANANTHA PADMANABHA SWAMY, MEMBER
(JUDICIAL) & SHRI Ch. MOHD SHARIEF TARIQ, MEMBER (JUDICIAL)
CA/2(IB)/CB/2017
CAPEGEMINI TECHNOLOGY SERVICES INDIA LTD
Vs.
REAL VALUE PROMOTERS PRIVATE LIMITED
Under Section : Rule 6 of IBC Rules r/w Section (13) of Insolvency and Bankruptcy
Code, 2016
1. R Vidhyashankar Advocate Respondent
2. T.K. Bhaskar Advocate Applicant
Vikram Jain
ORDER
This matter has been mentioned by the Counsel for the petitioner in the morning
session. We direct the Registry to produce the file. It is on record that the matter has
been heard on 13th April 2017 and the order was reserved. The order has not been
released. Therefore, we take up the matter for hearing. During the course of
hearing, the parties, i.e. the Operational Creditor and the Corporate Debtor have
filed the Memo of Compromise and the same is taken on record. The detail of the
compromise are contained therein. As per the compromise, the Corporate Debtor
today has paid Rs.20,00,000/- (Rupees Twenty Lakhs only) by way of DD and for the
rest of the outstanding amount, the installments as agreed, will be given starting from
15th May onwards on 15th of every month, in 4 equal monthly installments. Subject to
the terms of compromise, the parties did agree that, in case of default, the Operational
Creditor will have the right to continue with the application filed u/s 9 for seeking
appropriate orders against the Corporate Debtor. However, looking into the terms
arrived at between the parties, we are inclined to take the Memo of Compromise on
record and give liberty to the Operational Creditor to mention the matter before this
bench, in case of default/non-compliance with the terms of the compromise.
CH. MD. SHARIEF TARIQ MEMBER (JUDICIAL)
K. ANANTHA PADMANABHA SWAMY, MEMBER (JUDICIAL)
GUWAHATI BENCH 719
GUWAHATI BENCH
GUWAHATI BENCH 721
ATTENDANCE-CUM-ORDER SHEET OF HEARING

NCLT, SPECIAL BENCH AT GUWAHATI
SB Case No.01/IBC/GB/2017
(C.P. No.37 of 2017)
ICICI Bank Ltd.
...Petitioner
-Versus-
Palogix Infrastructure Pvt. Ltd. & Ors.
... Respondents Present:
Present : Hon’ble Mr. Justice P K Saikia, Member(J)
Mr. R. Banerjee, Sr. Advocate
Mr. V. Jhunjhunwala, Advocate
... for the petitioners
Ms. M. Bhuteria, Advocate
Mr R. Gupta, Advocate
Ms S. Mukherjee, Advocate
... for the Respondents
Name of the Company ICICI Bank Ltd.

Versus
Palogix Infrastructure Pvt. Ltd. & Ors.
Under Section 7
SI. Name & Designation of Appearing on Signature with

No. Authorized Representative behalf of date
(IN CAPITAL LETTERS)
ORDER
Date of order: 30.03.2017
This Proceeding has been necessitated in view of two divergent orders, passed
by the learned Members of NCLT, Kolkata Bench in C.P.No.37/2017. While Mr V.P.
Singh, learned Member (J) directed that application be returned to the applicant
721
for rectifying the defects notified in the order, Mr S. Vijaraghavan, learned Member
(Technical) was of the opinion that the application was duly filed and, as such,
same is required to be admitted.
2. Facts leading to filing of C.P. No.37/2017 may be narrated in a narrow campus
as follows :
3. ICICI Bank, a bank incorporated under the laws of India with its registered
office at ICICI Bank Tower, Near Chakli Circle, Old Padra Road, Vadodara 390 007,
Gujarat, India and a Regional Office at ICICI Bank House, 3A Gurusaday Road,
Kolkata, had filed an application under Section 7 of the Insolvency and Bankruptcy
Code, 2016 (for short, Code of 2016) read with Rule 4 of the Insolvency and
Bankruptcy (Application to Adjudication Authority) Rules, 2016 ( in short, Rules of
2016) against Palogix Infrastructure Private Ltd., a company incorporated under
the laws of India with its registered office at 86 B/2, Topsia Road, Gajraj Chambers,
Kolkata.
4. In the application, aforesaid ICICI Bank, (hereinafter referred to as financial
creditor), has alleged that it had sanctioned a term loan to the tune of Rs.111
crores to M/s Palogix Infrastructure Private Ltd., (hereinafter referred to as the
corporate debtor). Out of the aforesaid loan amount, an amount to the tune of
Rs.65,60,00,000/- was disbursed to the Corporate Debtor. The dates of
disbursement of loan, given in installments, has been described in detail in the
application. According to the financial creditor, on 31.12.2016, an amount to the
tune of Rs.32,21,97,699.06 remains as outstanding debt since the Corporate
Debtor defaulted in repayment of the loan in accordance with schedule fixed
earlier.
5. In the application, it has been stated that the first default occurred on 26.06.2016
and thereafter, on 30.06.2016. In such circumstances, financial creditor, through
its attorney, has filed an application under Section 7 of the Code of 2016 read with
Rule 4 of the Rules, 2016 seeking initiation of resolution process as contemplated
in the Code of 2016 which was registered as CP No. 37/2017.
6. On the same day, a copy of the application was sent for delivery to the Corporate
Debtor as required under Rule 4 of the Rules, 2016. On hearing both the parties,
the learned Members, NCLT, Kolkata Bench rendered orders expressing divergent
views on the qualification of attorney holder to initiate proceeding under Section
7 of the Code of 2016.
7. I have perused the orders aforesaid and found that without any notice having
been served on it, the corporate debtor entered appearance and objected the
application on the ground that the Attorney who had filed the application under
Section 7 did not have the requisite power to initiate a resolution process under
GUWAHATI BENCH 723
Section 7 of the Code of 2016. In that connection, it has been stated that the power
of attorney in question did not at all authorise the attorney holder Sri Srinjoy
Bhattacharjee to initiate aforesaid proceeding.
8. In support of such contention, it has been pointed out that the Code of 2016
was brought into existence in 2016 whereas the Power of Attorney was executed
on 20.10.2014. The Code of 2016, it is argued, contemplated and also put in place
a whole lot of new ideas and conceptions vis-a-vis the recovery of debt etc. due
from various debtors which include the corporate debtors as well. What is however,
important to note is that it has also prescribed very special procedures for
realisation of such debts etc. which were mostly unknown to the Statutes holding
the field till the time of coming into operation of Code of 2016.
9. In such a complex scenario, on the date of executing the power of attorney in
favour of Sri Srinjoy Bhattacharjee, ICICI Bank (herein after also referred as to
donor) could not have contemplated even remotely about authorizing Sri Srinjoy
Bhattacharjee (hereinafter referred to as donee), to initiate corporate insolvency
resolution process under the section 7 of Code of 2016, and that too, in the
capacity of the financial creditor as contemplated section 5(7) of Code of 2016.
10. In support of such contention the decision in Shantilal Khuslaldas and Bors
Pvt. Ltd. Vs. Smt. Chandanbala Sughir Shah and Another -reported in (1993) 77
Comp Cas 253 as well as the decision in Coromandel International Ltd. v. Chemcel
Biotech Ltd., reported in (2011) 166 Comp Cas 676 were relied on. In both those
cases, it was held that it is a settled principle of law that the power of attorney
needs to be interpreted strictly, reason behind such principle being that the powers
given are not abused by agent or the actions are restricted within an only to the
extent the power is indicated or given.
11. In the aforesaid cases, it was held that when the donor of a power of attorney
had authorised the donee to initiate suits, the donee, being armed with such a
power of attorney, cannot initiate a winding up proceeding since a winding up
proceeding under the company law can never be equated with a suit. The relevant
part of Coromandel International Ltd (supra) is reproduced below:
“A suit for recovery of money is essentially a suit between the parties where no
third party can seek any indulgence or impleadment. The proceedings under
the Companies Act for winding up are entirely different, a special remedy
provided for and the idea is not to restrict the proceedings to the parties alone
and its range is widened and all steps taken in winding up proceedings are in
public interest. Sometimes the relief for winding up is denied when it is against
public interest”.
The settled principle is that the power of attorney must be strictly construed, the
rationale behind the principle being that the powers given are not abused by
agent or the actions are restricted within an only to the extent the power is
indicated or given”.
12. Refuting such contentions, learned counsel for the financial creditor argued
that the power of attorney in question had very specifically empowered Sri Srinjoy
Bhattacharjeet to do varieties of acts which clearly included the power to initiate
a resolution process under Section 7 of the Code of 2016 as well. The fact that
under the power in question, the attorney holder was authorised to institute suit/
winding up proceeding/ other proceeding even before a whole lot of authorities
including High Court/CLB / NCLT makes such a conclusion inescapably inevitable
13. According to the learned counsel for the financial creditor, the decisions,
relied on by the counsel for the corporate debtor, have no application to the
proceeding in hand since the facts and circumstances in the cases, relied on,
and facts and circumstances in the case, before the Tribunal, are fundamentally
different in as much as in the case in hand, the power of attorney had clearly
authorised the Attorney to institute all kinds of suits or proceedings including a
winding up proceeding/insolvency proceeding/ bankruptcy proceeding , and
that too, even before the NCLT. However, such facts are conspicuously lacking in
the cases, referred to from the side of the corporate debtor.
14. On hearing the learned counsel for the parties, the learned Members rendered,
as stated above, two divergent opinions on the competence of the attorney holder
to initiate the proceeding under section 7 of the Code. While the learned Member
(Technical) did not find any fault in attorney holder’s initiating a proceeding under
section 7 of the Code, the learned Member (Judicial) upheld the objection, raised,
holding that the Attorney holder did not have the required competence to initiate
the proceeding under consideration.
15. For ready reference, relevant parts of the orders, rendered by learned Member
(J) and Learned Member (T) are reproduced below:
Order by: (Member) (J)
“In this case, general power of attorney is in favour of Shri Srinjoy Bhattacharjee
which was given on 20.102014 to commence and institute any proceedings
before any Court of Law including National Company Law Tribunal, but this
power of attorney cannot be treated as specific power of attorney to initiate
Corporate Insolvency Resolution Process under the Insolvency & Bankruptcy
Code, 2016. The law laid down by the Hon’ble High Court is relating to the
winding up cases which were moved under the Companies Act, 1956 and the
provisions of IBC , 2016 are quite different. But in Corporate Insolvency
proceeding also, the lis is not only between the Financial Creditor and the
GUWAHATI BENCH 725
Corporate Debtor. Once the petition is admitted, the creditors, contributors,

shareholders, etc. seek redress in the proceedings and even oppose
proceedings. Upto this extent, insolvency proceedings are also like winding
up proceedings which not only restrict the proceedings to the parties alone
and its range is widened and all steps taken in insolvency proceedings are in
public interest. A power of attorney must be strictly construed the rationale
behind the principle being that the powers given are not abused by the agent
and its actions are restricted within and only to the extent the power is indicated
or given.
In the above circumstances, in my view, specific authorisation to initiate
Corporate Insolvency Resolution Process is needed. It also appears from the
application that the applicant has not filed any affidavit in support of the
application. Therefore, the applicant has also to submit affidavit in support of
the application. Notice be issued to the applicant petitioner to ratify the defect
in the application within seven days of receipt of such notice. List on dated 15/
2/17 for FO.”
Order by : Member (T)
I beg to differ from the Ld. Judicial Member in this respect proceedings made
under Section 7 of the Insolvency & Bankruptcy Code, 2016 does not necessarily
lead to liquidation of the Corporate Debtor. Under sub-section (1) of Section 20,
the Interim Resolution Professional shall make every endeavour to protect and
preserve the value of the property of the corporate debtor and manage the
operations of the corporate debtor as a going concern. It may lead to liquidation
or winding up, in case no viable Insolvency Resolution Plan could be evolved
in consultation with the Committee of Creditors. Moreover, in this case, the
applicant is a bank which necessarily deals with huge number of loan accounts.
The power of attorney mentioned above clearly mentions that the Legal
Manager is empowered to initiate proceedings under the NCLT which
automatically includes its role as an Adjudicating Authority under I.B.C. In case,
this is insistent upon in every petition under the IBC, involving a Financial
Creditor that the petition be filed on the basis of a specific power of attorney on
a Board’s Resolution, it will defeat the very purpose of the IBC Code; which is for
speedy resolution of insolvency cases.
The facts of the outstanding loan and the defaults have been established by
the petitioner as evidenced by the records. The Ld. Counsel for the Corporate
Debtor had not expressly denied these facts and as such the petition deserves
to be admitted.
In my view, the petition is to be admitted and the Interim Resolution Professional
(IRP) may be appointed as per section 16 of the Insolvency & Bankruptcy Code,
2016. The applicant may also proceed with the compliance of section 13 and
14 of the IBC pertaining to declaration of moratorium and public announcement.
The judgment of the Hon’ble High Courts referred to by Ld. Counsel for the
Corporate Debtor specifically deal with the winding up proceedings under the
Companies Act only”.
16. Following such divergence of opinions between the learned Members of
NCLT, Kolkata, the Hon’ble President, NCLT was pleased to constitute a special
Bench to decide the aforesaid point over which the learned Members of NCLT,
Kolkata were in disagreement. For ready reference, the relevant part of the letter
dated 20.02.2017 from Registrar NCLT, New Delhi addressed to the Hon’ble
Members is reproduced below:
“I am directed to convey that Hon’ble President is pleased to constitute following
Bench to decide the matter regarding passing of different orders in Company
Petition 37/2017 under section 7 of the Insolvency & Bankruptcy Code 2016 by
Shri Vijai Pratap Singh, Member (Judicial) and Shri S.Vijaraghavan, Member
(Technical) NCLT Kolkata.
NCLT. Special Bench at Guwahati.
Justice Shri P.K.Saikia. Member (Judicial)”
17. This is how the present proceeding cropped up before NCLT, Guwahati Bench.
18. The counsel for the parties, I find, reiterated the arguments which had they
advanced before the learned members of the NCLT, Kolkata Bench. Mr R. Banerjee,
learned Sr. Counsel for the financial creditor, has vehemently contended that the
power of attorney, under which one Shri Srinjoy Bhattacharjee was constituted as
attorney of ICICI Bank had given him unqualified and absolute power to do various
acts which obviously included the power to initiate corporate insolvency resolution
proceeding under section 7 of the Code of 2016 as well. A very careful reading of
the power of attorney in question makes it abundantly clear.
19. In that connection, it has been stated that the power of attorney is required to
be read as a whole in order to understand true intent, meaning and purport of
such power of attorney. In support of his contention, the learned counsel for
financial creditor has relied on the decision of Hon’ble Privy Council in the case of
Bank of Bengal vs. R. Chetty, reported in PC 1915 reported in 1915 PC 527.
20. In the aforesaid case, it was held that where an act purporting to be done
under the power of attorney is challenged as being in excess of the authority to
confer the power of attorney, it is necessary to show that on fair construction of
the whole instrument, the authority in question is to be found within the four
GUWAHATI BENCH 727
corners of the instruments either in express terms or by necessary implication.

The relevant part of the judgment is reproduced below:
“Applying to the power in the present case the canon of construction laid down
in Bryant, Powis and Bryant, Ld. V. La Banque du Peuple (1) viz.- “that where an
act purporting to be done under a power of attorney is challenged as being in
excess of the authority conferred by the power, it is necessary to show that on
a fair construction of the whole instrument the authority in question is to be
found within the four corners of the instrument, either in express terms or by
necessary implication, “ their Lordships consider that the authority to enter into
transactions of the nature in dispute is to be found in the document itself by
necessary implication from the nature of the business, with the general
management of which the agent was entrusted. Without such authority it would
hardly have been possible to carry on the business of a money-lender and
financier.
21. According to Mr. Banerjee a harmonious reading of various clauses in the
power of attorney, more particularly, clauses 3, 4 and 5, would undoubtedly
show that under the power of attorney in question, the financial creditor gave his
attorney full and complete authority to file any suit/ winding up proceeding, and,
more importantly, the “proceeding of any kind whatsoever”, and that too, before
any Court/Tribunal including the NCLT.
22. Referring to clause 9 of the power of attorney, it has also been submitted that
under the power, the donor thereof had also authorized the donee to initiate
insolvency/ bankruptcy proceeding even before the NCLT. Being so, when one
reads the power of attorney in question taking into account all the facts and
circumstances, specified therein in their proper perspective, there cannot be any
escape from the conclusion that Shri Srinjoy Bhattacharjee (donee) had required
competence or authority to initiate a proceeding even under the Section 7 of the
Code of 2016.
23. It is also the case of the financial creditor that there was no provision in the
Code of 2016 requiring the Tribunal to issue notice to the corporate debtor giving
the later an opportunity to object the initiation of a proceeding under section 7 of
the Code and as such, the corporate debtor has no right, whatsoever, to point out
any defect in the petition, so filed by financial creditor before the NCLT under
Section 7 of the Code aforesaid.
24. As stated above, such contentions were strenuously disputed by Mrs Manju
Bhutoria, the learned counsel appearing for the corporate debtor stating that the
argument advanced from the side of petitioner is structured entirely on surmises
and conjectures, and not, on law and logic. In that connection, it has been pointed
out that the Code of 2016 was brought into existence in 2016 whereas the power
of attorney, aforesaid was executed on 20.10.2014.

25. Learned counsel for the corporate debtor further submits that Code of 2016
contemplated a regime for recovery of debt etc. which is fundamentally different
from all the regimes which had been holding the field before coming into operation
of the Insolvency and Bankruptcy Code of 2016. Therefore, on the date of execution
of the power of attorney in favour of Shri Srinjoy Bhattacharjee, the donor could
not have contemplated, even distantly, about authorizing the donee to initiate
action under the Code of 2016. In support of such contention, the counsel for the
corporate debtor has relied on the decisions, which were already placed before
the learned members of NCLT, Kolkatta Bench
26. Replying to the contention that the corporate debtor has no right of hearing at
the stage of initiation of a process under section 7 of the Code, it has been
contended that since with the initiation of the proceeding under section 7 of the
Code, the corporate debtor stands to suffer a whole lot difficulties of enormous
size and nature, the process under section 7 of the Code cannot be initiated
without giving the corporate debtor an opportunity of hearing, more particularly,
to show that no debt, as contemplated in law, was not due from such debtor.
27. In support of such contention, my attention has been drawn to the decision of
the Apex Court in the case of Automotive Tyre Manufacturers Association vs.
Designated Authority & Ors., reported in (2011) 2 SCC 258. Both the sides have,
however, submitted their written synopsis of arguments as well.
28. Since both the parties heavily relied on the power of attorney and since the
power of attorney has been interpreted by the parties in their own way to advance
their respective case, in order to appreciate the rival submission, I find it necessary
to have a look at the relevant part of the Power of Attorney. For ready reference,
the relevant parts of the same which have huge bearing on the question before
this court are reproduced below:
“4. To appoint pleaders, advocates and solicitors to appear and act on behalf of
ICICI Bank in any Court of justice or Tribunal or Recovery Officer or before any
revenue and/or Income-tax, Gift-tax, Wealth-tax, Recovery, Refund, Appellate,
Assistant Commissioner, Income-tax, Tribunal, Company Law Board/ National
Company Law Tribunal and/or before other forums and/or other officer or
officers and to revoke such appointment and to substitute any others in their
place and stead.
5. To sign, verify and execute all vakalatnamas, plaints, recovery applications,
written statements, counter-claims, complaints, petitions, company petitions,
winding up petitions, appeals, reviews, applications, affidavits, power of attorney
and papers of every description that may be necessary to be signed, verified
GUWAHATI BENCH 729
and for the purpose of any suit, proceeding for recovery or for enforcement of
security or for preservation and protection of security, original application,
interim applications, miscellaneous application, intervener application,
notice of motion, action, appeals and proceedings of any kind whatsoever
in any court of Law and/or Tribunal and/or Recovery Officer, including but
not limited to High Court/National Company Law Tribunal/Company Law
Board, whether of original, appellate, testamentary or revisional jurisdiction,
established by lawful authority or before the Income-tax, Gift-tax, Wealth-
tax, Recovery, Refund, Appellate. Assistant Commissioner or Income-tax
Tribunal and to do all acts and appearances or applications to any such Court/
Tribunal or Courts and forums aforesaid in any suits, action, appeals or
proceedings and all information of complaints that it shall or may be had,
brought or commenced and to defend, answer or oppose the same or suffer
judgment or decrees to be had, given, taken or pronounced in any such suits,
action, appeals, proceedings, bills, information or complaints as the said
Attorney shall be advised or my think proper and to execute decrees/Recovery
Certificates or any other certificate/order for recovery of dues and also to bid at
auction sales or to authorize all agents or sub-agents to bid at auction sales
and purchase the property of the said auction sales, to make withdrawals of
decretal amounts or sale proceeds from any court/Tribunals or appoint
authorized agents or sub-agents to do the same.
6. To appear before all Civil, Criminal, revenue, judicial and quasi-judicial
officer or officers exercising administrative functions and before all local and
public or other bodies and authorities as the occasion may require.
7. To cause these presents to be registered in the books of any bank, company
or corporation whatsoever or in any public or government office or elsewhere
as occasion may require.
8. To concur in doing any of the acts and things hereinbefore mentioned in
conjunction with any other person or persons or parties interested in the
premises.
9. To attend meetings of creditors in insolvency or bankruptcy or winding
up matters of any borrower or debtor and to vote at such meetings and to
accept composition and to take such proceedings as the said Attorney
shall or may think proper.
10. To exercise all rights and privileges and perform all duties which now or
hereinafter may appertain to ICICI Bank as holder of debentures, shares or
securities or as otherwise interested in any company or corporation”.
29. However, before proceeding further, I find it necessary to have a look at the
decision, rendered by Hon’ble Madras High court in the case of P.M.Desappa

Nayanim Varu and Ors Vs Ramabhaktula Ramiah and ors where Hon’ble Madras
High court, amongst other things, had the occasion to consider the law relating to
interpretation of power of attorney. For ready reference the relevant part is
reproduced below: -
Para 3. The principle governing the construction of a power of attorney are
succinctly stated in Bowstead on Agency (sixth edition). The learned author
says as follows as Page 73. “Powers of attorney must be strictly pursued, and
are construed as giving only such authority as they confer expressly or by
necessary implication. The following are the most important rules of
construction:
1. The operative part of the deed is controlled by the recitals.
2. Where authority is given to do particular acts, followed by general words,
the general words are restricted to what is necessary for the proper
performance of the particular acts.
3. General words do not confer general powers, but are limited to the
purpose for which the authority is given, and are construed as enlarging
the special powers when necessary and only when necessary for that
purpose.
4. The deed must be construed so as to include all medium powers
necessary for its effective execution”.
30. Now, the question is “whether the power of attorney in question had ever
bestowed upon the attorney holder the necessary authority to initiate a proceeding
U/s 7 of the Code.” In order to reply such a query, one needs to take into
consideration several facts and circumstances which occurred soon before and
after the execution of power of attorney in question since all those facts and
circumstances have huge bearing on the outcome of the present proceeding.
31. In this connection, one may note here that when the power of attorney was
executed on 20.10 2014, the Companies Act 2013 has already been in operation.
One may also note here that the Companies Act 2013 has brought numerous
changes to the Act of 1956. Thus, the abolition of CLB and substitution of it by NCLT
is one of such important changes brought about by the Act, 2013.
32. It is also worth noting that under the Companies Act, 1956, the matters
pertaining to arbitration, compromise, arrangement and reconstruction and
winding up of the companies etc. were entrusted to High Court/District Court
whereas some other matters, such as, oppression and mismanagement etc.
were left to be decided exclusively by the CLB.
GUWAHATI BENCH 731
33. However, with the repeal of the Act of 1956, the matters, such as, arbitration,
compromise, arrangement and reconstruction and winding up of the companies,
which were earlier dealt with by the High Court/District Court, are entrusted to
NCLT for disposal in accordance with the procedures, prescribed therein or the
Rules, framed thereunder. Similarly, with enactment of Act of 2013 and on the
abolition of the CLB, the matters, triable by CLB, are also entrusted to NCLT for
disposal.
34. But then, in so far insolvency of corporate debtor or liquidation thereof as well
as insolvency and bankruptcy individual and partnership firm are concerned, the
situations have undergone sea change following the enactment of the Insolvency
and Bankruptcy Code, 2016. This is because of the fact that a complete new
regime in respect of insolvency /bankruptcy of corporate debtor, individual and
partnership firm has been put in place under the Code of 2016. More importantly,
such a regime establishes detailed procedures for realisation of purposes for
which such a system was brought into existence.
35. Equally importantly, the Code of 2016, amongst other things, constituted
different Adjudicating Authorities to deal with the matters incorporated therein.
Thus, for the adjudication of corporate insolvencies /liquidation etc., an
Adjudicating Authority is constituted. Similarly, for the adjudication corporate
insolvencies/bankruptcy of individual/partnership firm, another Adjudicating
Authority is also created.
36. Quite significantly, the Code of 2016 also prescribes detailed but separate
procedures for each of such Authorities for realisation of such conceptions/ objects
etc. which were, however, almost unknown to the old regime. A careful perusal
of various provisions in the aforesaid Code makes such a conclusion inevitable.
37. One may note here that though the procedures for adjudication of insolvency
and liquidation for corporate person etc., or the procedures for adjudication
corporate insolvencies/ bankruptcy of individual/ partnership firm under the Code
of 2016 have some resemblances to some of the procedures, prescribed for
winding up of the companies under the Companies Act, 1956, yet, in many other
respects, procedures, prescribed therefor, under the Code of 2016, are radically
different from the procedures, prescribed under the old Act.
38. Situations being such, in my considered opinion, the procedures for
adjudication of insolvency and liquidation for corporate person etc., or the
procedures for adjudication of corporate insolvency/bankruptcy of individual/
partnership firm under the Code of 2016 can never be equated with the proceeding
for winding up/ insolvency/liquidation of the companies under the Act of 1956. In
other words, the procedures vis-a-vis winding up/insolvency/liquidation of the
companies etc. under the Act of 1956 and the procedures for insolvency/liquidation
etc. under the Code of 2016 are not one and same.
39. One may note here that under the power of attorney in question, the author
there had bestowed various power on the attorney appointed thereunder which
included the power to initiate winding proceeding as well. But then, in view of our
foregoing discussion, its needs to be concluded conclusively that the power, so
given to the attorney under the instrument above, can never be stretched to
embrace the power to initiate a corporate insolvency resolution proceeding under
section 7 of the Code of 2016.
40. The above conclusion of mine draws unfettered support if one views the
dispute before us from a yet another angle. Section 5 (1) of the Code says that
Adjudicating Authority for the purpose of the Part II of the Code means NCLT,
constituted under Companies Act 2013. Similarly, Section 79 (1) of the Code says
that Adjudicating Authority for the purpose of the Part III of the Code means DRT,
constituted under the Recovery of Debts due to Banks and Financial Institutions
Act 1993.
41. Thus, it is quite clear that Code of 2016 itself constituted two totally new
classes of Adjudicating Authorities for purpose of adjudication of the matters,
covered by the Code, aforesaid and such Authorities were even not in existence
when the power of Attorney was executed on 20.10.2014. All these speak loud
and clear that under no circumstances, the power of attorney in question can be
said to have authorised the attorney, appointed thereunder, to initiate a corporate
insolvency resolution proceeding under section 7 of the Code.
42. It may also be stated here that the learned counsel for the financial creditor
has laid enormous reliance on the clause 9 of the power of attorney to contend
that under such power, attorney concerned, was clearly authorized to initiate
insolvency or bankruptcy proceeding under the Code of 2016. But such contention
is found to be too farfetched one. Our foregoing discussion has made it more
than clear and it needs no further restatements.
43. Even otherwise too, such argument hardly holds any water. This is because
of the fact that under the instrument in question, the attorney was authorized only
“to attend meetings of creditors in insolvency or bankruptcy or winding up matters
of any borrower or debtor and to vote at such meetings and to accept composition
and to take such proceedings as the said Attorney shall or may think proper”.
44. Such authorization, therefore, can never be construed to mean that under the
power, the attorney was also authorized to initiate insolvency or bankruptcy
proceeding, as contemplated in the code of 2016. In that view of the matter, the
contention of the learned counsel for the financial creditor, premised on clause 9
GUWAHATI BENCH 733
of the power of attorney, being found without any substance, is required to be

rejected.
45. In view of our foregoing discussion, I have no doubt, whatsoever, in my mind
that when the financial creditor executed the power of attorney in question on
20.10.2014, he could not have visualized even remotely that the donee would be
required, one day, to initiate a corporate insolvency resolution proceeding under
the Code of 2016 which, as stated above, was not even in existence in 2014.
46. It may be stated here that the broad facts and circumstances in the case in
hand are very similar to the facts and circumstances in P.M. Desappa Nayanim
Varu& Ors. vs. Ramabhaktula Ramiah & Ors., reported in AIR 1952 Mad 559.
Therefore, one may also peruse profitably the decision, rendered by Hon’ble
Madras High Court in the case of P.M. Desappa Nayanim Varu (supra).
47. In Desappa Nayanim Varu’s case (supra), the plaintiff had executed a power
of attorney in favour of person empowering him to institute a suit before the Court
of Munsiff, Tirupathi. Accordingly, a suit was filed before the court aforesaid.
However, the Court of Munsiff had found that the suit was beyond pecuniary
jurisdiction of the court and, therefore, it was returned to the plaintiff to file the
same before the proper court.
48. Accordingly, attorney had filed a suit before the Court of Subordinate Judge at
Chitoor on the basis of power of attorney, executed earlier. But the Court of
Subordinate Judge at Chitoor dismissed the suit on holding that the attorney
holder did not have requisite competence to institute a suit before the Subordinate
Judge’s Court of Chittoor since the said power of attorney gave the attorney to
authority to initiate a suit only before the Court of Munsiff, Tirupathi and not beyond.
49. The matter was then carried to Hon’ble Madras High Court by the way of an
appeal challenging the order of the Subordinate Judge’s Court at Chitoor. On
hearing the parties, Honble Madras High Court had found reason to affirm the
decision of the Subordinate Judge. The relevant part of the judgment is reproduced
below:
“This power of attorney is a special power conferred on Narayanaswami Naidu
for a particular purpose. It says that the plaintiffs filed O. S. No. 314 of 1943 on
the file of the Court of the District Munsiff of Tirupathi & as it was not possible for
them to conduct the same personally they appointed Narayanaswami Naidu
as an agent to conduct the said suit. He is also authorised to conduct the entire
proceedings which, have to be taken in the said suit. The document therefore
confers an express power on Narayanaswami Naidu to conduct a particular
suit pending in a particular Court. It does not expressly engage the attorney for
the purpose of conducting the litigation generally in respect of the plaint schedule
properties. But Mr. Ramaswami Ayyangar argued that such power must be
inferred by necessary implication; as if the plaint is returned for want of
jurisdiction or for any other similar reason, some such power is necessary to
enable the power of attorney to re-present the plaint and conduct the suit in a
proper forum. If that were the intention’ of the parties, they would have expressly
conferred such power also. Further it cannot be assumed that the parties
contemplated any such contingency as when the plaintiffs filed the suit they
must have filed it only on the basis that Court had jurisdiction to entertain and
dispose of the suit. If the contention put forward on behalf of the appellants is
accepted, the Court will be introducing new words in the power of attorney and
also confer a new power on him. When the plaintiffs expressly authorised
Narayanaswami Naidu to conduct a suit in a particular Court. I cannot
hold that they intended to empower Narayanaswami Naidu to conduct
that suit in any other Court. I am therefore constrained to hold, on a fair
construction of the express words used in the power of attorney, that
Narayanaswami Naidu has no power, under the power of attorney, to
institute and conduct the suit in the Subordinate Judge’s Court of Chittoor.
In my view the conclusion arrived at by the Subordinate Judge is correct.
50. In my view, the law, laid down in P.M. Desappa Nayanim Varu’s case (supra),
is clearly applicable to our case since the fundamental facts of both the cases are
very similar. Being so, I have no hesitation in holding that Shri Srinjoy Bhattacharjee
did not have requisite authority to initiate the proceeding under section 7 of the
Code, 2016 against the corporate debtor.
51. It may be noted here that the counsel appearing for corporate debtor contends
that the proceeding in hand cannot be initiated without giving the Corporate
Debtor a fair chance of hearing. Such opportunity, contends counsel for the
Corporate Debtor, is required to be given so that it can establish that no debt, as
contemplated in 5(8) of the Code of 2016 remains outstanding from the side of
Corporate Debtor on the dates, so specified in the application.
52. Such contention is opposed to by the learned counsel for the financial creditor
stating that this Special Bench was constituted only to answer only one question
and same being, if, under the power of attorney in question, the attorney holder
had necessary competence to present an application under section 7 of the
Code and nothing else. He, therefore, urges this court not to try such a query
which does not fall for consideration of this Special Bench.
53. I have considered the rival submissions on this count and found the learned
members of NCLT, Kolkata Bench rendered divergent opinions only on one point,
same being, whether the power of attorney had given holder thereof the required
competence to initiate a proceeding under section 7 of the code, and, on no other
GUWAHATI BENCH 735
point. That being so, this Special Bench is required to decide only such a question
and no others.
54. A perusal of the orders rendered by the learned Members of the NCLT, Kolkata
Bench makes it clear. Therefore, this Bench has no occasion or the authority to
embark upon the question which is sought to be presented before this court by
the learned counsel for the corporate debtor.
55. In view of the foregoing discussions, I have found reason to concur with the
finding arrived at by the learned Member (J) while differing respectfully from the
conclusion, reached by the learned Member (T), NCLT, Kolkata Bench.
56. Resultantly, the reference is answered as stated above.
57. Registry is directed to send immediately the record along with a copy of the
order to the NCLT, Kolkata Bench for doing further needful with intimation thereof
to the President, NCLT, New Delhi.
Member (J)
National Company Law Tribunal
Guwahati Bench: Guwahati.
HYDERABAD BENCH 737
HYDERABAD BENCH
HYDERABAD BENCH 739
BEFORE THE NATIONAL COMP AY LAW TRIBUNAL

HYDERABAD BENCH
CP(IB)/19/7/HDB/2017
Between
Dr. B.V.S. Lakshmi
Wife of Mr. B. Sree Ramachandra Rao Aged about 64 years
Residing at 151/2, G-2, Rohiwal Windsor Apartments, Hill Fort Road,
Adarsh Nagar, Hyderabad.
... Petitioner
And
M/s. Geometrix Laser Solutions Private Limited
Having registered office at Lever 7, Maximus Tower, Building 2A,
Raheja Mindspace, Hyderabad - 500081
... Respondent
Counsels for the Petitioner : Mr. K. Arun Kumar
Counsels for the Respondent : Mr. KV Simhadri & Ms. Suchithra
CORAM:
Hon’ble Mr. Rajeswara Rao Vittanala, Member (Judicial) Hon’ble Mr.
Ravikumar Duraisamy, Member (Technical)
ORDER
(As per Rajeswara Rao Vittanala, Member (J))
1. The present Company Petition (which is herein after referred to as Company

petition) bearing No. CP(IB)/19/7/HDB/2017 is filed by Dr. BVS Lakshmi, a financial
creditor, (hereinafter referred to as Petitioner/applicant) under Section 7 of the
Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and
Bankruptcy (Application to Adjudicating Authority) Rules, 2016, by interalia seeking
directions to initiate Corporate Insolvency Resolution process, in the matter of
GEOMETRIX LASER SOLUTIONS PRIVATE LIMITED, (which is herein after referred to
as ‘ Company’) in accordance with the provisions of IBC, 2016; appoint Interim
resolution professional , award cost etc.
2. The case was first listed on 22.02.2017, whereby Mrs. BVS Lakshmi was
739
present, and Mr.A.V.Raghu Ram accepted notice on behalf of Respondent and

at the request of both the parties, the case was posted to 28.02.2017. On
28.02.2017, Mr. K. Arun Kumar appeared on behalf of Petitioner but none
appeared for the Respondents. Subsequently, on 01.03.2017, the learned
counsel for the Petitioner submitted that due amount was not paid to the
Petitioner till date, while the Learned Counsel for the Respondent denied the
claim itself. The Bench directed the Learned Counsel for the Respondent to
furnish any proof with regard to payment of claim in question, and adjourned
the matter to 03.03.2017. Again on 03.03.2017, the Learned Counsel for the
Respondent requested time, and finally on 08.03.2017 both the counsels argued
and reserved for orders. Since the Tribunal cannot refuse time, when parties
requested reasonable time to assist it, the case was adjourned on the above
dates duly following principles of natural justice.
3. The brief facts of the case, as set out in Company petition along with material
papers filed , are as follows:
a) M/s Geometrix Laser Solutions Private Limited , the Respondent Company,
is a Company incorporated under the provisions of Companies Act, 1956
on 5th January, 2006 with the Registrar of Companies, A, P. Hyderabad
presently having Authorised and paid up Capital of Rs.3,90,00,000/-.
b) The petitioner contends that the Company is liable to make payment to
the Petitioner a sum of Rs. 91,47,864/- (Rupees Ninety One Lakhs Forty
Seven Thousand Eight Hundred Sixty Four only) together with Interest at
rate of 18% per annum (calculated from the date of each disbursement
until the date of re-payment) and legal costs incurred by the Petitioner on
this behalf.
c) The Petitioner, in support of her claim, relied upon the Company’s Annual
Audited Financial Statements filed with the Registrar of Companies to
establish her claim spread over the three years period from March 2014
to March 2016. The petitioner has furnished the following details of her
claims, which she claims Acknowledged Debts:
(i) Debt owed as on 31/03/2014
The annual audited accounts of the Respondent Company for the
year 2013-14 for the full set of audited financial statements discloses
a sum of Rs. 38,74,767.00 (Rupees Thirty Eight Lakhs Seventy Four
Thousand Seven hundred sixty seven) as being due to the Petitioner
shown under the heading Dr. B.V.S Lakshmi. The sub-ledger in the
name of Dr. B V S Lakshmi for the year 2013-14 shows the amount
owed as Rs 41,04,391.00 (Rupees Forty one lakhs four thousand
HYDERABAD BENCH 741
three hundred ninety one only). The Petitioner relies upon on the
Sub-ledger (ignoring the error in the Unsecured Loans Schedule in
the Balance Sheet) to establish her claim. So Petitioner claims Rs
41,04,391.00 (Rupees Forty One Lacs Four Thousand Three Hundred
Ninety One only) as due as on 31/03/2014.
(ii) Debt owed as at 31/03/2015
The annual audited accounts of the Respondent Company for the
year 2014-15 discloses a sum of Rs. 89,85,792.00 (Rupees Eighty
Nine Lakhs Eighty Five Thousand Seven Hundred Ninety Two) as
being due to the Petitioner herein under the heading Dr. B.V.S
Lakshmi. The Sub-ledger in the name of Dr. BVS Lakshmi for the year
2014-15 shows the amount owed as Rs 75,03,462.00 (Rupees
Seventy Five Lakhs Three Thousand Four Hundred Sixty Two only)
represents what is owed by the Company to Dr. B V S Lakshmi
group, comprising four persons. To that extent, the Petitioner relies
on the sub-ledger (ignoring the error in the Unsecured Loans
Schedule in the Balance Sheet) to establish her claim. Therefore the
acknowledged debt of the Petitioner stands at Rs 75,03,462.00
(Rupees Seventy Five Lakhs three thousand four hundred Sixty Two
only) as on 31/03/2015.
(iii) Debt Owed as at 31/03/2016
Similarly, the annual audited accounts of the Respondent Company
for the year 2015-16 discloses a sum of Rs 79,36,737/- (Rupees
Seventy nine Lakhs Thirty Six Thousand Seven hundred thirty seven
only) as being due to the petitioner herein under the heading
Unsecured Loans from Director. This is patently incorrect, as Dr. BVS
Lakshmi is NOT a Director of the Company. Further, if we proceed
from the acknowledged debt of Dr. B V S Lakshmi as on 31/03/2015
standing at Rs 75,03,462.00 (Rupees Seventy Five Lakhs Three
Thousand Four Hundred Sixty Two only).
d) The petitioner contends that during the year 2015-16, no repayments were
made out of the said Rs. 75,03,462.00 to the Petitioner. Whereas, the
Petitioner advances the following sums on the following dates to the
Respondent Company:
23/10/2015 Rs 12,50,000.00 (by cheque)
23/10/2015 Rs 2,50,000.00 (by cash)
21/12/2015 Rs 1,00,000.00 (by cheque)
Sub-total Rs 16,00,000.00
Further, the Petitioner also claimed the following expenses:
30/10/2015 Rs 22,934.00 (as Travel & Conveyance)
04/11/2015 Rs 15,468.00 (as expenses incurred on behalf
of the Respondent Company)
31/12/2015 Rs 6,000.00 (as paid to Mr Prem Prasad, an
employee on Co. behalf)
Sub-total Rs 44.402.00
Grand total Rs 16,44,402.00 (advances + expenses)
Consequently, the amounts owed to Petitioner as on 31/03/2016 ought to
stand at:
Carried over from 31/03/2015 Rs. 75,03,462.00
Added during 2015-16 Rs. 16,44,402.00
Less any repayments during 2015-16 Rs. Nil
Owed to Petitioner as on 31/03/2016 is Rs 91,47,864.00
e) The Petitioner, therefore, contends that while the Audited Financial
Statement of the Company as on 31/03/2015 correctly reflect the amounts
owed on the Petitioner, the Audited Financial Statements as on 31.03.2016,
are mischievously and wrongly conceived as Rs 79,36,737.11. The
difference of Rs 12,11,127.00 remains un-explainable.
f) The petitioner contends that several other related transactions were
incorrectly and mischievously shown as loans given/ re-paid against
several names, including those of Ms Kalyana Hyma and Dr. B V S Lakshmi.
None of these disclosures are genuine. All of these are fabricated
statements in order to show that the Petitioner was paid all her dues. So
the petitioner wants the Company put to strict proof of establishment of re-
payments of loans to her during the FY 2015-16.
g) As the Company did not pay the dues as mentioned above, she got
issued a statutory notice dated 7th September, 2016 to the Respondent
Company, under Section 434 of the Companies Act, 1956 corresponding
to Section 271(2) of the Companies Act, 2013 demanding it to repay the
entire amount of Rs 91, 47,864.00 with Interest 18% per annum failing
which, it was warned that appropriate proceedings for winding up would
be initiated.
HYDERABAD BENCH 743
h) In pursuant to the above legal notice, the Respondent Company got issued
a reply dated 26th September, 2016 through their counsels Sri.
AV Raghuram that the Accounts of petitioner as on 31.05.2015 was history
and, it has been repaid and or adjusted as desired by the Petitioner, and
the Petitioner ceased to be a creditor of the Company and thus denied any
dues to the Petitioner much less interest.
i) Since the petitioner could not get any repayment of her dues, even after
the said legal notice, the Petitioner has approached the Hon’ble High
Court for the State of Telangana and AP by filing Company Petition bearing
C.P. No. 408 of 2016, under section 433(e) & (f) R/w Sections 434(l)(a) &
439 of the companies Act, 1956 by seeking the following reliefs:
a) That M/s. Geometrix Laser Solutions Private Limited, the Respondent
herein, may be wound up by this Hon’ble court under the provisions
of Sections 434, 435 & 436 the Companies Act, 1956.
b) The Official Liquidator High Court, Hyderabad or some other fit and
propel person be appointed as liquidator of the Respondent with all
powers under the provisions of the Companies Act. 1956.
c) That, pending disposal of the main company petition, the official
liquidator attached to this Hon’ble Court be pleased to appointed as
Provisional Liquidator of the Respondent Company i.e. Geometrix
Laser Solutions Private Limited.
However the above CP was withdrawn by the petitioner reserving her liberty to
file a fresh petition before the Company Law Tribunal. Accordingly, the Hon’ble
High court dismissed the Company petition as withdrawn by an order dated 13th
December, 2016. Subsequently, the present petition is filed by seeking the relief
as stated supra.
4. The respondents have filed an Interim reply affidavit dated 28th day of February,
2017 by interalia contending as follows:
a. All the allegations are denied as not correct and not tenable. The applicant
has not come to the Hon’ble Tribunal with clean hands to claim the
equitable relief of the corporate insolvency resolution process under the
provisions of the insolvency and Bankruptcy Code, 2016 and the same is
not maintainable either in law or on facts.
b. It is contended that Respondent Company was incorporated on 5th
January, 2006 with Promoter Directors, Mr. Pulipaka Kedarnath and Mrs.
BVS Lakshmi (Petitioner herein). The main object of the Company is to
carry on business as a laser job shop providing services to the industry in
India and abroad contributing to advancement of Indian industry in science

and technology.
c. The Petitioner has suppressed several material facts of the issue. She has
not stated/disclosed her status as Promoter Director. To conceal fact of
Promoter Director, she has fabricated crucial and relevant documents
wilfully and wantonly in Memorandum and Articles of Association, issued
by Registrar of companies by changing her name as Promoter Director to
that of her daughter’s name i.e., B. Kalyana Hyma. This is utter false
statement and the fact remains that she was the founder Director of the
Respondent Company and memorandum of association supports the
same. She has submitted her resignation by letter dated 14.3.2007.
d. The Petitioner has also suppressed the criminal complaint filed by
Respondent Company’s Managing Director, against the petitioner, before
the Commissioner of Police, Hyderabad 27.08.2016, which was registered
under FIR No. 202/2016, under Section 406,420,468, 471 of IPC. In the
Complainant, it is alleged that the signature of another Founder Director,
Mr. Pulipaka Kedarnath was forged, apart from other illegal activities,
which are of serious in nature.
e. The Petitioner failed to pay any supported documents to prove that she is
a financial creditor, more particularly the Respondent Company constituting
as a Debtor, to claim any legally enforceable debt against Respondent
Company. It is stated that the Petitioner was well aware that Respondent
Company itself is entitled to recover an amount of Rs.88,32,727.05/- from
the Petitioner and her daughter, Mrs. B.Kalyana Hyma. It is also stated that
the law also recognizes and permit the parties to set-off under Order VIII,
Rule 6 of CPC. Apart from that, as stated above, there is a Criminal complaint
pending against the Petitioner.
f. It is further stated that the Petitioner was the Managing Director of M/s
Supriya Granites Private Limited (currently under liquidation). The Punjab
National Bank has filed OA. No.629/2002 before DRT, Visakhapatnam
against M/s Supriya Granites Private Limited (Dl),
BVS Lakshmi (D2/Petitioner herein) and Ors by seeking to pass an Order -
cum-certificate against the Defendants therein directing them to pay a
sum of Rs.1,80,11,735.50/- together with further interest of 12.25%. The
said OA was partly allowed by an order dated 19.10.2007, by interalia
directing D1 and D2 to pay the amount and disallow the relief against D3
to D8, and also permitted to sale the scheduled properties in that
application.
HYDERABAD BENCH 745
Aggrieved by not allowing all the reliefs claimed in the original application
and allowing only against D 1 & D 2 , the Punjab National Bank has filed
Appeal No. 23 of 2014/899, 1480/67 before the Hon’ble DRAT, at Kolkata.
After hearing the case, the appeal was allowed by setting aside the
negative portion of DRT with regard to the claim against D3 to D8 by order
dated 29.1.2015.
g. In pursuant to the above proceedings, the Punjab National bank has
addressed a letter dated 14.11.2016 to MD of Respondent Company by
interalia stating that Supriya Granites Private Limited, Vijayawada, for which
Smt. BVS Lakshmi, Managing Director (the petitioner herein) has availed
the credit facilities for her company i.e. Cash Credit (Hyp) Rs.20 lakhs,
Term Loan Rs.8.15 Lakhs, Bridge Loan Rs. 5 Lakhs, FLC Rs. 64 Lakhs, Bank
Guarantee Rs. 10 Lakhs, Bill Purchase Rs. 8.50 Lakhs. The said limits were
availed for the Company from erstwhile New Bank of India. Suryaraopet,
Vijayawada during the year 1989. Subsequently, the said bank was merged
with Punjab National Bank. It is stated, that despite repeated legal notices,
reminders, court summons, Dr. BVS Lakshmi and her husband have not
paid any amount in pursuant to the DRT order as mentioned above.
Therefore, the Bank requested the Respondent Company to inform them
the complete details of shareholdings/debentures held by the Petitioner
and her husband in Respondent Company and also requested not to
transfer any of their shareholdings, etc. to any third party.
h. The Respondent relied upon on judgements of Hon’ble Supreme Court’s
in IBH Health Vs. Info-Drive Systems (CA No. 8230/2010), wherein the
Hon’ble Chief Justice Sri Kapadia made the following observations:
“The Company Court cannot be ‘maliciously’ used as a ‘debt collection
agency and that an action may lie in appropriate Court in respect of the
injury to reputation caused by maliciously and unreasonably commencing
liquidation proceedings against a Company and later dismissed when a
proper defence is made out on substantial grounds.: This Judgment may
ensure that a winding-up petition is scrutinized more carefully before it is
admitted
i. The Respondent further submits that the Petition itself is not in proper
format, and even the notice issued by the Counsel is not as postulated in
the Insolvency and Bankruptcy Code, 2016 and its rules made there under,
more particularly, NCLT Form-V and therefore, on this ground alone, the
Petition is not maintainable in law.
j. It is also submitted that, Respondent Company is a running Company,
and it has no liabilities or claims from any secured creditors including the
Banks, and it is meeting all the expenses of salaries to its employees and
staff and payment of revenue to the Government, if any orders are passed
in the present case, it will affect the smooth functioning of the Company.
5. We have heard Sri K. Arun Kumar, the learned counsel for the petitioner, and
Sri K.V.Simhadri, the learned counsel for the respondent, and have carefully
considered various pleadings and along with material papers filed by the
respective parties.
6. The Learned Counsel for the Petitioner, while retreating all the averments
made in the Petition, and in the accompanying documents, including legal notice,
has further submitted as follows:
(a) In pursuant to the legal notice, the Respondent Company has not only
failed to repay the due in question but totally denied the claim itself in their
legal notice in their reply dated 26.09.2016. On the contrary, they are
making counter stating they have set off the dues in question, and the
petitioner herself is due to them to the extent of Rs.33,07,136/-.
(b) The Learned Counsel further submits that the claim made in the Petition is
a specified debt, and it cannot simply be disputed basing on untenable
grounds. The dues in question still to be paid. The Criminal complaint
made by the Respondents against the Petitioners is frivolous and they
have given suitable replies to the queries.
(c) The Learned Counsel also relied upon the judgements of the Hon’ble
Karnataka High Court, rendered in State Bank of India Vs. Hegde and
Golay Limited vide citation (1988) Comp Cas 581(Kar), ILR 1987 Karnataka
2496.
In this case, the main issue was the appointment of provisional liquidator
u/s 433 of Companies Act, 1956. The Hon’ble High court of Karnataka has
considered various issues arise out of Winding up petitions. The Hon’ble
High court has referred various decisions/Judgements of various courts
including National and international. One of the judgements referred in
this case, which is some extant relevant to the present case is
Madhusudhan Gordhanadas and Co. V. Madhu Wollen Industries P. Ltd. (
MANU/SC/0033/1971, wherein it is interalia held ‘ Where the debt is un-
disputed, the court will not act upon a defence that the Company has the
ability to pay the debt but the Company chooses not to pay the particular
debt.
HYDERABAD BENCH 747
Another finding given in this case relates to maintaining a Civil Suit and
Winding up proceedings and held it there is no bar for it. Limitation issue
with reference to acknowledgment of debt in balance sheet and the
relevance of facts stated on the date of filing petition/instituting a case
would have any bearing on the subsequent change of facts and law on
the issue etc.
As stated above, these issues have hardly had any bearing on the present
case. As stated supra, the petitioner herself is the promotee Director and
naturally associated with several financial affairs of Respondent Company.
There is no accepted/un-disputed debt in the instant case, and on the
other hand, the petitioner herself is due to the Company.
d) Another judgement of Hon’ble High Court of Andhra Pradesh, rendered in
Vikas Jalan Vs Nucon Industries Private Limited (1998 (5) ALD 402, 1998 (3)
An WR 686, [2001] 103 Comp Cas 343 (AP)
This is a case filed under Section 433(c) of the Companies Act for winding up the
Respondent Company on the ground of its inability to pay debt. The question
considered in the case was whether debt in question was genuine and whether
respondent Company has got a bonafide and probable defence to make on facts
and law and when the set off plea was available to other parties. The Hon’ble
High court, on examining the entire issue including evidence found that the debt
in question was found to be bonafide.
In the instant case, facts are totally on different footing. As stated above, the
petitioner is former founder Director of the Company and several financial
transactions in the course of business of Company stated to be transacted and
the petitioner has relied upon selective balance sheets of the Company to make
her claim. The alleged debt could not be substantiated. It is not in dispute that the
daughter of petitioner (Hyma) was also a director of Company. The petitioner has
not raised that set off in question is legal or not. So the above case is not applicable
to the present case.
7. Shri K.V.Simhadri, the Learned Counsel for the Respondent, while reiterating
the contentions raised in the interim reply filed, has further contented that the
Petitioner is not at all a financial creditor and no amount what so ever was due to
the Petitioner; on the other hand, after setting off, the Petitioner herself is due to
the Company. She was also given suitable reply. He has also filed several
documents alleging illegal acts on the part of petitioner and resorted to
manipulation of the records of the Company. And the Respondents have also
filed a complaint with the Police regarding the illegal activities of the Petitioner.
The petition is also is not maintainable, as the present cause of action arises prior
to the IBC came into force.
8. The learned counsel further submit that Petitioner has not come to this Tribunal
with clean hands as she has suppressed several material facts so as to create
factious cause of action to file the present petition. The Petitioner has gone to the
High Court seeking to wind up the Company in order to satisfy her selfish ends.
However, for the reasons best known to the Petitioner, She has withdrawn the
petition and subsequently filed the present petition. The Petitioner even did not
state her status in the Respondent No.1 Company, and tried to show her daughter
in the records of the Company by manipulating the records.
9. The Learned Counsel further states that the Petitioner herself along with her
husband suffered an order passed by DRT as mentioned above and also avoiding
to repay the amounts as ordered by the DRT. But she is trying to malign the
Respondent Company and filing frivolous complaints against the Company.
10. The Learned Counsel also relied up on the judgement of the Hon’ble Principal
Bench rendered in Nikhil Mehta & Sons (HUF) & Others Vs AMR Infrastructures
Limited.
This case was also instituted by a Financial Creditor. The Hon’ble Tribunal, after
discussing entire law with regard to definition of ‘Financial Creditor and Financial
Debt, has inter alia held that merely some assured amount of return has been
promised, and it stands beached, such a transaction would not acquire the status
of a ‘financial debt as the transaction does not have the consideration for the time
value of money, which is a substantive ingredient to be satisfied fulfilling
requirements of the expression ‘Financial Debtor. Ultimately, the Hon’ble Principal
Bench has dismissed the application as the applicant did not cover the definition
of Financial Creditor’ and ‘Assured terms ‘as required to invoke Section 7 of IBC.
Though the facts of above case are different from the present case, but the present
petition was also filed invoking same Section 7 of IBC and thus interpretation of
section is relevant for the present case.
11. The Hon’ble Supreme Court in Amalgamated Commercial Traders Private
Limited Vs A.C.K. Krishnaswami (1965) 35 Company Cases 456 (SC), held as
follows:
“It is well-settled that a winding up petition is not a legitimate means of seeking
to enforce payment of the debt, which is bonafide disputed by the company. A
petition presented ostensibly for a winding up order but really to exercise
pressure will be dismissed, and under circumstances may be stigmatized as
a scandalous abuse of the process of the court”.
12. In the light of above discussion of the case, the following issues arise for
consideration in the case:
HYDERABAD BENCH 749
a) Whether the petitioner/applicant come under the definition of Section 7 of

IBC as Financial Creditor so as to invoke insolvency proceedings against
the Company;
b) Whether the petitioner is bonafide in claiming the relief;
c) If so, what is the relief, the petitioner is entitled for.
13. Firstly, we will deal with the scope of jurisdiction of Tribunal in dealing with
initiation of Insolvency Proceedings under IBC, 2016.
14. It is more or less an accepted proposition of law that bankruptcy forums are
forums of summary proceedings, and they cannot get into complex questions of
dispute over a debt or a claim, as that will be the domain of civil courts. The
Hon’ble Supreme Court of India in the case of IB A Health Private Limited Vs
Infodrive Systems Sdn, Bhd., (2010) 10 SCC 553, held as follows:-
‘The question that arises for consideration is that when there is a substantial
dispute as to liability, can a creditor prefer an application for winding up for
discharge of that liability? In such a situation, is there not a duty on the Company
Court to examine whether the company has a genuine dispute to the claimed
debt? A dispute would be substantial and genuine if it is bona fide and not
spurious, speculative, illusory or misconceived. The Company Court, at that
stage, is not expected to hold a full trial of the matter. It must decide whether the
grounds appear to be substantial. The grounds of dispute, of course, must not
consist of some ingenious mask invented to deprive a creditor of a just and
honest entitlement and must not be a mere wrangle. It is settled law that if the
creditor’s debt is bonafide dispute on substantial grounds, the court should
dismiss the petition and leave the creditor first to establish his claim in an
action, lest there is danger of abuse of winding up procedure.
15. As per section 7(5) of Insolvency and Bankruptcy Code, 2016, one of the
ingredients to initiate insolvency resolution process is that a ‘default’ should have
occurred. As per section 3(12) default means ‘non-payment of debt’ when whole
or any part or instalment of the amount of debt has become due and payable and
is not repaid by the debtor or the corporate debtor, as the case may be. Debt is
also defined under section 3(11), it means a liability or obligation in respect of a
claim which is due from any person and includes a financial debt and operational
debt.
16. In the light of above proposition of law and the definition of Financial Creditor,
we will examine the facts of present case basing on the documents filed by the
petitioner in her support ;
a) As stated supra, the petitioner put a total claim of Rs. 91, 47,864.00 as on
31.03.2016 covering a period of 3 years from March, 2014 to March
2016, owed from the Company. In support of the claim, the petitioner
enclosed a copy of Schedules to Balance sheet (page No.33 to 35
Attachment 1-A ) in which the name of Dr.B.V.Lakshmi was shown under
Schedule-D un-secured loan as Rs. 38,74,767/- and closing balance to
the credit of petitioner as Rs. 41,04,391/- as on 31.03.2014. Another
attachment enclosed is Attachment 1-B, page No. 36-40. At page No. 36
(notes to Accounts-Balance sheet, the name of petitioner was shown
under un-secured loans for Rs. 8,985,793/ as on 31.03.2014 and in Group
summary of un-secured Loans as 1 April, to 31 March, 2015 (page 37)
and that of Ledger Account (page 38 ) shown closing balance as Rs.
75,28,462/-
b) The petitioner has enclosed another attachment under IC as page Nos 39
and 40 in support of her claim in question. Page 39 relates to Notes
forming part of Balance at 31.03.2016 of the Company. In which, under
5(b) Loans and advances from related parties (unsecured) show as ‘From
Director Rs. 79,36,737/- and from Director relatives as Rs. 95,48,279/- as
on 31.03.2016. Note 23 (page 40) gives related parties disclosures in which
Niyaz Ahmed was shown as Managing Director: Kalayana Hyma (daughter
of petitioner) was shown as Director and Dr B.V.Lakshmi and Nusrath
Parveen were shown as relative of Director. Details of related party
transaction during the year ended 31 March, 2016 and balances
outstanding as at 31 March, 2016 given in Page No. 40 which shows Loan
given/repaid shown as Rs. 27,84,452/ and 17,67,366/- respectively and
balance outstanding (Loans) at the year end was shown for Kalyana Hyma
Rs. 79,36,737/-, Dr. BVS Lakshmi Rs. 10,17,086/-.
c) So as per the above documents filed by the petitioner herself shows loan
outstanding/ payable to her is only Rs. 10,17,086/-.
d) The legal notice dated 7th September, 2016 got issued by Counsel for the
petitioner stated that the petitioner was shareholder and creditor of the
Company and alleged several acts of oppression and mis-management
on the part of Niyaz Ahmed and Kedarnath. And without giving any details
of dues, has claimed for a total amount of Rs. 91, 47,864/- basing on
Annual audited accounts.
16. The petitioner has filed Articles of Association of Respondent Company (page
20 of material papers) in which, it is falsely shown P.Kedarnath and B.Kalayana
Hyma as First Directors of the Company. However, by perusal of the original
Memorandum and Articles of Association of the Company evenly dated
HYDERABAD BENCH 751
03.01.2006 (page No. 15 to 31 of material papers) Page 19 and internal page 5 of

Memorandum of Association & Articles of Association at page No. 31, internal
page 12 of Articles, filed by the Respondent Company, clearly shows that the first
directors are Pulipaka Kedarnath and B.V.S. Laxmi and not Hyma as claimed.
However, for the reasons best known to the Petitioner, she has chosen to file
concocted Articles of Association, which was downloaded from website, showing
her daughter’s name as First Director of the Company. In fact, that issue was also
under investigation by the police as mentioned supra. It cannot be disputed that
the petitioner was the first director of the Company as she had admittedly resigned
as Director w.e.f. 01.04.2007 vide her letter dated 14th March, 2007.
17. The Respondent has also filed relevant folios of Ledger Account of Dr.
B.V.S.Lakshmi and Kalyana Hyma Recoverable Account ( page No. 175 to 181 ) for
period from 1st April 2016 to 27th February, 2017 by debiting various illegitimate
payments made by the petitioner to her Account, and set off of the balance
payable on Kalyana Hyma against the petitioner as per the provisions of order
VIII Rule 6 of CPC.
18. The petitioner is still a shareholder holding 5, 57,946 shares of the Company
constituting 14.31 %. She has transacted several financial transactions with it and
she has also filed Winding up petition against the Company. The petitioner is fully
well aware that a criminal case is pending and set off was also made with
reference to her daughter’s transactions, and she herself also filed a case making
allegations/counter allegations against each other. All these things clearly show
that the petitioner is resorting to legal proceedings conveniently one after the
other. Moreover, the due claimed itself is in serious dispute and petitioner is
aware of all those proceedings. Whether the Company is entitled for set off of
dues of the petitioner with that of her daughter cannot be questioned in the
present petition. The Tribunal cannot be misused to settle and determine the
cases of disputed claims. In the instant case, as stated supra, there is no prima
facie evidence to show that the petitioner has lent money to the Company with a
promise to repay. When the respondent has filed adequate proof that there was
no due to the petitioner and on the contrary, she is due to the Company, the
Tribunal cannot enter into the disputed questions of fact, which can be resolved
through process of recording evidence by a competent Civil Court. In a summary
proceedings prescribed under IBC 2016, Tribunal cannot entertain a litigation
where basic issues like Financial Creditor, default etc. are in dispute.
19. In view of the above facts and circumstances, we are of the considered view
that the petitioner do not come under the definition of “Financial Creditor” and she
failed to satisfy the Tribunal about requisite ingredients of section 7 of IBC 2016 to
claim any relief. The petitioner miserably failed to make out even a prima facie
case to entertain this petition and she has not come to the Tribunal with clean
hands as ought to be in accordance with law. Therefore, the petitioner is not
entitled for any relief as sought for.
20. For the all reasons stated above, we are of the considered opinion that it is
not a fit case to initiate Insolvency process as prayed for by the petitioner/
applicant. Hence, we hereby dismissed CP(IB)/19/7/HDB/2017 with no order as
to costs. We further observe that this order will not be precluded the petitioner
from taking recourse to any remedy available under any other law.
Sd/-
RAVIKUMAR DURAISAMY
Member(T)
Sd/-
RAJESWARA RAO VITTANALA
Member (J)
HYDERABAD BENCH 753

HYDERABAD BENCH
HYDERABAD
CP (IB) No. 9/9/HDB/2017
Date Of Order: 21.02.2017
Between :
K.K.V. Naga Prasad
8/2/293/82/HE/16/A/1 Plot No. 16, Unit No.9,
HUDA Enclave, Road No.70, Jubilee Hills, Hyderabad - 500 034.
... Petitioner
M/s Lanco Infratech Limited
Plot No.4, Software Units Layout, HITEC City,
Madhapur, Hyderabad - 500 081.
... Respondent
Counsels for the Petitioner: Sri A.Venkatesh and C.Tulasi Krishna
Counsel for the Respondent: Mr. C.V. Narasimham, Mr. Avinash Desai Alekhya
Tadasina and Nikhil Khadkikar
CORAM:
Hon’ble Mr. Rajeswara Rao Vittanala, Member (Judicial)
ORDER
(As per Rajeswara Rao Vittanala, Member (Judicial)

1. The present Company Petition (referred to as ‘Company petition’ hereunder)
bearing No. CP(IB)/9/9/HDB/2017 is filed by Sh. K.K.V. Naga Prasad, an operational
creditor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, read with
Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority)
Rules, 2016, by interalia seeking directions to put Lanco Infratech Limited (Referred
to as “ Company” hereunder) under Corporate Insolvency Resolution process, in
accordance with the provisions of IBC, 2016; appoint Interim Resolution
professional, award cost etc.
2. The brief facts of the case, as set out in Company petition, are as follows:
a) M/s Lanco Infratech Limited (Which is referred to as Company) is a
Company incorporated under the provisions of Companies Act, 1956 with
an Authorised Capital of Rs. 1,20,00,00,00,000/- divided into

1,20,00,00,00,000 shares of Rs.1/- each and paid up capital of
Rs.2,74,93,26,655/- It is a listed Company on the Bombay Stock Exchange
with 30% public shareholding.
b) The Petitioner has worked for various group companies of the Company
from January, 2003 till January, 2014 at various positions/designations,
and the last being “Chief Executive Officer” of the Company posted at
corporate office in Gurgaon. He had resigned from the Company, vide his
letter dated 23.12.2013, after properly serving notice to the Company. So
he was relieved from service in the month of January, 2014. He claimed
that he was entitled to emoluments consists of pending salary, HRA, local
allowance, attire allowance, special allowance, child education allowance
etc. and also entitled for Leave Encashment, gratuity etc., at the time of
relieving his duties.
c) Since the Company did not pay dues due to him, the petitioner issued
demand notice on 2nd January, 2017, as per Form-3 under section 8(1) of
IBC 2016 R/w Rule 5 of Insolvency and Bankruptcy (application to the
Adjudicating Authority) Rules, 2016 demanding Rs. 1,22,22,969.34 along
interest with interest 24% p.a. from the Company by giving the Company
10 days’ notice to repay the same. The details of his employment and his
entitlements are mentioned below:-
Name of the KKV Naga Prasad Employee ID 00105826
Employee ( the petitioner)
Designation Chief Executive Officer Date of Joining 23.01.2003
Department Business Development Date of 23.12.2013

Resignation
Company Code Lanco Infratech Limited Date of 31.01.2014

Relieving
Location Gurgaon Paid days 31
Monthly Emoluments
Emoluments Entitlement Earnings Deductions Amount
Basic 687500.00 687500.00 EE PF Contribution 780.00
House Rent 343750.00 343750.00 Mobile Bills 16632.00

Allowances
HYDERABAD BENCH 755
Child Education 200.00 200.00 Income Tax 4064951

Allowance
Attire Allowance 2500.00 2500.00
Location Allowance 206250.00 206250.00
Special Allowance 337720.00 337720.00
Total Earnings (A) 1577920.00 Total 4082363.00
Deductions (F)
Leave No. of Amount Notice Period In Days

Encashment Leaves Calculation
Encashed
SL 94.50 4331249.69 Available SL 94.50
Balance
EL 105.00 4812499.65 Available EL 105.00
Balance
Total Leave 9143749.34 Notice Period 60
Encashment (B)
Other Re- Entitle- Earnings Notice Period 40
imbursements ment Served
Food Coupons 1300.00 Notice Period 20
Shortfall
Annual Gift 0.00 Notice Period 20.00
waived off
Annual LTA 0.00 Notice Period 0.00
adjusted against
Leaves
Annual Medical 12500.00 Leave Bal. (EL &SL) 199.50
Total
Reimbursement (C)
Additional Payments Amount Remarks
Gratuity Payment 1500000.00
Tax Food Bal. Payment 1300.00
Total Additional Payments (D) 1501300.00
Total Payable (E) = (A+B+C+D) 12222969.34
Net Amount payable to 8140606.34

Employee = (E-F)
d) The Petitioner has sent a demand notice/invoice dated 02.01.2017 under

Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating
Authority) Rules, 2016, to the Chairman of Company by requesting it to
repay the amount due within 10 days from the receipt of this letter, failing
which he informed that he would initiate a Corporate Insolvency Resolution
process in respect of the Company.
e) In pursuance to the above notice, M/s Chandhiok & Associates, Advocates
on behalf of Company sent a reply dated 11.01.2017 by email to Mr. Deva
Vrat Anand, Advocate for the Petitioner with a copy to the Petitioner by
inter-alia stating that the contents in the Demand Notice was nothing but
a cohesive means to harass and agonies the Company, and pressurize it
to give into his unjust demands by threatening insolvency of Company. It
is also stated that the demand notice was issued under Section 7 of the
IBC, which shall be given by a financial creditor, whereas the petitioner is
not a financial creditor and thus Demand Notice was also incorrect and
erroneous and not tenable. And this response was given as a notice
under Section 8(2) of IBC, 2016.
3. The petitioner was not paid his dues even though the said Demand Notice
was given to the Company. In support of his contention, the Petitioner has
produced a Certificate from Axis Bank, Begumpet Branch, and Hyderabad.
4. A reply dated 10.02.2017 was filed on behalf of the Company by interalia
stating as follows :
a) The petitioner has filed the Company Petition only with ulterior motive of
defaming, harming the reputation and goodwill, and to pressurize the
Company to give into his unjust and unlawful demands by making frivolous
claims against Company.
b) M/s Lanco Infratech Limited is a Company incorporated under the
provisions of Companies Act, 1956 with an Authorised Capital of Rs.
1,20,00,00,00,000/- divided into 1,20,00,00,00,000 shares of Rs.1/- each
and paid up capital of Rs.2,74,93,26,655/- And it is a listed Company on
the Bombay Stock Exchange with 30% public shareholding. It is one of the
India’s leading business entities, driving growth in the domains of
Engineering Procurement and Construction, Power, Solar, Natural
Resources and Infrastructure over the last two and half decades. The
Lanco Group of Companies provides employment to more than 3400
employees, and it is involved in building large civic and urban infrastructure
projects and thermals, hydro and solar power projects of national
importance.
HYDERABAD BENCH 757
c) A preliminary objection was also raised on the maintainability of the

petition by stating that, under Section 9(3)(b) of the Insolvency and
Bankruptcy Code, 2016, the Operational Creditor is required to furnish an
affidavit to the effect that there is no notice of dispute given by the Corporate
Debtor, relating to a dispute of the unpaid operational debt. The Petitioner
submitted a certificate from Axis Bank, which relates to 02.01.2017 to
21.01.2017. As per the requirement of Code, the petitioner is required to
provide a certificate from all financial institutions with whom he holds an
account. Moreover, it is not the case of the petitioner that Axis Bank is only
financial institution, in which he was maintaining his accounts. The
Company had already paid INR Rs.5,00,000 to the Petitioner in January,
2015, and this fact was also not bought to the notice of the Tribunal.
d) It is not the case of the Petitioner that the Company is insolvent to pay the
alleged claim in question, on the contrary that the petitioner himself was
liable to pay Rs.3,81,943/- to the Company. The petitioner, being a Senior
Management employee and CEO of the Company, has enjoyed wide
discretionary powers and those powers were misused by using Company
policies. Except the Petitioner herein, no other creditor of the Company
has made a demand on the Company, and approached the Tribunal. It is
further stated that the petitioner was not interested for honest settlement
of alleged claims, and in fact, the Petitioner was asked by the Company to
come forward, and make full and honest declaration of actual leaves
availed by the petitioner, and to settle the alleged claims.
e) The Tribunal cannot be misused to settle and determine the cases of
disputed claims. Once a dispute is raised in respect of operational debt,
the Tribunal does not any have jurisdiction to settle such disputes, which
necessary should be settled by Civil Court through a process of
adjudication by leading evidence on the disputed questions of fact.
f) The IBC does not have a retrospective effect, and its provisions will apply
to cases, where non-payment of an operational debt arises after its
promulgation. The Code came into operation on 28th May, 2016. The alleged
default relates to non-payment in question, arose prior to 28th May, 2016.
The Insolvency proceedings cannot be exploited as a normal alternative
to the ordinary mode of debt realisation.
g) The contention of the petitioner that he was constantly following up the
issue in question was not correct and denied and further contended that
a case cannot be decided by hearsay and self-serving statements.
h) The FFS in question was a SAP GENERATE DOCUMENT dated 14.07.2015
which was sent by one Shri Ch.V. Nanda Kishore to the petitioner. However,
Sh.Ch.V.Nanda Kishore did not take the Company into confidence, while
sending the said FFS, and he himself resigned from the Company, after
sending the said FFS. The petitioner himself has recruited him and is also
a relative to him.
i) The definition of dispute in the Code in an inclusive (and not an exhaustive)
definition and cannot be limited to existence of the Suit or Arbitration
proceeding. This is evident from reading of the definition of “dispute” in
the code, which states that “Dispute includes a suit or arbitration
proceedings”. All cases of dispute do not and need not necessarily result
in a suit or an arbitration proceeding prior to the notice. If the intent of the
legislature was to limit dispute to a suit or arbitration proceeding, it would
have used the term ‘‘means” instead of “includes” in the definition of
“dispute”. The language in one of the forms under Insolvency and
Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (as relied
by the Petitioner) cannot supersede or override the definition of dispute in
the Code.
j) It is contended that the Company is not at all liable to pay any amount to
the Petitioner and no debt has been established by the Petitioner and it
was never ascertained, definite or un-disputed as contended. Therefore,
the petitioner prayed the Tribunal to allow the petition as prayed for.
5. I have heard Shri A.Vekatesh, the Learned Counsel for the Petitioner, and Shri
C.V.Narasimham the Learned Counsel for the Respondent, and also perused all
the pleadings along with material papers filed by the respective parties.
6. The Learned Counsel for the petitioner reiterated various averments made in
the Company petition and subsequently filed written gist of arguments dated
13.02.2017 and his primary submissions are as under :
a) The petitioner was appointed as an employee to execute and manage
the functioning of the Company. He was transferred to various inter-
company transfers due to reorganisation of business of Company
commencing from January, 23, 2003 till his last day of service i.e., January,
31, 2014.
b) After pursuing the issue in question for more than 17 months, after the
date of relieving from the Company, he received full and final settlement
(FFS) by an e-mail dated 14.07.2015 through electronically generated
document with the caption as “SAP GENERATED DOCUMENT, NEEDS NO
SIGNATURE”. He stated that the total amount of Rs. 122,055,57.30/- subject
to statutory deductions/taxes as on 31.01.2014, and it was not paid till
date. The Petitioner relied upon SAP generated document, and it cannot
HYDERABAD BENCH 759
be disputed at this stage, and the same will be against the doctrine of
indoor management.
c) The Company failed to raise valid dispute before the issue of demand
notice, but replied on 11.01.2017 via e-mail stating that the Applicant
(Petitioner) was not a corporate debtor and has raised frivolous issues
with regard to leave encashment, travel bills for previous years, etc. He
also disputed various contentions of the Company with regard to claims
in respect of leave encashment, travel plans etc. The Company could
have raised all the issues and could have demanded and recovered the
alleged amounts due to them.
d) The Petitioner has contended that mere existence of any frivolous baseless
and superficial disputes do not fulfill the requirement of section 8(2) of
Insolvency Bankruptcy Code. The Corporate Debtor should have disputed
the debt before receipt of demand notice under section 8(1) of IBC. So the
alleged dispute notice issued by the Company is not at all tenable under
the law. The Company could have initiated appropriate legal action/
remedy to recover the alleged amounts due to them as the applicant
worked with the company for about 10 years. He has reiterated that the
debt in question is established, ascertained, definite and undisputed,
e) He relied upon Section 8 (2) of IBC, 2016 and clause 5 of Form No.3 under
Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules,
2016. The Section and Rule reads as under :
Section 8(2) of IBC: ‘The Corporate debtor shall, within a period of ten days
of the receipt of the demand notice or copy of the invoice mentioned in
sub-section (1) bring to the notice of the operational creditor – (a) existence
of a dispute, if any, and record of the pendency of the suit or arbitration
proceedings filed before the receipt of such notice or invoice in relation to
such dispute.”
Clause 5 of Form 3: If you dispute the existence or amount of unpaid
operational debt (in default) please provide the undersigned, within ten
days of the receipt of this letter, of the pendency of the suit or arbitration
proceedings in relation to such dispute filed before the receipt of this
letter/notices.”
In view of the above provisions, the Learned Counsel contends the dispute
in question should be raised by the corporate debtor before the receipt of
the demand notice, and it cannot be raised subsequent to the issue of
demand notice. So there is no existence of dispute as contended by the
Company,
f) The Company petition is maintainable as per law and facts and thus
prayed that the Tribunal may be pleased to admit the case and initiate
Insolvency process as prayed for.
7. Sh. C.V. Narsimham, the Learned Counsel for the Respondent, while reiterating
various averments made in counter, has further submitted as under:
a) That the present Petition is liable to be rejected on the ground that the
Company has already issued a notice of dispute vide letter dated 11.01.2017
to the Petitioner under Section 8(2) of the Code within a prescribed time
frame by explaining as to why the Petitioner was not entitled for payment
of any dues. The subject FFS was a disputed one ,and it was not
authenticated and unauthorised to issue.
b) The claim of the Petitioner for encashment of 199.5 unavailed leaves
amounting to INR 91,43,749,34 is baseless and untenable as the Petitioner
himself being a CEO was under a fiduciary duty to declare his leaves and
then claim un-availed leaves. However, during the entire tenure of
petitioner for about 9 years, not a single self-declaration of the leave was
made by the Petitioner. If the leaves were declared, the HR department
would have to input the availed leaves into the SAP system from time to
time. SAP system was adopted in the Company till the date of his
resignation. SAP statement reflects all the earned leaves (15 days per
year) and all sick leaves (12 leaves per year) which an employee is entitled
for encashment. However, for the reasons best known to the Petitioner, he
is claiming and insisting on encashment of entire 199.5 leaves as if the
Petitioner did not take any leave. The Petitioner cannot take advantage of
his own illegal action.
c) The Learned Counsel for the respondent also disputed the claim of the
Petitioner for his working in Gurgaon Corporate Office and used to stay for
only 2 -3 days in a week. He used to stay at Hyderabad much of the time
though he was supposed to work at Gurgaon Office. Same is the case in
respect of his assignment at Perth, Australia. So the Petitioner’s
unauthorized absence, during October, 2010 - February 2013, during which
the Petitioner was required to be present either in Gurgaon or Australia
was around 208 days. The Company got the above information based on
the internal audit reports and travel information retrieved thereafter. Since
the Petitioner is making false and baseless claims with regard to the
leave encashment, travel allowance, etc., the Company was still in the
process of retrieving additional information relating to the travels made
by the Petitioner,
d) It is further submitted that it is with malafide intention and by taking advantage
HYDERABAD BENCH 761
of his own mistakes, the Petitioner is trying to misuse/abuse the process of

law under IBC on untenable grounds that he did not take any sick leave or
earned leave during his entire tenure with the Company. The Petitioner has
not approached this Tribunal with clean hands to seek any relief. Moreover,
in collusion with Ch. Nandakishore, who was hired by the Lanco group on
the recommendation of Petitioner has created the FFS in question and started
making false claims on that basis. In fact, Sh. Nanda kishore is a very junior
employee in HR department of the Company and has no authority to issue/
send full and final settlement statements. He did not mark the e-mail (FFS) to
any department of management of the Company. So the basis of FFS in
question was fraudulently taken by the Petitioner, who was admittedly
working in higher executive position in the Respondent Company,
e) The learned counsel relied upon judgement of Hon’ble Principal Bench,
NCLT in the case of Nikhil Mehta & Sons (HUF) & Ors Vs. M/s AMR
Infrastructures Limited. However, the case was instituted, under Section 7
of IBC, 2016, and the issues considered in the case were; who is ‘Financial
Creditor and what is financial debt. And several winding up petitions and
Company Petitions No. 477 of 2014, 689, 691, 692,693, 694,695,700 etc.
were pending before the Hon’ble High court of Delhi. The facts and issue
raised in that case has no bearing in the present case,
f) The Learned Counsel for the Respondents, therefore, submits that petition
is liable to be dismissed.
8. I have carefully considered all the above contentions of both the parties.
9. The Insolvency and Bankruptcy Code, 2016 was enacted by the Parliament in
the 67th year of Republic of India and the main object of the Act is as follows:
“An Act to consolidate and amend the law relating to reorganisation and
in a time bound manner for maximisation of value of assets of such persons, to
the stakeholders including alternation in the order of priority of payment of
Government dues and to establish an Insolvency Bankruptcy Board of India,
and for matters connected therewith or incidental thereto”.
10. The Company Petition has been filed under section 9(3) (b) of Insolvency
Bankruptcy Code, 2016 read with Rule 6 of Insolvency Bankruptcy (Application to
Adjudicating Authorities) Rules, 2016 by inter-alia seeking to put the Company
under Corporate Insolvency Resolution Process, and to appoint interim resolution
professional etc.
As per section 9 of IBC, the operational creditor can file an application before
the Adjudicating Authority for initiating a Corporate Insolvency Resolution

Process. Along with the application/petition, the operational creditor has to
furnish the following documents:
(a) A copy of the invoice demanding payment or demand notice delivered by
the operational creditor to the corporate debtor.
(b) An affidavit to the effect that there is no notice given by the corporate
debtor relating to a dispute of the unpaid operational debt;
(c) A copy of the certificate from the financial institutions maintaining accounts
of the operational creditor confirming that there is no payment of an unpaid
operational debt by the corporate debtor; and
(d) Such other information as may be specified.
11. As per Section 8(1) IBC, 16, an Operational Creditor, on the occurrence of a
default, has to deliver a demand notice of unpaid operation debtor copy of an
invoice demanding payment of the amount involved in default to the Corporate
debtor in such form and manner as may be prescribed.
Section 3(12) of IBC defines a default means non-payment of ‘debt’ when whole
or any part or instalment of the amount of debt has become due and payable
and is not repaid by the debtor or the Corporate debtor, as the case be
Section 3(11) ‘debt’ means liability or obligation in respect of a claim which is due
from any person and includes a financial debt and operational debt
By reading of the above definitions, it can be inferred that default arise out of non-
payment of debt, “which is due and payable
In the instant case, as explained supra, due in question is totally in dispute as the
petitioner claim was not only rejected by the Company but also tiled a statement
showing that the petitioner himself was due to the Company. Moreover, the
petitioner having worked for more than 9 years in the Company as senior Executive
i.e. from 19.11.2005 to 23.12.2013 and keeping quiet for a long time, make a
demand basing on un-authentic and un-authorised FFS in question, is not at all
tenable to invoke the provisions of IBC , which is meant for protection of bonafide
stakeholders of a Company as per the objects of IBC as extracted above. The
petitioner failed to show his bonafides to approach this Tribunal except technically
contending that he has not received the notice of dispute in question from the
Company before receipt of demand notice in question.
12. It is not in dispute that the resignation of the Petitioner was accepted on
23.12.2013. A sum of Rs. 5 lakhs was credited by the Company to the Applicant on
15.01.2015. The petitioner failed to explain suitably that FFS in question was an
HYDERABAD BENCH 763
authenticated document. However, the Company suitably explained vide their

responses dated 11.01.2017 and 23.01.17 proving that there was a clear dispute
with regard to the claim in question and there are no dues from the Company to
the Petitioner. The Petitioner kept quiet for a long period from 23.12.2013 i.e., from
the date of resignation till January, 2017 and it indicates that the Petitioner did not
make any claim with respect to the alleged due before making the present issue.
By creating FFS as explained above, started the present issue. Moreover, the
Company asked the petitioner to come forward and make full and honest
declarations of actual leaves availed by the petitioner and to settle his alleged
claims. Without availing the said opportunity, he has rushed to this Tribunal.
13. The Tribunal cannot go into roving enquiry into the disputed claims of parties
as the object of IBC, as explained above , is to ensure reorganisation and insolvency
resolution of Corporate persons, individuals, etc., in a time bound manner for
maximisation of value of assets persons to promoted entrepreneurship etc. As
stated above, the Learned Counsel for the Respondents not only denied the
claims in question but also explained with cogent reasons as to how the Petitioner
is un-justified in filing the present petition by invoking the jurisdiction of this
Tribunal under IBC, 2016.
14. For the reasons stated above, I am of the considered opinion that it is not a fit
case to initiate Insolvency Resolution Process as prayed for by the Petitioner.
Hence, I hereby reject CP(IB) No. 9/9/HDB /2017 with no order to costs.
However, this rejection order will not preclude both the Petitioner and
Respondents to settle the alleged issue, and the Company may also extend its
offer for the Petitioner to come forward to settle the alleged issue as stated in its
counter as mentioned above, and further it will also not preclude the Petitioner
from taking recourse to any other legal remedy available under any law, with
reference to the subject matter.
Sd/-
MEMBER (J)

HYDERABAD BENCH, AT HYDERABAD
CP(IB) No. 16/07/HDB/2017
Between:
M/s. Indian Bank
66, Rajaji Salai, Royapettah, Chennai-600 014, Tamilnadu.
....Financial Creditor
AND
Kamineni Steel And Power India Private Limited
Kamineni, 4th Floor, King Koti, Hyderabad-500 001, Telangana
....Corporate Debtor
Counsel for the Petitioner : Shri V. K. Sajith
Counsel for Respondent : Shri E Ajay Reddy & Shri K. Ravi Kumar Chary
CORAM:
Hon’ble Mr. Rajeswara Rao Vittanala, Member (Judicial)
Hon’ble Mr. Ravikumar Duraisamy, Member (Technical)
ORDER
(As per Rajeswara Rao Vittanala, Member (Judicial))
1. The Insolvency and Bankruptcy Petition was filed by Indian Bank (Financial
Creditor) to initiate Corporate Insolvency Resolution Process Under section 7 of
the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of Insolvency and
Bankruptcy (Application to Adjudicating Authority) Rules, 2016 to initiate Corporate
It is stated that Indian Bank along with other banks granted loans to Kamineni
Steel and Power India Private Limited as follows:-
Limit (Rs. In Crores)
S. Name of the Bank Term Loans WC FB & NFB Total

No.
1. Indian Bank 333.77 103.64 437.41
HYDERABAD BENCH 765
2. Oriental Bank of Commerce 178.94 58.94 237.88

3. Karur Vysya Bank / JM Financial 133.65 68.52 202.17
4. Allahabad Bank 106.08 39.33 145.41
5. Indian Overseas Bank 212.16 78.78 290.94
6. Central Bank of India 156.16 57.62 213.78
7. Andhra Bank 202.89 68.54 271.43
8. Bank of Maharashtra 87.74 29.63 117.37
TOTAL 1411.39 505.00 1916.39
However, Kamineni Steel and Power India Private Limited failed to pay the loan
extended by the above said Banks and committed a default. The total default of
the bank is Rs.335,32,10,602.10 (Rupees Three Hundred and Thirty Five Crores
Thirty Two Lakhs Ten Thousand Six Hundred and Two Rupees Ten Paisa) together
with future interest and costs from 31.01.2017 till the date of payment.
3. Heard Sh.V.K.Sajith, Learned Counsel for Financial Creditor and Sh. E.Ajay
Reddy along with Sh. K. Ravi Kumar Chary, Learned Counsels for the Corporate
Debtor.
4. The Learned Counsel for Corporate Debtor submits that he has filed CP(IB)
No.l1/10/HDB/2017 under Section 10 of the Insolvency and Bankruptcy Code,
2016 read with Rule 7 of Insolvency and Bankruptcy (Application to Adjudicating
Authority) Rules, 2016 by interalia seeking to initiate Corporate Insolvency
Resolution Process in respect of Kamineni Steel and Power India Private Limited.
5. Kamineni Steel and Power India Private Limited filed a memo dated 17.02.2017
stating that the Hon’ble Tribunal has passed an Order under Section 13(1 )(a) for
the purposes mentioned in Section 14 and appointed Mr. Chodavarapu Bala
Mouli, as an Interim Resolution Professional (IRP). Thus, the Corporate Insolvency
Resolution Process commenced with effect from 10.02.2017. In pursuant to the
above order, the IRP has already made public announcement in Form A in
newspapers viz., the Hindu and Saakshi on 16.02.2017 and the public
announcement was also displayed on Insolvency and Bankruptcy Board of India
(IBBI) website, calling for submission of claims from all creditors including
employees and workmen etc. by fixing time limit as 24.02.2017. Hence, the
present petition is not maintainable and liable to be dismissed.
6. The Learned Counsel for Corporate Debtor further submitted that the Company
has also served a copy of NCLT order dated 10.02.2017 to Branch Manager and
as well as to Chief Manager/Authorized Officer, Indian Bank, main Branch, Surabhi
Arcade, koti, Hyderabad, vide letter dated 13.02.2017 against their

acknowledgment dated 16.02.2017. Hence, the Hon’ble Tribunal may not admit
the petition made by Indian Bank under Section 7 of IBC as the Corporate Insolvency
Resolution Process (CIRP) was already initiated by IRP.
7. The Learned Counsel for Corporate Debtor also submitted that the Indian Bank
is one among the Eight member banks of the consortium and also the leader
bank with a share of about 20% of the total debt of the eight lenders (viz., Indian
Bank, Oriental Bank of Commerce, Allahabad Bank, Indian Overseas Bank, Central
Bank of India, Andhra Bank, Bank of Maharashtra and Karur Vysya Bank/JM
Financial Asset Reconstruction Company Private Limited) and the Indian Bank is
part and parcel under the present Corporate Insolvency Resolution Process (CIRP)
8. Today the Learned Counsel for Financial Creditor has filed a memo dated
20.02.2017 by inter-alia stating that it has come to the knowledge of the Financial
Creditor that on 06.02.2017 the Corporate Debtor has filed an application vide
CP(IB)No.11/10/HDB/2017 under section 10 of the Code, to initiate Corporate
Insolvency Resolution Process against the Corporate Debtor and Hon’ble Tribunal
after hearing the matter was pleased to admit the same on 10.02.2017 and
further passed on Order under section 13(1 )(a) declaring moratorium period in
accordance with section 14 of the Code.
9. The Learned Counsel for Financial Creditor further submits that in view of
Hon’ble Tribunal’s order dated 10.02.2017 declared moratorium period under
section 14 of the Code, which prohibits institution of any kind of proceeding
against the Corporate Debtor, the Financial Creditor seeks the permission of
Hon’ble Tribunal to withdraw the captioned Application under Rule 8 of the
Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.
10. In view of that CP(IB) No. 16/07/HDB/2017 is dismissed as withdrawn.
No order as to costs.
Sd /-
RAVIKUMAR DURAISAMY
MEMBER (T)
Sd/-
MEMBER (J)
KOLKATA BENCH 767
KOLKATA BENCH
KOLKATA BENCH 769

KOLKATA BENCH
KOLKATA
C.P. No. 184/2017
Present : Hon’ble Member (J) Shri Vijai Pratap Singh
Hon’ble Member (T) Shri S. Vijayaraghavan
ATTENDANCE-CUM-ORDER SHEET OF THE HEARING ON 17th April, 2017, 10.30
A.M
Name of the Company Mayapur Vastu Developments Pvt.Ltd.
Under Section 9 IBC
S.NO. Name & Designation of Authorized Appearing on SIGNATURE
Representative (IN CAPITAL behalf of
LETTERS)
1. Rohit Sharma
Vinod Kothari Consultants Pvt. Ltd.

17.04.2017
Ld. Counsel for the petitioner and the respondent himself is present.
Ld. Counsel for the petitioner submitted an application dated 17/04/2017 annexing
the Terms of Settlement dated 15/04/2017 praying for leave to withdraw the C.P.
No. 184/2017 in terms of the aforesaid Terms of Settlement. Prayer is allowed.
ORDER
C.P. No. 184/2017 is dismissed as withdrawn on the basis of the Terms of

Settlement dated 15/04/2017, which shall form a part of the order.
There is no order as to costs.
Sd/-
(S. Vijayaraghavan)
Member (T)
(Vijai Pratap Singh)
Member (J)
769

KOLKATA BENCH
KOLKATA
CORAM:
C.P. No. 171 of 2017
In the matter of:
M/s. Hada Textile Industries Limited
....Corporate Applicant
Counsels on Record:
1. Mr. Rajesh Bohra, Advocate Applicant/Petitioner
2. Mr. Paras Kumar Jha Corp. Applicant
3. Mr. Amrish Kumar Hada Corp. Applicant
4. Mr. Sujit Sankar Koley Appeared for WBSEDCL
Date of Pronouncing the Order : 13.04.2017
ORDER
Per Shri Vijai Pratap Singh, Member(J)

This petition has been filed under SICA Repeal Act, 2003 on behalf of a company
declared sick under the provisions of Board for Industrial & Financial Reconstruction
(hereinafter referred to as “BIFR”) seeking directions to extend the scheme period
further for five years.
It appears from the petition that BIFR vide its order dated 16.01.2004 sanctioned
the Rehabilitation scheme of the Corporate Applicant and appointed IFCI as
Monitoring Agency to monitor the progress of implementation of the scheme. In
para 9 of the application, the scheme is stated to be effective till 31.03.2017. As
per Section 4(b) of Sick Industrial Companies (Special Provisions) Repeal Act,
2003 as amended vide notification dated 28.05.2016, all the BIFR matters have
been abated except for sanctioned scheme, which has been saved in terms of
section 5 of the Repeal Act and as such the sanctioned schemes are continued to
be binding, which was effective upto 31.03.2017.
The Central Government vide notification dated 25.11.2016 has enforced the Sick
KOLKATA BENCH 771
Industrial Companies (Special Provisions) Repeal Act, 2003 w.e.f. 01.12.2016 and
accordingly, BIFR has been dissolved.
The Central Government vide notification dated 25.11.2016 has enforced the Sick
Industrial Companies (Special Provisions) Repeal Act, 2003 w.e.f. 01.12.2016 and
accordingly, the BIFR has been dissolved. It appears from the above notification
that proceeding before the BIFR stands abated and the petitioner was having
liberty to initiate proceeding under the provisions of Insolvency and Bankruptcy
Code, 2016 within 180 days from the date of commencement of Insolvency and
The petitioner has not filed the petition under the Insolvency and Bankruptcy
Code, 2016 and this Tribunal does not have power to amend the order of BIFR or
to extend the scheme period sanctioned by BIFR for further five years under IBC
Code, 2016.
In the light of the above observations, we are of the view that this petition is liable
to be dismissed as not maintainable.
Petition is dismissed as not maintainable.
(Manorama Kumari)
Member (Judicial)
Member (Judicial)
Dated : 13.04.2017
NATIONAL COMPANY LAW TRIBUNAL KOLKATA BENCH KOLKATA

C.P. NO. 83 /2017
Present: Hon’ble Member (J) Shri Vijai Pratap Singh Hon’ble
Member (T) Shri S.Vijayaraghavan
ATTENDANCE-CUM-ORDER SHEET OF THE HEARING ON 24th February, 2017, 10.30
A.M
Name of the Company Hindustan Motors Limited

Under Section 5(1)(C) IBC
S. Name & Designation of Appearing on Signature with Date
No. Authorized Representative behalf of
(IN CAPITAL LETTERS)
Prasun Mukherjee Advocate HPCL 24.02.2017
Deepak Agarwal Advocate HPCL 24.02.2017
Mr. Ratnanko Benerji, Sr. Advocate
Ms. Manju Bhutania, Advocate
Mr. Anand Jhunjhunwala, Advocate
Mr. Nikhil Jhunjhunwala, Advocate
ORDER
Ld. Counsels for the Applicant as well as on behalf of HPCL are present.
This petition has been filed by Hindustan Motors Ltd. with the prayers that
(a) clarifications be issued by reason of abatement of proceedings before
BIFR in terms of the reference under Section 15(1) of the Sick Industrial
Companies (Special Provisions) Act, 1985 by reason of the commencement
of The Sick Industrial Companies (Special Provisions) Repeal Act, 2003, all
orders passed by the Board under the previous enactment stands abated
and are no longer in force and
(b) in the alternative, permission be granted to effect sale of its “Ambassador
Brand” to Peugeot Citroen Automobiles S.A. in terms of the Transfer
Agreement or to sell the “Ambassador Brand” to any third party if the sale
of the Brand does not occur pursuant to the Transfer Agreement.
KOLKATA BENCH 773
The petitioner has mentioned that they have moved this application under Section
5(l)(c) of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003. By
the 8th Schedule of the IBC Code, Section 4(b) Sick Industrial Companies (Special
Provisions) Repeal Act, 2003 has been amended and by virtue of which
proceedings of whatever nature pending before the Appellate Authority or Board
under the Sick Industrial Companies (Special Provisions) Act 1985 shall stand
abated and as per proviso of said section a company in respect of which such
appeal or reference or enquiry stands abated under this clause, may make
reference to the National Company Law Tribunal under the IBC Code, 2016 within
180 days from the commencement of the IBC Code, 2016. In this case petitioner
has stated in the petition that on 1st October. 2015, BIFR was pleased to pass an
injunction order restraining the applicant company from disposing of or alienating
or creating any third party rights on any of its fixed assets without the prior consent
of BIFR.
SICA was repealed on 1st December, 2016 when the Sick Industrial Companies
(Special Provisions) Repeal Act, 2003 came into force by notification having been
issued by the Central Government on 28th November, 2016.
After the abatement of the proceedings in BIFR the petitioner company is at liberty
to move a petition under IBC Code, 2016 within 180 days from the date of notification
but till date no petition has been moved under the IBC Code, 2016. The petitioner
company has moved an application for clarification under Section 5(1)(c) of the
Sick Industrial Companies (Special Provisions) Repeal Act, 2003, which is not
maintainable. It is to be made clear that by virtue of above mentioned Repeal Act,
2003, which came into force on 1st December, 2016, the petitioner may file, after
the abatement of the proceedings, under the IBC Code, 2016, for initiation of
corporate insolvency proceeding, then only it can be taken cognizance of.
Proceeding in the nature of clarification is not maintainable under Section 5(1)(c)
of the Repeal Act, 2003 before the Tribunal. Therefore, the petition is to be dismissed
as not maintainable.
ORDER
Petition is dismissed.
(S. Vijayaraghavan)
Member (T)
Member (J)
MUMBAI BENCH 775
MUMBAI BENCH
MUMBAI BENCH 777

MUMBAI BENCH
MUMBAI
C.P No. 268/ (MAH) / 2017
CA No.
CORAM :
Present: SHRI B.S.V. PRAKASH KUMAR MEMBER (J)
SHRI V. NALLASENAPATHY MEMBER (J)
ATTENDANCE-CUM-ORDER SHEET OF THE HEARING OF MUMBAI BENCH OF THE
NATIONAL COMPANY LAW TRIBUNAL ON 10.04.2017
Parco Engineers (Mumbai) Pvt. Ltd.
V/s.
Nirmal Lifestyle Ltd.
SECTION OF THE COMPANIES ACT: Insolvency and Bankruptcy Code, 2016
1. Siddhant Sanghvi Advocate
Order
CP No.268/I&BP/NCLT/MB/MAH/201 7
At request of the Petitioner Counsel, on the memo filed on behalf of the Petitioner
Company, this Company Petition No.268 of 2017 is dismissed as withdrawn.
Sd/-
B.S.V. PRAK1\SH KUMAR
Member (Judicial)
Sd/-
V. NALLASENAPATHY
Member (Technical)

MUMBAI BENCH
MUMBAI
C.P No. 63/(MAH)/2017
CA No.
CORAM:
SHRI V. NALLASENAPATHY MEMBER (T)
NAME OF THE PARTIES:
General Engineering Works
V/s.
Raj Oil Mils Ltd.
1 Siddharth Samarthay Advocate Operational Creditor
Order
CP 63/2017/I&BP/NCLT/MB/MAH/2017
For having the petitioner counsel sought to withdraw this company petition for
filing petition afresh, the petition is dismissed with liberty to file afresh in
accordance with law.
Sd/-
B.S.V. PRAKASH KUMAR
Member (Judicial)
Sd/-
V. NALLASENAPATHY
Member (Technical)
MUMBAI BENCH 779

MUMBAI BENCH
MUMBAI
C.P No. 62/(MAH)/2017
CA No.
CORAM:
Mukhi Tradelink
V/s.
Raj Oil Mills Ltd.
1 Siddharth Samarthay Advocate Operational Creditor
a/w Adv. Bhuvan Thakkar
i/b Malvi
Ranchoddas & Co.
Order
For having the petitioner counsel sought to withdraw this company petition for
filing petition afresh, the petition is dismissed with liberty to file afresh in
accordance with law.
Sd/-
Member (Judicial)
Sd/-
V. NALLASENAPATHY
Member (Technical)

MUMBAI BENCH
MUMBAI
C.P. No. 36/(MAH)/2017
CA No.
CORAM :
Rediffusion Dentsu Young & Rubicam Pvt. Ltd.
V/s.
M/s. Hubtown Limited
1. Medhavin Bhatt Advocate Applicant
i/b M/s MV Law Partners for applicant
Order
CP 36/I&BP/NCLT/MB//MAH/2017
It has been mentioned by the Counsel of both sides that compromise has been
arrived at in between the parties. The Respondents have handed over DDs for an
amount of Rs.42,24,000/- to the Petitioner side. The Petitioner and the
Respondents have hereby filed the Consent Terms seeking withdrawal of the
Petition by looking at the Consent Terms.
For the dispute being resolved, the Petition is dismissed as withdrawn.
Ends: Consent Terms.
Sd/-
Member (Judicial)
Sd/-
V. NALLASENAPATHY
Member (Technical)
MUMBAI BENCH 781

MUMBAI BENCH
MUMBAI
COMPANY PETITION NO. 36 OF 2017
M/S. REDIFFUSION DENTSU YOUNG AND
RUBICAM PRIVATE LIMITED
having its registered office at Lotus Corporate Park, 18th Floor,
A-Wing, Unit Nos. 1801-1802, Graham Firth Steel Compound,
Off Western Express Highway, Goregaon (East), Mumbai - 400 063
... Applicant/
VERSUS
M/S. HUBTOWN LIMITED
Akruti Center Point, 6th Floor, Central Road Marol MIDC, Andheri (East),
Mumbai - 400 093
Corporate Debtor
CONSENT TERMS
MOST RESPECTFULLY SHOWETH:

1. The parties hereto have had discussions among themselves for an amicable
settlement of the matter and pursuant to such discussions the parties have hereto
have agreed, confirmed and arrived at a full and final settlement of the disputes
and differences between them as follows.
2. The parties hereto have agreed that, the Respondent shall pay and undertakes
to this Hon’ble Tribunal to pay to the Applicant an aggregate sum of Rs. 42,24,000/
- (Rupees Forty Two Lacs Twenty Four Thousand only) (inclusive of TDS) in 6 (Six)
installments which shall include the Principal Outstanding of Rs. 34,86,000/-
(Rupees Thirty Four Lacs Eighty Six Thousand only), Rs. 4,38,000/- (Rupees Four
Lacs Thirty Eight Thousand only) towards agreed interest on the Principal amount
and a sum of Rs. 3,00,000/- (Rupees Three Lacs only) towards legal expenses
incurred by the Applicant. A detailed schedule of payment is hereto annexed and
marked as Annexure “A”.
3. Upon singing this consent term, the respondent agree and undertakes to this
Hon’ble Tribunal that they shall pay to the Applicant a sum of Rs. 7,24,000/-
(Rupees Seven Lac Twenty Four Thousand only) as initial payment/ 1st instalment
towards the amount stated in Clause 2 hereinabove by Cheque dated 22.03.2017

bearing No. 825415 drawn on Canara Bank, Santacruz (East) branch, and in
favour of the Applicant. The Respondent shall also handover to the Applicant
upon signing these Consent Terms 5 (Five) Post Dated Cheques of Rs. 7,00,000/
- (Rupees Seven Lacs only) each as more particularly stated in Annexure “A”
hereto. The Respondent undertakes to this Hon’ble Tribunal to hand over TDS
Certificates for the aforesaid payments. The Applicant on receipt and realisation
of all the aforesaid 6 (Six) installments for an aggregate sum of Rs. 42,24,000/-
(Rupees Forty Two Lacs Twenty Four Thousand only) (inclusive of TDS) shall
handover No Dues Certificate to the Respondent.
4. The Parties hereto agree and undertake to this Hon’ble Tribunal that the
Consent Terms shall be binding upon their legal heirs, representative, associates,
nominee/s and executors.
5. The Parties hereto distinctively agree that they shall support each other and
take all steps, necessary or desirable, for consummation of the terms
contemplated herein.
6. The Parties hereto agree that in the event of any default of any payment/s by
the Respondent hereto, the Petition shall stand admitted without further reference
to the Court and the Applicant shall be entitled to take appropriate steps as may
be permissible under the law for recovery of their dues.
7. The Respondent hereto agrees and undertakes to this Hon’ble Tribunal that
they shall not apply for extension of time for payment of any of the instalment as
mentioned in Annexure “A’ hereto. The Respondent further agrees and undertakes
to this Hon’ble Tribunal to follow proper procedure, comply with necessary laws
and take necessary steps as may be required to effectively implement these
Consent Terms.
8. The parties hereto agree that, without prejudice to the above, in the event the
Respondent defaults in complying with these terms the Applicant shall be at
liberty to make an application before this Hon’ble Tribunal to complete the objective
of these Consent Terms after giving 7 (seven) days prior written Notice to the
Respondent at their Registered address as stated in this Petition to rectify the said
default.
9. The parties agree that once these Consent Terms are filed before this Hon’ble
National Company Law Tribunal, both the parties shall withdraw/stands
withdrawn any application/s, Complaint/s and or such other proceedings filed
against each other before any authority, Court or Tribunal in respect to subject
matter of these Consent Terms.
MUMBAI BENCH 783
10. The parties agree that they shall pass all the resolutions whether by the Board
or by the Shareholders needed or required under the Companies Act, 2013, or
any other law for the purpose of implementing the Consent Terms in all respects.
11. In view of these Consent Terms, the above Company Application is accordingly
disposed of.
Dated this 23rd day of March 2017.
For M/s. MV Law Partners For M/s. Rediffusion Dentsu Young
and Rubicam Private Limited
Partner
Usha Vishwanathan M/s. Hubtown Limited
Advocates for the Applicant Applicant/Operational Creditor
(Director/Authorised Signatory)
ANNEXURE ‘A’
SCHEDULE OF PAYMENT
SL. DATE PARTICULARS GROSS NET AMOUNT
NO. OF AMOUNT AFTER
PAYMENT (IN RS.) DEDUCTING
TDS (IN RS.)
1. 23.03.2017 Cheque dated 22.03.2017 bearing 7,24,000 6,68,317

No. 825415 drawn on Canara Bank,
Santacruz (East) Branch in favour
of Rediffusion Dentsu Young &
Rubicam Pvt. Ltd.

No. 825416 drawn on Canara
Bank, Santacruz (East) Branch in
favour of Rediffusion Dentsu Young
& Rubicam Pvt. Ltd.

& Rubicam Pvt. Ltd.


& Rubicam Pvt. Ltd.

& Rubicam Pvt. Ltd.

favour of Rediffiision Dentsu Young
& Rubicam Pvt. Ltd.
TOTAL 42,24,000 38,95,920
GENERAL POWER OF ATTORNEY

TO ALL TO WHOM THESE PRESENTS SHALL COME, HUBTOWN LIMITED,
(formerly known as Akruti City Limited, tier known as Akruti City Limited and prior
to that as Akruti Nirman Limited), a Company incorporated under the Companies
Act, 1956 (Act 1 of 1956 having its Registered office at Hubtown, Solaris, 2nd Floor,
N.S. Phadke Marg, Andheri (East), Mumbai-400 009, SEND GREETINGS:-
WHEREAS we are in business of property development, commercial and
residential. As a part of our business activities, we become parties to litigation
either instituting or defending or settling litigations or disputes.
AND WHEREAS it has, therefore, been decided in the aforesaid circumstances to
give the authority to MR. ALI MURTAZA, Senior Manager (Legal Cell) of the
Company.
NOW KNOW YE ALL MEN AND THESE PRESENTS WITHNESSTH that we,
HUBTOWN LIMITED do hereby nominate, constitute and appoint MR. ALI
MURTAZA, Senior Manager (Legal Cell), residing at 602, Shivshakti Co-operating
Housing Society Limited, Dhake colony, Andheri (West), Mumbai - 400 053 to be
our true and lawful Attorney to do the following acts, deeds and matter flutters
and things for us, in our name and on our behalf:
1. To initiate, prosecute, defend, appear, act, plead, withdraw, settle ,
compromise any judicial or quasi-judicial proceedings before any Court,
both Civil and Criminal, State Government, Revenue Authority, Municipal
Corporation of Greater Mumbai (MCGM), Slum Rehabilitation Authority
(SRA), Maharashtra Housing and Area Development Authority (MHADA),
MUMBAI BENCH 785
Maharashtra Slum Tribunal, Maharashtra Special Slum Tribunal, Additional

Collector (Enc.), Land Acquisition Officer or any Officer of the Government,
State or Central, or any authority or Tribunal or any other statutory authority.
2. To give evidence, tender documents and withdraw documents before
and from any judicial or quasi-judicial authorities.
3. To accept service or Writ of Summons, Notices, Motions, and Processes.
4. To prefer and file any suit, appeal, review petition, revision application,
Writ petition, from any Order, Decree, Petition, Application or Judgment of
Judicial or quasi-judicial authorities as also of any officer, authority or
Tribunal appointed under any statues.
5. To execute, enforce or resist execution of any Decree order, or Attachment
Order or compromise or settle any legal disputes.
6. For all or any of the purposes herein, to engage professionals including
Advocates, Solicitors, Counsels, and Consultants sign Vakalatnama and
give them instructions from time to time.
7. For any or any of the purposes herein, to sign, execute, verify, affirm, swear,
deliver, file, amend, alter any letter, undertakings, affidavits, declarations,
receipts, plaints, written statements, writ petitions, petitions, memo of
appeals, review petitions, revision applications, complaints, consent terms,
minutes of the order and representation, in all Civil and Criminal Proceedings.
AND this Power of Attorney shall be valid for one year. .
AND we hereby agree and undertake to ratify and confirm all and whatsoever
our said Attorney or any substitute/s acting under him shall do or purport, to do or
cause to be done in the premises by virtue of these presents.
IN WITNESS WHEREOF, we have set and subscribed our hands and signatures to
this writing at Mumbai, on this day of July 2016.
SIGNED AND DELIVERED by the for HUBTOWN LIMITED
Within named HUBTOWN LIMITED)
In the presence of ......... Managing Director
Before me
Identified by me:
I ACCEPT,
(ALI MURTAZA)
GENERAL POWER OF ATTORNEY

KNOW ALL MEN TO WHOM THESE PRESENTS SHALL COME:
We, Rediffusion - Dentsu, Young & Rubicam Private Limited, a Company
incorporated under the Companies Act, 1956 and having its Registered Office at
Terminal 9 , 5th floor, Nehru Road, Vile Parle (East), Mumbai 400 099 (hereinafter
called the "Company”) SEND GREETINGS:
WHEREAS the company is desirous of appointing its officers (Mr. Bhautik
Navinchandra Mithani (Group Chief Financial Officer) and Ms. Vandna Arora
(denerai Manager - Secretarial & Legal), whose signatures are appended below
for the purpose of identification as its true and lawful attorney to act for it and on
its behalf to, do the following acts, deeds, matters and things in the course of and
for the Company's business.
NOW, THEREFORE, KNOW ALL MEN AND THESE PRESENT WITNESSETH THAT
WE Rediffusion - Dentsu, Young & Rubicam Private Limited, do hereby nominate,
constitute and appoint the said Mr. Bhautik Navinchandra Mithani and Ms.Vandna
Arora as our lawful Attorney to do, perform and execute all or any of the following
acts, deeds, matters and things hereinafter mentioned.
1. To sign, execute, carry out, deliver and complete on behalf of the Company
all papers, correspondences, vouchers, agreements, contracts, forms,
applications, petitions, transfers, receipts and all other deeds and
assurances and documents for the due completion and performance of
any of the transactions which may now be subsisting or which the company
may enter into in the ordinary course of business of the Company.
2. To appear on behalf of and in the name of the Company before any
Government, whether Central or State, or Public, Municipal or Local
Authorities or Officers including Income-Tax, Sales Tax, Electricity Boards,
Telephone Authorities, Central or State Excise Officers or any other Tax
Officer or Authorities and represent the Company and to file and sign any
bonds, applications, returns or other statements that may be necessary in
connection with the business and affairs of the company.
3. To file, make, execute, swear, declare, register and advertise all plaints,
petitions, declarations, vakalatnamas, affidavits, applications, statement
of claim, counter-claim, writings and do all acts, deeds or things whatsoever
necessary or expedient and to appear on behalf of the company and to
represent the company in all suits, petitions, arbitrations, applications
and all other matters and proceedings of any nature whatsoever before
any Court, Tribunal, Quasi-Judicial body, Arbitrator or any Authority
prescribed or set up under law.
MUMBAI BENCH 787
4. To take steps as and when action arises to lodge and/or file complaints
on behalf of the company in all matters under Criminal Laws of the country
and to take and/or adopt proceedings in Magistrate’s Court/s and to
compound any matters if so found necessary or advisable and to sign
petitions/ complaints, applications, vakalatnamas, letter of authority or
replies as may be necessary and to make statements and give evidence
if so required and produce papers and/or documents before ail legal
authorities dealing with such cases.
5. To apply for, obtain and renew all licenses, permits, agreements etc. that
may be necessary for the carrying on the business of the company.
6. To present to the Registrar, Sub-Registrar or any other proper Registering
officer of Assurances concerned in any part of India, any deed, instrument,
document or writing whatsoever to which documents according to the
provisions of law for the time being in force with regard to the registration
of instruments and assurances as may be required to be registered and
also to admit before the said Registrar, Sub-Registrar or any other
Registering Officer as aforesaid for the execution by the Company and its
Directors of any such deed, instruments, documents or writings
whatsoever.
7. To represent and appear on behalf of the Company to file an application
to register the Trade Marks, Patents, Copyrights or any other process
suitable to defend all rights relating to all the intellectual property of the
company with the concerned authorities as established or constituted
under The Trade Marks Act, 1999, Indian Copyright Act, 1957, Indian Patent
Act 1970 or any other statutes prevailing in India from time to time.
8. Generally to do all such acts, deeds, matters and things as may be
conducive and incidental to the exercise of the powers and authorities
hereby given.
9. The Company hereby agrees to ratify and confirm all that the said Attorney
may legally do or cause to be done by virtue of these presents.
10. This Power of Attorney will be valid and binding till such time it is terminated
or otherwise cancelled in writing by the Company.
IN WITNESS WHEREOF the Common Seal of the Company is hereunto affixed
and these presents are signed by the Chairman & Managing Director of I
Company on this 31st day of March 2010.
This Power of Attorney is signed by Diwan
Arun Nanda, Chairman & Managing Director For Rediffusion - Dentsu;

Rediffusion - Dentsu, Young & Rubicam ) Young & Rubicam Pvt. Ltd
Private Limited and the Seal of the Company
is affixed pursuant to the resolution passed at the
meeting of the Board of Directors of the Company Diwan Arun Nanda
on 31.3.2010 Chairman &
Managing Director
Accepted as above.
Mr. Bhautik Navinchandra Mithani
(Constituted Attorney)
Ms. Vandna Arora
(Constituted Attorney)
Place: Mumbai
Date: 31.10.2010
MUMBAI BENCH 789

MUMBAI BENCH
MUMBAI
COMPANY PETITION NO. 36 OF 2017
M/s. Rediffusion Dentsu Young
and Rubicam Pvt. Ltd
... Applicant/Operational Creditor
Versus
M/s. Hubtown Limited
... Respondent
CONSENT TERMS
Dated this 23rd day of March, 2017

M/S. MV LAW PARTNERS
Advocates for the Applicant
215-218, Old Bake House,
16/22, Maharashtra Chamber of
Commerce Lane, Fort, Mumbai -400 023.

MUMBAI BENCH
MUMBAI
C.P. No. 34/(MAH)/2017
CA No.
CORAM:
NAME OF THE PARTIES :
HDFC Bank Limited
V/s.
Esskay Motors Pvt. Ltd.
SECTION OF THE COMPANIES ACT: I & BP of the Companies Act, 2013.
1. Sankalp Amantwas Advocate Applicant
2. Vrinda Daga Advocate Respondent
Order
CP No. 34/I&BP/NCLT/MB/MAH/2017
Counsel for the Corporate Debtor filed an Application for withdrawal of the
Insolvency Petition reflecting settlement in between them, accordingly this Petition
is hereby dismissed as withdrawn by looking at the terms arrived in between
them.
Sd/-
Member (Judicial)
Sd/-
V. NALLASENAPATHY
Member (Technical)
Encls: Settlement Agreement dated 10.3.2017.
MUMBAI BENCH 791

MUMBAI BENCH
MUMBAI
INSOLVENCY PETITION NO. 34 OF 2017
HDFC Bank Limited
... Applicant
V/s.
Esskay Motors Private Limited.
APPLICATION FOR WITHDRAWAL OF THE INSOLVENCY PETITION ON
BEHALF OF THE APPLICANT ABOVE NAMED
On behalf of the Applicant above named, it is humbly stated as under:
1. The Applicant had filed Company Petition No. 711 of 2016 before the
Hon’ble High Court, Bombay in the event of the Corporate Debtor’s inability
to pay its debt. The Company Petition stood transferred before this Hon’ble
Tribunal as per Notification G.S.R 1119 (E) dated 7/12/2016. In compliance
of the said notification, the Applicant filed an Application under Section 7
of the Insolvency and Bankruptcy Code, 2016 on 7th February, 2017. The
Petition was listed before the Hon’ble Tribunal on 10th March, 2017 for
admission.
2. In the meantime, the parties after discussions and deliberations agreed
to settle the dispute and the Corporate Debtor agreed to pay the
outstanding amount as per the terms agreed in a Settlement Agreement
dated 10th March, 2017. A copy of the Settlement Agreement dated 10th
March, 2017 is annexed hereto and marked as Exhibit: ‘A’.
3. In view of the aforesaid and the parties settling their disputes, the Applicant
humbly prays that the above Petition be allowed to be withdrawn as per
Rule 8 of the Insolvency and Bankruptcy (Application to Adjudicating
FOR THIS ACT OF KINDNESS THE APPLICANT SHALL EVER PRAY.
Dated this 14th day of March, 2017
FOR M/s. INDIA LAW

SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT is made and entered into at Mumbai on 10th day
of March, 2017
BETWEEN
HDFC Bank Limited, A banking company having its registered office at HDFC
Bank House, Senapati Bapat Marg, Lower Parel (West), Mumbai -400 013 and
having one of its office Department for Special Operations at Peninsula Business
Park, B-Wing, 4th Floor, Dawn Mill Compound, Ganpat Rao Kadam Marg, Lower
Parel, Mumbai, 400 013 through Mr. Sunil Bhanushali, Assistant Vice President -
Legal, and authorized signatory of the bank, of the FIRST PART;
AND
Esskay Motors Pvt. Ltd., a company incorporated under the provisions of the
Companies Act, 1956 and having its registered office at Mezzanine and Ground
Floor, Motilal Oswal Tower, Junction of Gokhale Road and Sayani Road,
Prabhadevi, Mumbai - 25 and having CIN No. U34300MH2011PTC217218, through
its CMD, Mr. Chandra Kalian Parkash, of the SECOND PART.
AND
(1) Mr. Chandra Kalian Parkash, Managing Director & Guarantor of M/s. Esskay
Motors Pvt. Ltd., having address at Flat No. 11 and 12, Maker tower - H Cuffe
parade, Colaba, Mumbai- 400 005, and A-0102, Lodha Bellissimo, Appolo Mills
Compound, N.M.Joshi Marg, Mahalaxmi, Mumbai-400 Oil; (2). Neelam Chandra
Parkash, Director & Guarantor of M/s. Esskay Motors Pvt. Ltd., having address at
Flat No. 11 and 12, Maker tower - H Cuffe parade, Colaba, Mumbai- 400 005 and
A-0102, Lodha Bellissimo, Appolo Mills Compound, N.M.Joshi Marg, Mahalaxmi,
Mumbai-400 Oil; (3). Komal Chandra Parkash, Director & Guarantor of
M/s. Esskay Motors Pvt. Ltd., having address at Flat No. 11 and 12, Maker tower -
H Cuffe parade, Colaba, Mumbai- 400 005 and A-0102, Lodha Bellissimo, Appolo
Mills Compound, N.M.Joshi Marg, Mahalaxmi, Mumbai-400 011; (4). Sheetal
Chandra Parkash, Director & Guarantor of M/s. Esskay Motors Pvt. Ltd., having
address at Flat No. 11 and 12, Maker tower - H Cuffe parade, Colaba, Mumbai-
400005 and A-0102, Lodha Bellissimo, Appolo Mills Compound, N.M.Joshi Marg,
Mahalaxmi, Mumbai-400 011; of the THIRD PART.
WHEREAS
1. Party of the first part herein, being the Financial Creditor, for the sake of
brevity will be referred to as “Bank” ;
2. Parties of the second part herein, being the Corporate Debtor, for the sake
MUMBAI BENCH 793
of brevity will be referred as "Company";

3. Parties of the third part herein, being the directors and guarantors of the
Company, for the sake of brevity will be referred to as “Guarantors” ;
4. The Company approached the Bank to avail Inventory Funding Facility
(AUIF) and the Bank, in accordance with the terms and conditions
mentioned in the Sanction Letter dated 23rd May, 2014 sanctioned an
Inventory Funding (AUIP) Facility for a sum up to Rs.3,00,00,000/- (Rupees
Three Crores Only) (hereinafter referred to as the said “Facility’). The Bank
and the Company thereafter executed a Loan Agreement dated 12th July,
2014, inter alia, recording the terms and conditions including but not limited
to the obligations of the Company under the Loan Agreement along with
other incidental security documents in favour of the Bank including the
Personal Guarantees given by the parties of the third part.
5. The Company availed and utilized the said Facility for its benefit but failed
to repay the amounts due and payable under the said Facility and
committed continuous defaults in the payment of the installments/interest/
principal due as stipulated in the terms and conditions of the Loan
Agreement.
6. The Bank claims an amount of Rs. 1,32,27,784.63 (Rupees One Crore
Thirty Two Lakhs Twenty Seven Thousand Seven Hundred Eighty Four and
Sixty Three Paise only) is due and payable by the Respondent to the
Petitioner as on 30th June, 2016 along with further interest calculated @
24% per annum from the date of the notice until payment and/or realization.
7. Upon default and failure to pay the outstanding amounts by the Company
despite several requests and demands by the Bank, the Bank initiated the
following legal actions against the Company for recovery of the
outstanding amounts as under:
a. Original Application No. 638 of 2016 filed in the Debt Recovery
Tribunal - II, Mumbai;
b. Case No. 1307/SS/2016 under Section 138 of the Negotiable
Instruments Act, 1881;
c. Company Petition No. 711 of 2016 (filed in the Bombay High Court),
which was transferred and tagged with Insolvency Petition No. 34
of 2017 in the National Company Law Tribunal, Mumbai Bench;
8. The parties after detailed discussions and negotiations have agreed to
settle the said Claim for a full and final settlement amount of Rs.
1,32,27,784.63 (Rupees One Crore Thirty Two Lakhs Twenty Seven
Thousand Seven Hundred Eighty Four and Sixty Three Paise only)
(“Settlement Amount”);
9. The parties are desirous of recording the terms and conditions of their
settlement in writing.
NOW THIS SETTLEMENT AGREEMENT WITNESSETH AS UNDER:
1. The Company hereby irrevocably agrees, declares, confirms and
acknowledges that an outstanding amount of Rs. 1,32,27,784.63 (Rupees
One Crore Thirty Two Lakhs Twenty Seven Thousand Seven Hundred Eighty
Four and Sixty Three Paise only) being the amount due and payable by the
Company to the Bank as on as on 30th June, 2016;
2. The Company shall make payment of the Settlement Amount in the
following manner as specified hereunder:
a. Rs.33,00,000/- shall be paid on before 24th March, 2007
b. Rs.33,00,000/- (Rupees Thirty Three Lakhs Only) shall be paid on or
before 10th April, 2017;
c. Rs.33,00,000/- (Rupees Thirty Three Lakhs Only) shall be paid on or
before 24th April, 2017;
d. Rs.33,27,784.63/- (Rupees Thirty Three Lakhs Twenty Seven
Thousand Seven Hundred Eighty Four and Sixty Three Paise) shall
be on or before 10th May, 2017;
3. The Debtor Company has issued and handed over Post Dated Cheques,
details of which are as follows:-
a. Cheque bearing No. 22442 dated 24.03.2017 drawn on Union Bank,
Veer Nariman Branch, Mumbai favouring the Bank in respect of the
instalment mentioned in Clause l.(a) above.
b. Cheque bearing No. 22443 dated 10.04.2017 drawn on Union Bank,
instalment mentioned in Clause 1.(b) above.
c. Cheque bearing No. 22444 dated 24.04.2017 drawn on Union Bank,
instalment mentioned in Clause l.(c) above.
d. Cheque bearing No. 22445 dated 10.05.2017 drawn on Union Bank,
instalment mentioned in Clause l.(d) above.
MUMBAI BENCH 795
4. The Debtor Company agrees that all the post-dated cheques in respect of
the installments mentioned in Clause 1(a) to 1(d) above shall be deposited
by Applicant in their Bank on its respective due dates without any prior
intimation to the Debtor Company and there will not be any request by the
Debtor Company to postpone the date of payment for any reason
whatsoever.
5. In the event of the Debtor Company committing any default in respect of
payment of the amounts as per the aforementioned clauses, the Bank
shall continue with the pending legal proceedings for the remaining
amounts including interest and other applicable charges, which are due
and payable.
6. Upon signing the present Settlement Agreement the Bank shall withdraw
the Insolvency Petition No. 34 of 2017 in the National Company Law
Tribunal, Mumbai Bench;
7. Upon payment of all the installments as mentioned in Clause 1 above, the
Bank shall withdraw the other legal proceedings as follows:
a. the Original Application No. 638 of 2016 filed in the Debt Recovery
Tribunal - II, Mumbai; and
b. Case No. 1307/SS/2016 under Section 138 of the Negotiable
Instruments Act, 1881;
8. Upon payment of all the installments as mentioned in Clause 1 above, the
Company shall withdraw the following:
a. The Counter Claim filed by the Company and its directors in the
Original Application No. 638 of 2016 filed in the Debt Recovery
Tribunal - II, Mumbai
b. The Revision Applications filed in the Sessions Court, Bombay
challenging the issuance of process order in Case No. 1307/SS/
2016 under Section 138 of the Negotiable Instruments Act, 1881 filed
by the Bank.
9. The Company shall not raise any claim against the Bank in respect of said
Facility or otherwise in future.
10. The party of the Second Part (Company) and the Party of the Third Part
party rights in respect of their personal properties until realization of the
entire Settlement Amount as mentioned herein above.
11. Upon receipt and realization of all the installments as mentioned
hereinabove, the Bank shall issue No Due Certificate to the parties of the
Second Part (Company) and the Third Part and discharge them from all
liabilities in respect of the said Facility.
12. Upon receipt and realization of the full and final payment of the Settlement
Amount, the party of the First Part will not have any claim against the
personal properties of parties of the second part and the third part, i.e.
either of the borrower (Company) and/or guarantors in any manner
whatsoever.
13. The present Settlement Agreement is signed by all the parties by their free
will and without any coercion or undue influence being exerted upon
them.
14. The present Settlement Agreement is executed without prejudice the
right of the Applicant to initiate fresh Insolvency Proceedings in respect of
the aforesaid Claim, in the event the Debtor Company commits any default
in respect of payment of amounts as per the aforementioned clauses.
IN WITNESS WHEREOF the parties hereto have hereunto set and subscribed their
respective hands to the day and year first hereinabove written.
SIGNED, SEALED AND DELIVERED by
The within-named
HDFC Bank Limited
through Mr. Sunil Bhanushali, authorized
signatory of the Bank
In the presence of ........................
SIGNED, SEALED AND DELIVERED by
The within-named
Esskay Motors Pvt. Ltd,
through Mr. Chandra Kalian Prakash
In the presence of .........................
Chandra Kalian Parkash
Neelam Chandra Parkash
Komal Chandra Parkash
MUMBAI BENCH 797

Sheetal Chandra Parkash
CERTIFIED TRUE COPY OF THE EXTRACT FROM THE MINUTES OF THE MEETING OF
THE BOARD OF DIRECTORS OF M/S. ESSKAY MOTORS PRIVATE LIMITED, GROUND.
& MEZZANINE FLOOR. MOTILAL OSWAL TOWER, JUNCTION OF GOKHALE AND
SAYANI ROAD, PRABHADEVI, MUMBAI 400025 HELD ON 10th MARCH, 2012
The Chairman cum Managing Director [CMD] Mr. C.K. Parkash informed the Board
that the matter of the inventory funding facility of Rs. 1,32,27,784.63/- provided by
HDFC Bank Limited was required to be settled in terms of the initialed draft of the
SETTLEMENT AGREEMENT put to the Board. The CMD was required to sign the
settlement agreement for and on behalf of the Company and Mr.C.K.Parkash,
Mrs. Neelam C.Parkash, Ms Sheetal C. Parkash and Ms. Komal C. Parkash were
requested to sign the said settlement agreement as guarantors.
RESOLVED :
That the Chairman cum Managing Director Mr. C.K. Parkash be and is hereby
authorized to sign the settlement agreement for and on behalf of the Company
and Mr.C.K.Parkash, Mrs. Neelam C.Parkash, Ms Sheetal C. Parkash and Ms,
Komal C. Parkash were requested to sign the said settlement agreement as
guarantors.
The common seal of the Company be affixed in the presence of Mr. C.K.PARKASH
on all the necessary documents.
Certified True Copy
Esskay Motors Pvt Ltd.
Director

MUMBAI BENCH
MUMBAI
INSOLVENCY PETITION No.34 OF 2017
HDFC BANK LTD.
... Applicant
V/s.
ESSKAY MOTORS PRIVATE LIMITED.
....Debtor Company
APPLICATION FOR WITHDRAWAL
Dated this 14th day of March, 2017
M/s.INDIALAW
Ground Floor, Apeejay Chambers
Wallace Street, Fort,
Mumbai - 400 001.
Tel. No.22197400
MUMBAI BENCH 799

MUMBAI BENCH
MUMBAI
MA No.48/2016 IN C.P. NO. 04 /I&BP/NCLT/MB/MAH/2017
Coram:
B.S.V. Prakash Kumar, Member (Judicial) &
Rules 2016 And
J.J. PLASTALLOY PVT. LTD.
.... Applicant.
v/s.
MILTECH INDUSTRIES PVT. LTD.
... Respondent
Applicants' Counsel: Mr. Ashutosh Kamat a/w Mr. Prasad Shenoy, Advocates for
the Applicant.
ORDER
The Petitioner filed this MA 48/2016 for recalling the order of dismissal for default
passed by this Bench on 19.1.2017 in CP 4/2017 filed u/s. 9 of I&B Code and for
restoration of the same.
2. The petitioner having filed this CP u/s.9 of I&B Code on 12.1.2017, it came up for
hearing on 18.1.2017, on the said date, when none present from the petitioner
side, this Bench passed an order stating that "none present on behalf of Applicant",
accordingly listed this matter for hearing on the next day 19.1.2017 with a direction
that in the event the Applicant remained absent on the next day, CP would be
dismissed for default. When the matter came up for hearing on the following day,
again the Petitioner remained absent whereby this Bench dismissed the Petition
for default on 19.1.2017.
3. Since this Petition was dismissed for default on 19.1.2017, now this Petitioner
has filed this Recall and Restoration Application on 24.2.2017 stating that at the
time of filing Company Petition the Court Clerk orally informed the concerned
Advocate Clerk that date of hearing would be informed as soon as posted for
hearing. The Applicant/petitioner further states that when the said Clerk made
inquiries about the status of the above Company Petition, the Court Clerk used to
repeat the same saying it would be informed to him.
4. The Applicant says that the Advocate appearing on behalf of the Applicant
was shocked by seeing the letter dated 8.2.2017 from this Tribunal and the order
dated 19.1.2017 dismissing the Company Petition on 19.1.2017.
5. The Applicant submits that the Advocate Clerk was diligently following up with
this Tribunal right from filing of the Company Petition recalling the status of the
above Company Petition. The Applicant has gone ahead saying that this Tribunal
clerk orally informed the Advocate Clerk that a notice would be issued to the
Advocate in respect of scheduled date of hearing again, but on seeing an order
dated 19.1.2017, the Advocate of the Applicant was shocked and surprised to see
the matter being listed on 18.1.2017 and 19.1.2017 without the applicant being put
to notice of hearing. This Applicant says that the Advocate had no reasonable
belief whatsoever that the above Company petition would be listed for hearing
prior to being informed to the advocate on record. The Advocate for the Applicant
could not get any reasonable opportunity whatsoever to appear before this Bench
when the Company petition was listed on 18.1.2017 and 19.1.2017. Since the
orders dated 18.1.2017 and 19.1.2017 had been passed without prior information
either to the Applicant or the Advocate, the Applicant filed this Application for
recalling and restoring the Company Petition.
6. Today, the Counsel appearing on behalf of the Petitioner submits that this
Company petition may be restored by invoking Rule 48(2) of NCLT Rules on the
ground that the procedural aspects in relation to I&B proceedings have to be
considered in accordance with NCLT Rules in view of the amendment taken out
to section 424 of the Companies Act, 2013. The Applicant/Petitioner Counsel
submits that since procedure before the Tribunal and the Appellate Tribunal being
governed by Section 424 and Rules prescribed thereto, dismissal of this CP has to
be construed as dismissal u/r 48(1) of NCLT Rules and when this dismissal falls u/
r 48(1) of the NCLT Rules, then it has to be construed that this Application filed for
Restoration of the IB petition will obviously be governed by Rule 48(2) devised for
Restoration of the petition dismissed for default.
7. The Applicant Counsel further submits that procedural law is always
supplemental to substantive law, thereby if at all any Application is dismissed for
default and when sufficient cause has been shown for restoration, then it shall be
restored if it is filed within 30 days from the date of the dismissal order, since the
present application has been filed within 30 days, it shall be restored on there
being a sufficient cause for the absence of the counsel on the date of hearing.
8. As to the pleadings and arguments of the Counsel saying that the Advocate
Clerk had been put to impression that the Advocate would be informed about
MUMBAI BENCH 801
listing of the matter by the Registry of NCLT, we do not find any merit in such
argument because daily cause list is uploaded on daily basis one day before the
date of hearing, accordingly this matter was also uploaded on 18.1.2017, as the
applicant/applicant counsel remained absent, the matter was posted to the
following day by uploading next day cause on the same day. Since the cause list
being timely uploaded on the web site of NCLT, the advocates filing cases ought to
visit website as to whether matter has been posted for hearing or not, that has
admittedly not happened. On the next day also, neither the petitioner nor its Counsel
present. Therefore, this arguments saying that the Clerk making inquiries and the
Registry of NCLT Mumbai not sending communication to the applicant or its counsel
will not be relevant or sufficient cause to the counsel failed to appear for the hearing.
9. Ever since, Insolvency and Bankruptcy Code has been notified, this Bench has
been taking up the matters and passing orders as and when the matter has
come up before this Bench unless and until parties seek adjournment either on
the ground of short of compliance or for making further submissions in relation to
this case. That adjournment is also hardly for one or two days because this Code
mandates this Bench to pass orders under sections 7,9 and 10 of the Code within
14 days from the date of filing of filing the Petition.
10. This Bench also makes it clear that when matter showing up in the cause list
reflecting on the Website of NCLT, it has to be considered as a judicial notice to the
parties to appear before this Bench on the date the matter is listed, here, for the
sake of convenience of the Applicant, though the party remained absent on
18.1.2017, this Bench posted this matter to the following day hoping that the
Applicant would appear on the following day, but on the following day also, the
Applicant Counsel remained absent. It is understandable if a case is heard and
passed orders against Respondent side in his absence without notice, then the
Respondent could come complaining order has been passed against him behind
the back of him, because there would not be any occasion to presume that a
case would be heard against Respondent without being informed of, here no
such presumption could be raised in favor of the applicant, because the applicant
being the person filed case, he/she/it has to remain diligent to pursue when
would his case be posted for hearing.
11. If this Bench restores this Company Petition basing on Rule 48 (2) of NCLT
Rules, then it will be in violation of the time lines given under I&B Code. This Court
makes it clear that order has to be passed within 14 days from the date of filing of
CP either under Sec.7 or Sec.9 or Sec.10 of I&B Code, if today this petition filed on
12.1.2017 is restored, it would be undoubtedly beyond 14 days of the life given in
the statute. In view of this predicament, this Bench is doubtful as to whether Rule
48(2) is to apply for restoring the CP dismissed for default. If it is restored, it will
become repugnant to the time period given under the Code. If it is not restored,
then it will be non-application of the restoration power given to this Bench under
Rule 48(2) of NCLT Rules. Since the former action i.e. restoration of this Company
Petition being repugnant to the Code itself, this bench is of the view that the
procedure always being subservient to the substantive law, as quoted by the
Applicant Counsel, this Bench has to go by the Sections of Law rather than the
procedural Rules mentioned under Rule 48(2) of NCLT Rules.
12. Once Company Petition is filed under any of the provisions namely Sections 7
to 10 of the I&B Code, the parties and the Advocates appearing on behalf of the
parties must be diligent to appear on the dates given and it is not possible for any
Court to inform the parties about the date of hearings. Since Cause-List has been
timely uploaded, it is the duty of the parties filing cases to find out as to whether
their matters are listed in the cause list or not.
13. This Bench, notwithstanding the cause shown in the Application for Restoration,
holds that restoration of a petition dismissed for default is against the letter and
spirit of the Code, hence this application is hereby dismissed. The Petitioner is
always at liberty to opt for other remedies available in accordance with the law.
14. The Petitioner Counsel relied upon the Raj Kishore Pandey v. State of Uttar
Pradesh & Others (2009) 2 SCC 692 to say that Court shall not decline to grant
the relief sought in Restoration Application when petition is dismissed for default
on the ground that reasons stated in Affidavit accompanied to Restoration
Application, because restoring the petition dismissed for default has to be
exercised on sound principles and not on mere technicalities.
15. On perusal of the citation supra, it is a restoration application filed in a Writ
Petition, should I & B Petition dismissed for default be restored when law says I &
B petition should be heard and pass orders within 14 days by admitting or
dismissing it. I & B petition shall be brought to logical end in 14 days, unless and
until it is extended by this Bench for the reasons mentioned therein. Once the
proceeding is initiated under any of the three Sections of the Code mentioned
above, it has to be completed within 14 days, since the life to the Petition u/s 7, 9
&10 remains for 14 days from the date of filing, this Bench cannot bring forth life to
the said petition by restoration when its life itself is designed for fourteen days. If
fresh life is given to it in the name of restoration after those 14 days, it will be in
violation of the lifetime of 14 days given u/s.7(4), 9(5) & 10(4) of the Code.
16. In view of the reasons mentioned above, this Application is hereby dismissed.
Sd/- B.S.V. PRAKASH KUMAR

Member (Judicial)
Sd/- V. NALLASENAPATHY
Member (Technical)
MUMBAI BENCH 803

MUMBAI BENCH
MUMBAI
Coram:
& V. Nallasenapathy, Member (Technical)
2016)
And
Mrs. Seema Gupta
...Applicant
V/s.
M/s. Supreme Infrastructure India Ltd. & Ors.
...Corporate Debtor
Applicants' Counsel : Mr. Zain Mookhi, Mr. Nau Ali Rizvi, Advocates for the
Applicant.
Respondent Counsel : Mr. Farhan Dubash, Mr. Rohaneel Mohite, Advocates for
the Corporate Debtor/ Respondent.
ORDER
The petitioner filed this Company Petition u/s. 9 of the I&B Code stating that this
Petition is filed basing on statutory notice issued on 6.10.2016 u/s.434(1)(a) of the
Companies Act, 1956 stating that Debtor Company agreed that it would construct
residential house (farm house) as well as other ancillary building for a total
amount of Rs.7 crore, for which, at request of the Corporate Debtor, the petitioner
advanced Rs.5 crores out of total amount of Rs.7 crore through RTGS payments
on 19.3.2013, 25.5.2013 and 19.10.2013. When the Corporate Debtor failed to
undertake construction of the farm house as agreed between them, the
Operational Creditor i.e. Petitioner herein made several requests asking the
Corporate Debtor to start work immediately or else return the entire amount of
Rs.5 crore to them immediately along with interest at the rate of 24% p.a.
2. As the Corporate Debtor failed to construct the Farm House as agreed between
the parties, the Corporate Debtor made part payments of Rs.88 1akhs by a demand
draft and Rs. 26 1akhs through RTGS as part refund towards the money paid by
Petitioner herein. As to remaining balance of Rs.3.86 crore along with interest, for
there being no response from the Corporate Debtor, the Petitioner issued this
statutory notice dated 6.10.2016 u/s.434 of the Companies Act, 1956, calling
upon the petitioner to repay the debt or else the petitioner would seek remedy for
winding up of the company by invoking sections 433 & 434 of the Companies Act
1956.
3. For no repayment being made, the Petitioner on 4.1.2017 filed before winding
up petition u/s 271(1) & 271(2) r/w section 272 of the Companies Act, 2013 before
this Tribunal for winding up of the company for the Corporate Debtor is unable to
discharge the debt of the Petitioner herein.
4. Soon thereafter, the Petitioner, on 21.2.2017, filed an Application Form u/s.9 of
I&BP Code for initiating the insolvency resolution process against the Corporate
Debtor in continuation of the petition already filed u/s.271 and Sec.272 of the
Companies Act, 2013.
5. Now the objection from the Corporate Debtor side is that this Company Petition
was initially filed u/s.271 & 272 of the Companies Act, 2013 basing on the statutory
notice dated 6.10.2016 issued u/s.434(1A) of Companies Act, 1956, therefore, this
Petition sans cause of action that is required for filing petition u/s.9 of I&BP Code,
because the cause of action for initiating insolvency resolution process will arise
on the notice given u/s 8 of I&B Code, 2016, for no notice has been given before
filing this Application Form u/s 8 of the code, no petition will lie u/s.9 of I&BP Code
2016, henceforth the counsel for corporate debtor submits, this Petition is liable to
be dismissed in limine.
6. On hearing the submissions from Corporate Debtor Counsel, the Petitioner
Counsel propounded his argument stating on two points,
One - that non-issuance of notice u/s 8 for filing petition u/s 9 is a curable defect
in contemplation of the proviso to Sec.9 (5) of I&BP Code, because this Tribunal
shall before rejecting this petition under sub-clause (a) of clause (ii) give notice to
the petitioner to rectify the defect in the petition within 7 days of the date of such
notice from this Tribunal. For an opportunity shall be given to rectify the defect in
the petition before rejecting it, if time is given to the Petitioner Counsel as stated
in the proviso, the Petitioner will issue notice u/s 8 of I&BP Code and file the same
before this Bench.
Two - since the Petitioner on 6.10.2016 issued notice u/s.434 (1) (a) of the
Companies Act 1956 when old Act was in force, the issuance of such notice shall
be construed as continuation of cause of action to filing this petition u/s 9 of the
MUMBAI BENCH 805
Code as all the legal consequences that flow from the above notice issued on
6.10.2016 will remain in force even after repeal of the Companies Act 1956 or
after amendments to section 271 & 272 of the Companies Act 2013. To say that all
legal consequences flow from notice issued under old enactment are saved by
saving and repeal section 465 of the Companies Act 2013 and section 6 of the
General Clauses Act, for which, the counsel relied upon the citation Universal
Imports Agency v/s. The Chief Controller of Imports & Exports and Others. (1961
AIR 41)
7. Basing on these two grounds the petitioner counsel submits that this
maintainable u/s. 9 of I & B Code despite no notice has been issued under
8. On perusal of the submissions placed by either side, this Bench has noticed
that this Petitioner initially issued notice on 6.10.2016 under section 434 (1) (a) of
the Companies Act, 1956 to move petition u/s.433 & 439 of Companies Act, 1956.
But instead of filing winding up petition u/s.439 of the Act 1956 after completion of
three weeks' notice time given to the company to repay the due mentioned in
notice, in the month of January, this petitioner, on the strength of the notice dated
6.10.2016 issued to the debtor company, mistakenly filed winding up Petition
before this Bench u/s 272(1) (b) of the Companies Act, 2013. The Petitioner might
not be aware of the fact, by the time this winding-up petition was filed u/s.272(l)
(a) of the Companies Act, 2013, legislature, on 1st December 2016, already
amended section 272 (1) (a) of the companies Act 2013 converting winding up
proceedings into insolvency and bankruptcy proceedings by simultaneously
bringing Insolvency and Bankruptcy Code 2016 into force on 1st December 2016.
By virtue of this notification, from 1st December 2016, the creditors or debtors,
who were to initiate winding-up proceedings should initiate Insolvency Resolution
Process as envisaged under I & B Code, not either under the Companies Act 1956
or under section 272 of the Companies Act 2013. The petitioner, knowingly or
unknowingly, filed this Winding-Up Petition u/s 272 of the Companies Act, which
was not in existence by the time this petition was filed. The outcome is, the
petitioner filed it under a section that was not in force by the time of filing. Therefore,
the Petition filed u/s 272 cannot be treated as petition remained in force until form
has been filed under IB Code. In between filing petition u/s 272 and filing form
under section 9 of IB Code, limitation for filing case has been expired, therefore,
the Petition filed u/s.271 (1) will not give any life to the form filed under IB Code.
9. Thereafter the petitioner having realized that the Petitioner could not file this
Petition u/s.272 of the Companies Act 2013, she filed Form - 5 under I & B Code
to show this Petition as continuation to the petition filed u/s.272 of the Companies
Act, 2013. We must also make it clear that issuing notice under old Act could not
be considered as thing done to save the limitation, limitation will be saved only
when legal proceeding is initiated within limitation. The petitioner has never
initiated any valid proceeding till date, she could not have filed it under section
272, which had never come into force. No valid proceeding had been initiated
before limitation, the form filed u/s 9 of IB Code after expiry of limitation is also not
backed by notice under section 8 of IB Code.
10. It is a fact known to everybody, that since 1st December 2016, whoever has
been felt aggrieved to move winding up proceedings is supposed to move I&B
petition before NCLT save and except the cases remain continuing u/s 439 of the
Companies Act 1956. The procedure that applied for transfer of the winding up
petitions from the High Courts to NCLT is that the cases where court notice has not
been issued were transferred to NCLT to take up the same under Insolvency &
Bankruptcy Code by taking forms under the Code. The present case is not a
transferred case from High Court.
11. If at all grievances to raise u/s 9 of I&BP Code, the Operational Creditor has to
issue notice u/s.8 of the I&BP Code and he has to remain waited for 10 days after
issuing notice, if no reply has come from Corporate Debtor to the notice sent by
the Petitioner or if reply has come from Petitioner, then creditor is entitled to move
Petition u/s.9 of the I&BP Code. Here, no notice has been given u/s.8 of I&BP
Code, therefore, no cause of action arose to file Operational Creditor Company
Petition u/s. 9 of I&B Code.
12. To get over this defect, the Petitioner counsel relied upon Section 6 (b) of
General Clauses Act 1897 to state that the repeal shall not affect the previous
operation of any enactment so repealed or anything duly done or suffered there
under. Since notice being given under repealed Act, it has met the requirement of
giving notice u/s 8 of I & B Code, therefore this petition, the counsel says, shall not
be dismissed on the ground notice not given under section 8 of the Code. He
submits that since notice has been given u/s 434(1)(a) of the repealed Act, it has
to be treated as an act or thing done when repealed enactment was in force in
respect to these sections, therefore the thing done under repealed Act is saved
under section 6 (b) of the General Clauses Act 1897 and under section 465 of the
Act 2013 and shall be treated as continuation of the proceedings before NCLT.
13. The Petitioner's Counsel further relied upon two more citations, namely
Balasaheb Anantrao Bahirat vis. Rohidas Bapusaheb Tupe (2007 (3) MH L.J.) and
D. Prema Jhansi Rani 2.D. Raja Sampath Kumar 3. Selvi Esterv/s. N. Shrivijaum
(2012 (4) CTC 481) to say that filing a case under wrong provisions of law will not
make the case invalid if the substance of the case reveals that the facts can be
taken in to cognizance under new provision of law. It is true wrong provision of
law will not make any case invalid, but if the case filed by the party is hit by the
MUMBAI BENCH 807
Limitation and new section of law demands compliance different from the old
section of law and such application cause prejudice to the right of the adverse
party then wrong filing is certainly a material defect and that has to be treated as
filed without accrual of any cause of action.
14. If the facts of the present case are seen in the light of the section 6 of the
General Clauses Act, the Petitioner since issued a notice on 6.10.2016 by the time
old Act was in force, he was very much entitled to file Company Petition u/s. 433
of the repealed enactment after completion of three weeks' notice time, but she
did not avail that opportunity. From 1.12.2016 onwards, the petitioner was also
entitled to file Bankruptcy Petition basing on the cause of action arose under the
old Act that has also not been done. Instead of initiating proceedings under I&BP
Code, she filed CP u/s 272 of Companies Act, 2013 without any backing of law in
force, because by the time the right for creditor to file winding up Petition u/s.271
and 272 of the Companies Act 2013 was already taken away, therefore, as said
above, this petition has no force in the eye of law.
15. The petitioner when filed the present petition u/s. 272 of the Companies Act
2013, that petition is invalid for it has been filed under invalid law. By the time
Form-5 filed under section 9 of the code, the claim is already time barred, it goes
without saying that no cause of action continuing by the time Form-5 filed. This
application is not only not backed by notice under section 8 but also barred by
limitation. It is a known proposition that the aggrieved party is under obligation to
initiate legal proceedings within the limitation envisaged under Limitation Act. It
need not be said separately that even if notice given under 434 (1) (a) of the
Companies Act 1956 is assumed as valid, such notice will not save the limitation
unless petition is filed within limitation.
16. This Bench makes it clear that cause of action arose u/s.9 only after issuing
notice u/s.8 of the I&BP Code, unless such cause of action is arisen, the Petitioner
is not entitled to file petition, therefore it cannot be labeled as curable defect to
take time to give notice after filing u/s.9 of I&BP Code. As soon as the Petition is
filed, within 14 days from thereof, this Bench has to declare moratorium if at all
petition is maintainable, if for any reason mentioned u/s 9 (2) of the Code the
petition is short of compliance, this Bench may give 7 days' time under proviso to
section (9) (5) (ii) of the Code to cure that defect if the application made under
subsection (2) of the section 9 is not complete. This time of 7 days can be given
only in a case when application is not filed in the form and manner and not
accompanied with fee prescribed, not in respect to other aspects mentioned in
section 9 (5) (ii) (b-e) of the Code. Therefore, the defect falling under section 9 (5)
(ii) (a) is only curable defect; the time given for such curation cannot be extended
to other situations. When explicit mandate is there u/s.9 saying that party is
entitled to file petition u/s.9 only after issuing notice, such party cannot now come
to say before this Bench that since she has already filed the Company Petition,
she will give notice to the Corporate Debtor if at all the Petitioner is given time to
give such notice to other side.
17. For filing petition u/s 9 of the code, section 8 notice shall be given, for that
reason only, section 9 starts with saying "after the expiry of the period of 10 days
from the date of delivery notice or invoice ", it cannot be assumed as application
u/s 9 can be filed without giving notice or invoice demanding payment u/s 8 (1) of
the code.
18. If we look into section 243 of the IB Code speaking about Repeal of certain
enactments and savings, it speaks about repealing Presidency Town Insolvency
Act 1909 and Provincial Insolvency Act 1920 in subsection -1 and in subsection -
2 &3 speaks about repealed enactments and enactments mentioned in Schedule
to this Code, it has not been mentioned about the repealed Companies Act 1956.
The only silver lining is application of section 6 of the General Clauses Act 1897,
but that application has already been distinguished stating that by the time IB
proceeding is initiated the claim has gone beyond limitation, issuing legal notice
on 6.10.2016 will not save the limitation and the petitioner did not initiate legal
proceeding in continuation to the notice issued u/s 434 of the old Act.
19. Here, issuing legal notice cannot be seen as document to support the claim
of the Petitioner, issuance of a notice u/s 8 of the Code is an act that has to be
done before filing the Petition u/s.9, therefore, non-filing of a notice will not come
within the sub-section (5) of section 9, therefore, this Petition is not maintainable
and it is also further held that issuance of notice on 6.10.2016 u/s.433 (l)(a) cannot
not be construed as an action saved u/s. 6 of General Clauses Act for the reasons
mentioned above, therefore, Petition is dismissed.
20. If any other application is pending before this Bench, that is hereby closed.
Sd/-
Member (Judicial)
Sd/-
V. NALLASENAPATHY
Member (Technical)
MUMBAI BENCH 809

MUMBAI BENCH
MUMBAI
Coram:
B. S.V. Prakash Kumar, Member (Judicial)
Between
M/s. Essar Projects India Ltd.
... Applicant
V/s.
M/s. MCL Global Steel Pvt. Ltd.
For Applicants: Mr. Ankoosh Mehta Adv. a/w Adv. Aviral Sahai i/b, Cyril Amarchand
Mangaldas Advocates for the Applicant/Petitioner.
ORDER
The Operational Creditor namely Essar Projects India Ltd (EPIL) has filed this
Operational Creditor Petition stating that the Corporate Debtor Company MCL
Global Pvt. Ltd (MCL) has defaulted in repaying a sum of Rs.9,10,60,788/- and
hence this Petition under section 8 & 9 of the I&BP Code r/w Rule 6 of Insolvency
and Bankruptcy (Application to adjudicating authority) Rules, 2016 for initiation of
Corporate Insolvency Resolution process.
2. The petitioner says that the corporate Debtor (MCL) and the Petitioner (EPIL)
entered into a Memorandum of Understanding on 27.6.2013 wherein MCL had
appointed EPIL to carry out civil work, structural fabrication and erection of building
and sheds and the erection of technological equipment as part of construction of
0.2 MTPA Steel Melt Shop Complex at Pithampur, Dist. Dhar, Madhya Pradesh.
EPIL raised invoices for the works successfully completed by November 30, 2014
which was agreed between the parties and a substantial portion of the invoice
raised currently remains outstanding. It is further stated that a sum of

Rs.6,72,03,097/- is due towards unpaid invoices and a sum of Rs.2,38,57,691/-
interest at the rate of 18% p.a. as on 30.11.2016 aggregating to Rs.9,10,60,788/-
The details of invoices and the amount due along with interest is enclosed as
Annexure - E to the Petition.
3. The EPIL has sent many letters to MCL asking them to make the repayment, in
furtherance of it, EPIL, on 28.12.2016, has issued a statutory notice against MCL
under the Bankruptcy Code, 2016 attaching the invoices with a demand for
repayment of a sum of Rs.9,26,40,255/-. In response to it, MCL on 03.01.2017,
replied saying that the contents of the notice are incorrect, misleading, therefore,
denied and further added that the remedy under section 8(1) and 9 of I&BP Code,
2016 are not available to EPIL to institute corporate insolvency proceedings for the
reason that, MCL seriously disputes the amount, because there is a dispute
regarding the quality of construction, the timeline of construction, loss due to
delay in construction, work completion certificate is also not issued by MCL, apart
from this, outstanding bills have not been verified and satisfied, therefore MCL
further says, there are serious disputes about enforceability of the Contract between
them and the amount to be recovered is not admitted by MCL as alleged by EPIL,
etc. Subsequently, on 30.01.2017, EPIL sent a revised demand notice to MCL
demanding a sum of Rs.9,10,60,788/- comprising the invoice amount
Rs.6,72,03,097/- and the interest at the rate of 18% p.a. on the dues upto 30.11.2016
which works out to Rs.2,38,57,691/-, in total Rs.9,10,60,788/-. The said notice
also discloses that the date of invoice, due date, invoice Number, amount
outstanding, interest and the total outstanding.
3(12) of I&B Code, 2016. The Operational Creditor, on the occurrence of default,
issued notice u/s.8(1) to the Corporate Debtor on 28.12.2016 which was received
by it on 29.12.2016. The reply of the Corporate Debtor dated 03.01.2017 has raised
the dispute, which was never raised before the issuance of the statutory notice by
the Operational Creditor. Here, it is to be noted that the invoices were raised on
04.07.2014, 05.08.2014, 01.10.2014 & 10.01.2015, and that the Corporate Debtor
has not raised objection disputing the existence of debt nor filed any civil suit or
other proceedings against the Operational Creditor in respect to the default amount
mentioned here. However, when the statutory notice u/s.8(1) was issued on
28.12.2016, the Corporate Debtor disputed the liability as mentioned supra.
5. Since the Debtor raised the dispute in the reply to notice u/s 8, let us see the
relevant provisions of Sections 5 (6) and 8 of I & B Code:
Section 5(6) provides that "dispute" includes a suit or arbitration proceedings
MUMBAI BENCH 811
relating to –
8(1). An operational creditor may, on the occurrence of a default, deliver a
notice of the operation creditor -
relation to such dispute.
(b) the repayment of unpaid operational debt."
6. The Petitioner Counsel submits, to say that dispute is in existence, mere
mentioning in the notice that dispute is in existence in relation to impugned debt
is not sufficient, the corporate debtor has to prove that the Company already
raised such dispute either in court proceeding or Arbitration before receipt of
notice u/s 8 of the Code, here no such proceeding being pending before any
court of law or in Arbitration proceeding before receipt of the notice supra, the
debtor company merely mentioning dispute in the reply to the notice u/s. 8 will
not amount to dispute in existence, hence the counsel for the petitioner prays this
Bench to admit the petition by construing no dispute is in existence against the
debtor as on the date of receipt of notice u/s. 8 of the Code.
7. Since the Corporate Debtor, as stated by the Petitioner, admitted issuing invoices
in relation to the amount mentioned, the grievance remained in the reply would
be regarding quality of construction, the timeline of construction, loss due to
delay in construction etc. Since the same is not disputed before any court of law
before receipt of notice issued u/s. 8 of the Code, the dispute raised in the corporate
debtor reply to the notice u/s. 8 of the Code cannot be treated as dispute in
existence at the time of receipt of the notice u/s 8 for two reasons, one - due to
admission of raising invoices and two - due to raising it as dispute in the reply
only after notice u/s 8 has been issued.
8. On perusal of definition of dispute u/s 5(6) and on perusal of section 8 (2)(a), it
is evident that “dispute in existence" means and includes raising dispute in court
of law or Arbitral Tribunal before receipt of notice u/s 8 of the Code.

9. The Corporate Debtor has named CA Hashmukh Bhavanji Dedhia, Level 19,
Sunshine Tower, Senapati Bapat Marg, Elphinstone Road, Mumbai -400013, Mah.
Email: hasmukh@kkc.in, Registration No.IBB/IPA- 01/2016-17/64 as Interim
Resolution Professional and also obtained his consent and there are no disciplinary
proceedings pending against him.
10. As to the Petition filed by the Operational Creditor, this Bench, on perusal of
this documents filed by the Creditor, it is evident that the Corporate Debtor defaulted
in making payments as mentioned above, the disputes raised by the Corporate
Debtor are not sustainable, therefore the petition under sections 8 & 9 are taken
as complete, accordingly this Bench hereby admits this petition declaring
moratorium period.
the case may be.
Code.
MUMBAI BENCH 813
6. That this Bench hereby appoints CA Hashmukh Bhavanji Dedhia, Level

19, Sunshine Tower, Senapati Bapat Marg, Elphinstone Road, Mumbai -
400013, Mah. Email: hasmukh@kkc.in, Registration No.IBB/IPA-01/2016-
17/64 as interim resolution professional to carry the functions as
Sd/-
Member (Judicial)
Sd/-
V. NALLASENAPATHY
Member (Technical)

MUMBAI BENCH
MUMBAI
C.P. NO. 21/1 & BP/NCLT/MB/MAH/2017
IN THE MATTER OF INSOLVENCY AND BANKRUPTCY CODE, 2016
SECTION 9
Coram:
IN THE MATTER OF
URBAN INFRASTRUCTURE TRUSTEE LTD.
...FINANCIAL CREDITOR
Versus
NEELKANTH TOWNSHIP AND CONSTRUCTION PVT. LTD.
...CORPORATE DEBTOR
Applicant Counsel: Shri. Navroz Seervai, Sr. Counsel, Mr. Arif Doctor, Counsel a/
w Advocate Ms. Nirali Chopr, Advocates for the Applivant.
Respondent Counsel: Shri. J. P. Sen, Sr. Counsel a/w Mr. Rohan Rajadhyaksha,
Ms. Nidhi Singh, Ms. Chaitrika Patki, Advocates for the Respondent.
ORDER
(Heard on 28.02.2017)
(Pronounced on: 01.03.2017)
1. The Petitioner namely, Urban Infrastructure Trustees Ltd., filed this Petition
against the corporate debtor namely Neelkanth Township and Construction Pvt.
Ltd. to initiate corporate insolvency resolution process u/s. 7 of the Insolvency
and Bankruptcy Code 2016 on the footing that the corporate debtor failed to
redeem the debenture certificates issued by the corporate debtor on
26.12.2007,15.02.2008 and 30.03.2009.
2. The Petitioner submits that the corporate debtor company issued debenture
certificate comprising 127000 debentures of 0% optionally fully convertible
debentures of Rs.100 each of the aggregate value of VL.TJ crores all ranking pari
pasu inter se made the authority of memorandum and articles of association of
the company and the resolution passed by the Board of Directors of the company
at its Board meeting held on 26.12.2007.
MUMBAI BENCH 815
3. Likewise, the corporate debtor on 15.02.2008 issued another debenture

certificate comprising 124000 debentures comprising 0% optionally fully
convertible debenture of Rs.100 each of the aggregate value of Rs.1.24 crores all
ranking pari pasu inter se made the authority of memorandum and articles of
association of the company and the resolution passed by the Board of Directors
of the company at its Board meeting held on 15.02.2008.
4. Again, the corporate debtor on 30.03.2009 issued another debenture certificate
comprising 4849000 debentures comprising 1% optionally fully convertible
debenture of Rs.100 each of the aggregate value of Rs.48.49 crores all ranking
pari pasu inter se made the authority of memorandum and articles of association
of the company and the resolution passed by the Board of Directors of the company
at its Board meeting held on 30.03.2009.
5. So the total money the petitioner invested in all these debentures have come
to 51 crores. In the terms and conditions of the debenture certificate, a redemption
clause has been inserted saying that in the event the debentures are not converted
within a period of 60 months from the date of allotment the company shall redeem
the same together with interest, if any payable thereon. The Petitioner says these
debentures have not been redeemed despite due date of maturity has been
lapsed and the company has not even converted these shares into equity.
6. The Petitioner has submitted in part IV of Form 1 that the amount claimed to be
in default as Rs.226,16,79,437 as to date on which default occurred is shown as
26.12.2012 for debentures issued on 26.12.2007,14.02.2013 for the debentures
issued on 15.02.2013, and 30.04.2011 for the debentures issued on 30.03.2009.
7. Now the case of the Petitioner is that though the principal and the interest has
come to Rs.226,16,79,437, since default occurred to the principle amount of
Rs.51crores, the Counsel says, the Petitioner filed this company petition showing
default occurrence to the principal amount alone i.e. Rs.51crores. But in the form
that has been filed by the Petitioner, in column no.2 of part 3, the petitioner has
categorically mentioned the amount claimed to be in default is Rs.226,16,79,437
making an annexure to this company petition showing principal amount as
Rs.51crores and principal amount along with interest of Rs.226,16,79,437 as
claim amount in default.
8. To make it clear what the petitioner has asked in the petition, I hereby place
column no.2 of part 4 hereunder,
Form No.l
Part - IV
Particulars of Financial Debt
1. Total amount of debt Rs.51,00,00,000 Being The Aggregate
granted Value of:
(i) 1,27,000 Optionally Fully Convertible
Debentures of Rs.100 Each Are
Unsecured;
(ii 1,24,000 0% Optionally Fully
Convertible Debentures of Rs.100 each
are unsecured; and
(iii) 48,49,000 1% Optionally Fully
Convertible Debentures ('OFCDs') of
Rs.100 each are unsecured.
2. Amount claimed to be Rs. 226,16,79,437
in default and the date
on which the default See Annexure - "2"
occurred (Attached the
workings for
computation of amount
and days of default in
tabular form)
9. By looking at column 2, the amount claimed to be in default and the occurrence
of default cannot be different to each other, both have to be one and the same,
because the word "the default occurred" is in reference to "the amount claimed to
be in default" mentioned above. Thereby the Petitioner cannot split the amount
claimed to be in default in to two and show one amount as default occurred and
the remaining amount as default not occurred. It is no doubt true that it has been
mentioned in the Annual Report of the company and the balance sheet of 2013-
2014 that company failed to repay the debentures already matured thereby the
company has been in default in respect to Rs.51 crores but here the relief sought
by the Petitioner is for entire amount of Rs.226,16,79,437.
10. If default is occurred to Rs.51 crores only, then the Petitioner ought to show
default occurred for 51 crores only but not for Rs.226,16,79,437. The petitioner
shall not explain away simply by saying that since this Petition is simply for
initiating corporate insolvency resolution process, the petition is maintainable if
default is in relation to the part of the amount mentioned in the application. I doubt
MUMBAI BENCH 817
it is correct proposition of law for two reasons, one - it is doubtful as to whether

financial creditor is entitled to make claim for part payment out of the total amount
in default, two - it makes no difference as to whether it is a claim petition or a
petition for initiating corporate insolvency resolution process since this application
is solely based on occurrence of default, therefore the petitioner must specify the
amount to which default occurred, the petitioner cannot say one as default amount,
to part of it, as default occurred.
11. In respect to occurrence of default it is evident on record that the company
failed to repay the debentures already matured. If this petition is on the basis of
occurrence of default for 51 crores the petitioner would have mentioned the
default has occurred for 51 crores but not for Rs.226,16,79,437. Above this, this
remedy is a harsh remedy pre-empting every other person to make a claim
against the company and also excluding the corporate debtor from the
administration of the company, in such a case, the Petitioner has to show and
specify the amount to which default occurred stating that the petition has filed on
occurrence of default for such and such amount. For this has not been reflected in
the petition that occurrence of default is for 51 crores, this Petition is not
maintainable in the form before this Bench, whereby this Petition is dismissed by
giving a liberty to the Petitioner by restricting occurrence of default for an amount
of Rs.51 crores that is the amount the Petitioner entitled to from corporate debtor
as on the date of filing this company petition.
12. The corporate debtor company counsel vehemently argued that the Petitioner
filed a company petition with an allegation that conduct of the directors of debtor
company is prejudicial and oppressive to the interest of the petitioner and also
filed an application for appointment of an arbitrator in relation to the affairs of the
debtor company whereby this Petition is not maintainable.
13. The Bench has not been impressed upon by the argument of the counsel of
debtor company that other legal proceedings pending because this code has
over riding effect against all acts and proceedings pending before various forums
in respect to the petition filed by financial creditor, the only requirement the
petitioner has to show is that the default has occurred to the amount that is
mentioned in the application, if at all this Bench is satisfied that occurrence of
default is in existence as on the date of filing financial creditor petition, that
petition is maintainable. Accordingly, this Bench will admit with consequential
directions as mentioned under the provisions of Insolvency and Bankruptcy code.
14. However, for having the present Petitioner failed to specify the default occurred
in the company, this petition is dismissed with the liberty as mentioned above.
Sd/-
B. S.V. PRAKASH KUMAR
Member (Judicial)

MUMBAI BENCH
MUMBAI
C.P No. 19/(MAH)/2017
CA No.
CORAM:
NAME OF THE PARTIES :
Master Voss International Projects Pvt. Ltd.
V/s.
M/s. HDO Technologies Ltd.
1. Vishal Seth Advocate
2. Sanjana Chandrasekhar Advocate
3. Balaji Harish Iyer Advocate
i/b
Mr. Bimal Rajasekhar Advocate
ORDER
C.P. No. 19/1 & BP/NCLT/MB/MAH/2017

On perusal of the operational creditor petition, for there having a name change to
the Petitioner company, since the same is not given in the Company Petition
subsequently filed, the Petitioner has sought for dismissal of the Petition with liberty
to withdraw and to file afresh on the same cause of action, this Bench, accordingly,
dismissed this Petition with liberty to file afresh on the same cause of action.
Member (Judicial)
Member (Technical)
MUMBAI BENCH 819

MUMBAI BENCH
MUMBAI
C.P No. 22/(MAH)/2017
CA No.
CORAM:
B.G.A. Tradelink Pvt. Ltd.
V/s.
Ruchi Soya Industries Ltd.
S.NO. NAME DESIGNATION SIGNATURE
1. Shan Bottlewala & Monil Chheda Advocate
for Juris Corp Adv. for Applicants
ORDER
C. P. No. 22/1 & BP/NCLT/MB/MAH/2017

For having the Petitioner side sought for withdrawal of the company petition, this
Bench hereby dismissed the Petition as withdrawn.
Sd/-
Member (Judicial)
Sd/-
V. NALLASENAPATHY
Member (Technical)

MUMBAI BENCH
MUMBAI
C.P. No. 14/(MAH)/2017
CA No.
CORAM:
Sun-Line Suppliers Pvt. Ltd.
V/s.
M/s. Infinity Fab Engineering Company Pvt. Ltd.
SECTION OF THE COMPANIES ACT: I & BP of the Companies Act 2013.
1. Rajendra Joshi Company Secretary
ORDER
CP NO. 14/ I&BP/NCLT/MB/MAH/2017

The Professional appearing on behalf of the Operational Creditor having realized
that the jurisdiction lies with the Corporate Debtor Company which is situated in
State of Karnataka, he has urged for withdrawal of this Company Petition with a
liberty to file it before appropriate Forum, this Bench, accordingly, dismissed it as
withdrawn with a liberty to the Petitioner to approach appropriate Form on the
same cause of action and also liberty to take original documents, if any, lying with
this Registry. The Registry is hereby directed to return all those original documents
to the Petitioner.
Sd/-
Member (Judicial)
Sd/-
V. NALLASENAPATHY
Member (Technical)
MUMBAI BENCH 821

MUMBAI BENCH
MUMBAI
CP No. 13/(MAH)/2017
CA No.
CORAM:
Gujrat Borosil Ltd.
V/s.
M/s. Waaree Energies Ltd.
S. No. NAME DESIGNATION SIGNATURE
1. Shambhu Jha Advocate Respondent
2. Anurag Ghokale Advocate Applicant
ORDER
CP NO. 13/ I&BP/NCLT/MB/MAH/2017

Petitioner Counsel, having realized that proper notice as contemplated u/s.8 of
I&BP Code has not been given before filing this Petition, sought for withdrawal of
this Petition with a liberty to file afresh in accordance with the provisions of
Insolvency & Bankruptcy Code, this Bench, accordingly, dismisses this Company
Petition by giving liberty to the Petitioner to file afresh on the same cause of action
in compliance with the provisions of Insolvency and Bankruptcy Code. If at all
original documents are lying with the Registry, the Registry is hereby directed to
return all those originals to the Petitioner.
Member (Judicial)
Member (Technical)

MUMBAI BENCH
MUMBAI
CP No. 11 /(MAH)/2017
CA No.
CORAM:
State Bank of India
V/s.
M/s. Shree Ganesh Forgings Ltd.
1. Rohit Gupta Advocate Applicant
ORDER
C. P. No. 11 /I & BP/NCLT/MB/MAH/2017

At request of the Petitioner Counsel, this Company Petition is hereby dismissed
as withdrawn, giving liberty to the Petitioner to take steps as prescribed under
Law.
Sd/-
Member (Judicial)
Sd/-
V. NALLASENAPATHY
Member (Technical)
MUMBAI BENCH 823

MUMBAI BENCH
MUMBAI
Coram:
under Rule 6 of the Insolvency & Bankruptcy (Application to adjudicating Authority)
Rule, 2016 and Rules made thereunder:
And
Astra Offshore Sdn Bhd.
.... Operational Creditor
V/s.
Swiber Offshore (India) Pvt. Ltd.
.... Corporate Debtor
Applicants' Counsel: Mr. Ashwin Shanker, Advocate Operational Creditor
ORDER
The Petitioner/ Operational Creditor filed this Creditor Petition u/s 9 of Insolvency
and Bankruptcy Code without filing certificate from the Financial Institution
maintaining Accounts of the Operational Creditor confirming that there is no
payment of this unpaid operational Debt by the Corporate Debtor as set out in (c)
of Subsection (2) of Section (9) of this Code 2016.
Looking at non-filing of the certificate that is required to be filed along with this
petition, this bench had already given time to furnish the said document, but the
counsel failed to furnish the said certificate. When this Bench has put it to the
petitioner counsel how this Bench could pass this order without furnishing the
certificate mandatorily to be filed along with the petition, the Counsel appearing
on behalf of the Operational Creditor submits that it is impossible to file copy of
such Certificate from the Financial Institution for the Bank of the operational creditor
is situated outside India, therefore, the compliances with such requirements
shall be exempted.
On perusal of Section 9 of Insolvency and Bankruptcy Code, it is evident, that it is
mandatory to file copy of the Certificate from the Financial Institutions reflecting
non-payment of the operational debt impugned, for the Operation Creditor has
failed to annex copy of the said Certificate as required u/s 9(3)(c) of the Code, this
petition is liable to be rejected.
Accordingly, the same is hereby rejected.
Sd/-
Member (Judicial)
Sd/-
V. NALLASENAPATHY
Member (Technical)
MUMBAI BENCH 825

MUMBAI BENCH
MUMBAI
Coram:
under Rule 6 of the Insolvency & Bankruptcy (Application to adjudicating Authority)
Rule, 2016 and Rules made thereunder:
And
Smart Timimg Steel Ltd.
.... Operational Creditor
V/s.
National Steel and Agro Industries Ltd.
.... Corporate Debtor
Applicants' Counsel: Mr. Ashwin Shanker, Advocate for Operational Creditor.
ORDER
The Petitioner/Operational Creditor filed this Creditor Petition u/s 9 of Insolvency
and Bankruptcy Code without filing certificate from the Financial Institution
maintaining Accounts of the Operational Creditor confirming that there is no
payment of this unpaid operational Debt by the Corporate Debtor as set out in (c)
of Subsection (2) of Section (9) of this Code 2016.
Looking at non-filing of the certificate that is required to be filed along with this
petition, this bench had already given time to furnish the said document, but the
counsel failed to furnish the said certificate. When this Bench has put it to the
petitioner counsel how this Bench could pass this order without furnishing the
certificate mandatorily to be filed along with the petition, the Counsel appearing
on behalf of the Operational Creditor submits that it is impossible to file copy of
such Certificate from the Financial Institution for the Bank of the operational creditor
is situated outside India, therefore, the compliances with such requirements
shall be exempted.
On perusal of Section 9 of Insolvency and Bankruptcy Code, it is evident, that it is
mandatory to file copy of the Certificate from the Financial Institutions reflecting
non-payment of the operational debt impugned, for the Operation
Creditor has failed to annex copy of the said Certificate as required u/s 9(3)(c) of
the Code, this petition is liable to be rejected.
Accordingly, the same is hereby rejected.
Sd/-
Member (Judicial)
Sd/-
V. NALLASENAPATHY
Member (Technical)
MUMBAI BENCH 827

MUMBAI BENCH
MUMBAI
C.P. No. 07/(MAH)/2017
CA No.
CORAM:
Arika Tour & Travels Pvt. Ltd.
V/s.
M/s. Swiber Offshore (I) Pvt. Ltd.
Order
CP NO. 07/I&BP/NCLT/MB/MAH/2017
The Petitioner / Operational Creditor is called absent, therefore, the Petition is
dismissed for default.
Sd/-
Member (Judicial)
Sd/-
V. NALLASENAPATHY
Member (Technical)

MUMBAI BENCH
MUMBAI
C. P. NO. 02/1 & BP/NCLT/MAH/2017
Coram:
B. S.V. Prakash Kumar, Member (Judicial)
2016.
Between
M/s. Kirusa Software Pvt. Ltd.
... Applicant
V/s.
M/s. Mobilox Innovations Pvt. Ltd.
... Respondent
Applicants' Counsel: Mr. Ankit Lohia, Counsel, Mr. Yuvraj K. Singh Advocate.
Respondents' Counsel: Mr. Jawaharlal, Mr. Hardik Sanghavi, Advocates.
ORDER
The Petitioner company namely Kirusa Software Private Limited has filed this
Operational Creditor Petition stating that the debtor Company is liable to pay
Rs.20,08,202 along with interest at the rate of 18% p.a., as the Corporate Debtor
failed to repay the same, the petitioner, hence, filed this petition.
The petitioner says that the corporate Debtor had issued Purchase Orders (POs)
to the petitioner/Operational Creditor to run "Nach Baliye" Dance Reality show
Tele-voting campaign for Star TV (campaign), which were accepted by the petitioner.
It has filed POs with this petition. In pursuance of the POs issued by the Debtor
Company, the petitioner rendered services by devising a specific software
application for this purpose of tele-voting through the toll-numbers from Telecom
operators. Accordingly, the petitioner raised monthly invoices on the corporate
debtor for the total number of minutes of usage generated by the campaign
including other rental, as on date, the invoices raised by the petitioner on the
corporate debtor for the services provided per the POs remain outstanding and
payable by the corporate debtor to the petitioner as detailed in paragraph 2 of
MUMBAI BENCH 829
Part IV of the petition. Hence the debtor company is liable to make payment to the
petitioner, toll free numbers rentals and the Primary Rate Interface Rental as
raised by the Telecom Operators.
As the Tele Voting was conducted successfully, the petitioner, as mentioned
above, raised invoices against the services rendered, therefore the corporate
debt is payable by the Corporate Debtor as per the invoices raised by the petitioner
on the Corporate Debtor during the period between May 13 to 23rd December
2016.
When this Bench has directed the petitioner to furnish the requisite documents as
described u/s.9 of the Insolvency & Bankruptcy Code, the Petitioner filed the
Notice of dispute raised by the Corporate Debtor disclosing the Corporate Debtor
disputing the claim made by the Petitioner.
Though the petitioner filed all the invoices raised on the Debtor Company
aggregating debt to Rs.20,08,202, details of transaction on account of which debt
fell due, default thereof and demand notice served upon the Debtor, for this
Bench having noticed that notice of dispute raised by Respondent side has not
been annexed to the CP, this Bench hereby directed to furnish the documents as
prescribed u/s. 9 of the I&BP Code. In compliance of it, the Petitioner filed the
notice of dispute issued by the Corporate Debtor disclosing the corporate debtor
disputing the claim made by the Petitioner. On perusal of this sub-section (5) of
Section 9 of this Code, it is evident that notice of dispute has been received by the
Operational Creditor.
On perusal of this notice dated 27.12.2016 disputing the debt allegedly owed to
the petitioner, this Bench, looking at the Corporate Debtor disputing the claim
raised by the Petitioner in this CP, hereby holds that the default payment being
disputed by the Corporate Debtor, for the petitioner has admitted that the notice of
dispute dated 27th December 2016 has been received by the operational creditor,
the claim made by the Petitioner is hit by Section (9) (5) (ii) (d) of The Insolvency
and Bankruptcy Code, hence this Petition is hereby rejected.
Sd/-
Member (Judicial)
Sd/-
V. NALLASENAPATHY
Member (Technical)

MUMBAI BENCH
MUMBAI
Coram:
In the matter of Section 7 of the Insolvency and Bankruptcy Code, 2016 read with
Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority)
Rules, 2016).
Between:
ICICI Bank Limited
.... Applicant
V/s.
M/s. Innoventive Industries Limited
.... Respondent
Applicants' Counsel : Mr. Zal Andhyarujina, Mr. L. Viswanathan, Mr. Mr. Anush
Mathkar, Mr. Dhananjay, Mr. Animesh Bisht, Advocates for the Applicant.
Respondents' Counsel: Mr. Ravi Kadam, Sr. Counsel, Mr. Chetan Kapadia, Mr.
Rahul Sarda, Mr. Sanjay Asher, Ms. Manik Joshi, Ms. Aditi Shukla, Advocates for
the Respondent Company.
ORDER
1. On the mentioning made for clarification on two issues, one - on the another
CA filed by the Corporate Debtor and two - for putting the name of agency keeping
the information, i.e. CIBIL, this Bench, by invoking inherent powers conferred
upon this Bench u/s 420 & 424 of the Companies Act 2013 r/w Rule 11 of NCLT
Rules, ordered as follows.
2. The Corporate Debtor Counsel stated in the open court that the other IA 6/ 2017
filed by the Corporate Debtor is in respect to non-service of notice upon the
Debtor, this Bench, believing the statement of the counsel appeared on the
corporate debtor behalf, passed orders stating that the argument of non-service
of notice would pale into insignificance because this Bench heard on the other
MUMBAI BENCH 831
CA upon which the corporate debtor vehemently argued. Though it normally

does not happen, in rush of work, we inadvertently decided that IA 6/2017 basing
on the argument of the counsel of Corporate Debtor, because that plea would not
survive because hearing has already been given to the Corporate Debtor in the
earlier application. Delay has also occurred in passing this order owing to the
application filed by the Corporate Debtor. Indeed, this Code has nowhere given
any explicit opportunity to the Corporate Debtor to exercise the right of making
submissions, but this Bench heard and passed orders in the earlier application
on 17.1.2017.
3. However, this issue having been brought to the notice of this Bench, it is
hereby held that the Corporate Debtor could have raised this plea of no default,
which he raised in the above CA 6/2017 along with the issue already raised in
the earlier CA already adjudicated. Having not raised the said plea along with
other application, this Bench hereby held that this application is not entertainable
for two reasons, one - the corporate debtor cannot raise objection, because no
audience has been given to the corporate debtor in the Code, two - even if right
is assumed as exercisable by the Corporate Debtor, since he has not taken this
relief in the earlier application, the corporate debtor is barred from raising such
plea in subsequent application.
4. Moreover, Creditor application shall be decided within 14 days from the date
of filing creditor petition by ascertaining as to whether petition is in compliance of
Section 7 of the Insolvency & Bankruptcy Code, therefore this Bench is under no
obligation to hear the Corporate debtor, hence this CA is hereby dismissed even
without going into the merits of the application.
5. As to second correction, it is hereby corrected that the default has been taken
into consideration on the report given by CIBIL.
Sd/-
Member (Judicial)
Sd/-
V. NALLASENAPATHY
Member (Technical)

MUMBAI BENCH
MUMBAI
C.P. No. 01/(MAH)/2017
CA No.
CORAM:
M/s. Arham Anmol Projects Pvt. Ltd.
Order
CP No.01/I&BP/NCI T/MB/MAH/2017
This matter came up for hearing yesterday i.e. on 18.1.2017. None present for the
Applicant. Today also nobody has appeared hence, the Applicant is called absent.
This Petition is dismissed for default.
Sd/-
Member (Judicial)
Sd/-
V. NALLASENAPATHY
Member (Technical)
NEW DELHI BENCH 833
NEW DELHI BENCH

NEW DELHI BENCH 835

AT NEW DELHI
Reserved on : 25th April, 2017
Company Petition No. (IB)-27(PB) / 2017
IN THE MATTER OF
Parag Gupta
....Petitioner
Versus
M/s B K Educational Services Pvt. Ltd.
...Respondent
CORAM:
For Petitioner(s) : Mr. Mukul K. Gupta, Advocate and Mr. N .K.Singh, Company
Secretary.
For Respondent(s) : Mr. Robin R . David, M s. Ruchi Khurana, Ms. Megha Srivastawa
and Mr. Dhiraj Philip, Advocates.
ORDER
The petitioners claim to be financial creditors having given loans to the

Respondents/Corporate Debtor. As the Corporate Debtor has failed to repay the
same, the present petition has been filed u/s 7 of the Insolvency & Bankruptcy
Code, 20 16 (hereinafter referred to as the ‘IBC’) for initiation of the Insolvency
Resolution Process. The petition has been jointly filed by Dr. Shilpa Gupta and by
a financial firm, Parag Gupta & Associates, in which her husband Mr. Parag
Gupta, is a partner.
2. The Corporate Debtor has one asset, being an immovable property no. HS-
34A, Sector-Pi-01, Greater Noida allotted by the GNIDA. As huge amounts had to
be paid to the GNIDA towards the plot allotted, it is averred that the petitioners
were induced into giving loans which were to be repaid along with 12% interest.
The same was required to salvage the Corporate Debtor from financial crisis
which would have otherwise resulted in cancellation of the allotment of the land
by the GNIDA in their favour.

3. The Financial Creditors submit that collectively a total of Rs.1,01,71,263/ - was
given by them directly to Greater Noida Authority for and on behalf of the Corporate
Debtor, and at their instance. Details of the loans given vide Demand Drafts on
various dates by petitioner no.2, Parag Gupta & Associates, from its Bank Accounts
in favour of GNIDA have been given in para 8 of the petition. These have been
tendered between 1st October, 2012 to 5th February 2013 directly towards the
liability of the Corporate Debtor. The amounts given by Petitioner no. 1 Dr. Shilpa
Gupta to Greater Noida towards liquidating the outstanding liability of the Corporate
Debtor has been given in Para no.9 of the petition .
4. It is submitted by the Financial Creditors that the aforesaid debt, which was
agreed to be re turned with interest of 12%, is still outstanding and despite verbal
assurances, the Corporate Debtor has failed to repay either the principal amount
or the interest thereon despite legal notices dated 09.0 1.2017 and 24 .01.20 17 .
5. The Respondent/Corporate Debtor on putting in appearance has denied any
liability. It is their case that mother-in-law of Petitioner no. 1, Mrs. Kum Kum
Varshney, was a director in the company and had manipulated the records .
Allegations are also made that the brother-in-law of Petitioner no. 1 is a partner in
the Chartered Accountant firm handling the filing of statutory records of the
Corporate Debtor and therefore cannot be relied upon.
6. The Respondents dispute the alleged debt or the factum of the payments
made by the Petitioners for and on behalf of the Corporate Debtor to GNIDA. It is
their case that various criminal proceedings have been initiated against the
petitioners and/or their relatives. Further, the amounts claimed are patently time
barred.
7. A perusal of the averments made in the petition support the submissions of the
Ld. Counsel in respect of the debt claimed in Para no.8 of the petition by Petitioner
no.2. Having been paid between the period 01.10.20 12 and 05.02.2013, we find
nothing on record that would extend the limitation to recover the same. The
petitioners have tried to rely upon the Income Tax Returns filed by the Corporate
Debtor for the assessment year 20 14-15 & 2015-16. These Income Tax Returns
do not specify that the short term borrowings of over 8 crores includes the loans
alleged to have been given by the Petitioners herein. The Financial Statements
filed the Corporate Debtor with the RoC also do not reflect the loans given by the
petitioners so as to accept them as acknowledgment of a debt for enhancing the
period of limitation. The said documen ts are therefore of no help to the Petitioners
for the pu rpose of extend ing limitation. We therefore do not find that the amounts
specified in Para no. 8 of the petition are legally recoverable debts.
NEW DELHI BENCH 837
8. With respect to the liability of Rs.10 lacs, specified m para no.9 of the petition
given by Dr. Shilpa Gupta (Petitioner no. 1) on 25.02.2015, the petitioners have
been able to satisfy that the same is a legally recoverably financial debt. The
Bank records corroborate that the amount for the Demand Draft in favour of
GNIDA had been prepared from the account of the Petitioner no. 1 and tendered
on behalf of the Corporate Debtor, there by creating a financial liability on the
Corporate Debtor to repay the same to petitioner no. 1. Ld. Counsel for the Corporate
Debtor has tried to raise the issue of filing of FIRs and criminal action against the
petitioner, contemplated but other than a vague denial of the liability, no cogent
repudiation has been shown to this Bench in respect of the payment made by
Petitioner no. 1 towards the demand made by GNIDA in respect of the immovable
asset of the Corporate Debtor. The petitioner on the other hand has satisfied us on
the basis of her bank statement and other documents. As the Corporate Debtor
has failed to repay this amount, the financial creditor is entitled to initiate Insolvency
Resolution Process.
9. Ld . Counsel for the Respondent/Corporate Debtor submits that they are ready
and willing to liquidate this liability of Rs. 10 lakhs for which time had been
granted to them till today. A demand draft in favour of the Financial Creditor,
Dr. Shilpa Gupta, drawn on Indian Bank, Branch No. Anand Vihar (01677) has
been tendered in Court to avert the Insolvency Resolution Process.
10. In view of the aforesaid action, no further orders are called for.
Petition disposed off in terms of the above.
Sd/-
(S.K. Mohapra)
Member Teclinical
Sd/-
(Ina Malhotra)
Member Judicial

NEW DELHI
Date of Decision: 21st April, 2017
IN THE MATTER OF
M/s VDS Plastics Pvt. Ltd.
....Applicant
Versus
M/s Pal Mohan Electronics Pvt. Ltd.
....Respondent
CORAM:
For Petitioner (s) : Mr. Debasish Moitra and Mr. R.K Jain
For Respondent(s) : Mr. K.K Sharma, Senior Advocate and Ms. Bhanita Patowary
ORDER
The petitioner M/s. VDS Plastics Private Limited, a company engaged in the
business of manufacturing and supply of electrical plastic moulded components
has claimed to be an Operational Creditor within the definition as provided for in
the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “Code”),
and has prayed for initiation of Insolvency Resolution Process against the
Respondent/Corporate Debtor on grounds on an outstanding liability of
Rs.90,80,976/-, against invoices raised for supplying them goods.
2. The Operational Creditor had taken steps as required under section 8 of the
Code, issuing a demand notice dated 23.02.2017 for the unpaid operational debt
of above mentioned. The applicant submits that no reply has been received from
the Corporate Debtor. An affidavit as mandated under section 9(3)(b) of the Code
has been filed deposing that no reply has been received from the Corporate
Debtor disputing the unpaid operational debt.
3. The Operational Creditor has also relied upon its ledger Account maintained
in respect of the transactions with the Corporate Debtor and its Balance Sheets for
the year 2014-2015 and 2015-2016 duly recording the unpaid operational debt of
NEW DELHI BENCH 839
Rs. 90,80,976/- The same are annexed to the petition.

4. Upon notice being issued by the Tribunal to the Corporate Debtor, Mr. K.K
Sharma, Ld. Senior Counsel appeared on their behalf and has vehemently
repudiated the claim. In the reply, they have annexed correspondence to point
out that the account, as maintained and claimed by the Operational Creditor is
totally inaccurate. He submits that reply to the demand notice dated 23.02.2017
u/s 8 of the Code was sent, albeit belatedly, receipt of which has been disputed
by the Operational creditor. The reliance of the Ld. Senior Counsel on the postal
record does not appear to be in respect of the notice dated 23.02.2017, though it
may pertain to the earlier notices sent by the Operational Creditor.
5. In the reply filed before this Bench, the alleged liability is seriously disputed.
Ld. Senior Counsel has taken us through the emails exchanged between the
parties, whereby the correctness of the ledger has been disputed. It is pointed out
that on the contrary, as per the Corporate Debtor’s account, they have to recover
huge amounts from the Operational Creditor.
6. The parties have had business dealings since 2010 and the nature of the
transaction between the parties reflect that the raw material, being Plastic
Granules, was supplied by the Corporate Debtor and another Company of the
same management, viz M/s PME Infrastructure, to be moulded into the finished
product. The credit entries pertain to the value of the raw material given, while the
Debit entries pertain to the bills raised for the finished product. Ld. Senior Counsel
for the Corporate Debtor contends that the Operational Creditor has not accounted
for all the raw material supplied. Moreover, they have been charging VAT, far in
excess of the required statutory rates, for which a dispute had been raised.
Further, the moulds for the finished products are still retained by the Operational
Debtor.
7. Ld. Senior Counsel further submits that the alleged liability has been disputed
from time to time for which purpose the parties had also met a few times to thrash
out the differences, but the accounts between them have not be reconciled,
attributing inaction to the petitioners.
8. On account of the disputes, business transactions between the parties did not
continue beyond Dec 2014. It is pointed out that the inaccuracy was admitted by
the petitioners in their email dated 04.10.2014, admitting an amount of Rs. 13,41,
305 being payable by them, but even this has not been reflected in the ledger. On
this count alone, the accuracy of the Ledger Account relied upon the petitioner,
becomes doubtful.
9. It is also the Corporate Debtor’s case, that time and again they have called
upon the Operational Creditor to reconcile the accounts since inception of their
business dealings, as the total credit for the supply of the material was not properly
accounted for, as also the fact that the Operational Creditor had charged VAT in
excess of required rate. An email at 24.08.2015 was sent calling upon the petitioner
to return their moulds and to tally the accounts. The alleged excess charging of
VAT and non return of mould or its due appropriate in the account could not be
addressed satisfactorily by the petitioner. It is alleged that the statement provided
was not only incomplete but also inaccurate insofar as the opening balance was
concerned. The respondent Corporate Debtor had also replied to the petitioners
winding up notice disputing the liability on account of aforesaid.
10. Mr. Debasish Moitra, Ld. Counsel for the Operational Creditor submits that no
dispute with respect to the liability was raised within 10 days of receipt of the
notice. It is contended that the requirement of a dispute is limited to institution of
a prior suit or initiation of Arbitration proceedings.
11. We are unable to accept this proposition of the Ld. Counsel for the petitioner
that the intent and definition of a dispute is only limited to a prior Suit or Arbitration
proceeding. The respondent has been able to convince this Bench that the amount
claimed in the ledger account has been disputed for long, with a demand to
reconcile the accounts. It is contented on behalf of the respondents, that in fact it
is the petitioner who owes them money. The petitioner has miserably failed to
substantiate satisfactorily that Rs. 90,80,976 is due and recoverable from
respondent.
12. In view of a dispute raised by the Corporate Debtor, and as the alleged claim
is doubtful and questionable in the facts of the case, the present petition has to be
Rejected.
13. Dismissed. No order as to costs.
(S.K Mohapatra)
Member Technical
(Ina Malhotra)
Member Judicial
NEW DELHI BENCH 841

NEW DELHI
IN THE MATTER OF
M/s. Nowfloats Technologies Pvt. Ltd.
....Applicant
Versus
M/s Getit Stores Pvt. Ltd.
...Respondent
CORAM:
For Petitioner (s) : Mr. Madhavi Khare and Mr. Apoorna Bhumesh, Advocates for
the Applicant.
For Respondent(s)
ORDER
The present petition has been filed under section 9 of the Insolvency and
Bankruptcy Code, 2016 (hereinafter referred to as the ‘Code) for initiating Insolvency
proceedings against the ‘Corporate Debtor’ herein referred to as the Respondent.
2. The petitioner claims to be an ‘Operational Creditor’ as defined under the
Insolvency and Bankruptcy Code, 2016. They have prayed for initiation of the
Insolvency proceedings on grounds that the Respondent has defaulted in paying
their dues despite issuance of notice.
3. As per averments, the petitioner, being the Operational Creditor is engaged in
the business development of Software related products. The Corporate Debtor
deals in publishing and marketing of a free community newspaper and publishes
free and paid classified advertisements. The parties had entered into a Software
Development Agreement dated 25.05.2015 whereby the Operational Creditor
was assigned the contract to develop and design microsites and other related
services on terms and conditions agreed upon. The Operational Creditor has
stated that they had raised various invoices in 2015 for payment of the services
rendered, which in terms of the agreement has accrued to Rs.29,42,430/-,
excluding interest. It is further averred that the Corporate debtor has admitted and
acknowledged the said debt vide e-mail dated 05.07.2016. As the Corporate
Debtor failed to liquidate its liability, the Operational Creditor issued a notice
dated 07.10.2016 through a Registered Post u/s 433(e) and 434 of the Companies
Act 1956, for winding up, which though duly served failed to evoke any response.
4. It is contended by the Ld. Counsel for the Operational Creditor that due
compliance for initiating the insolvency resolution against the Respondent
Corporate Debtor have been made as required under the Code. Annexed to the
present petition are the agreements dated 26.05.2015 & 01.04.2016 between the
parties, invoices raised from 31.09.2015 to 18.03.2016 and notice dated 07.10.2016
u/s 433(e) and 434 of the Companies Act, 1956 2016. Upon notification of the
present code, the Operational Creditor also issued a demand notice dated
04.01.2007. The said notice was however returned with the report “left”. Further
notices were issued on 14.02.2017 at the various offices of the Corporate Debtor.
Due intimation was also given to the Directors and Key Managerial Personnel of
the Corporate Debtor through e-mail. The Operational Creditor has also annexed
its Bank Statements for the relevant period evidencing that no payment has been
received from the Corporate Debtor. It is submitted that as per requirements of
Section 8 of the Code, the Corporate Creditor has raised the demand on
occurrence of the default, demanding payment to which the Corporate Debtor
has not replied to, muchless raised any dispute.
5. The matter was listed on 10.04.2014 on which date Mr. Chetna Kandpal,
Company Prosecutor for the Official Liquidator, Delhi appeared and informed this
Bench that the Respondent Company was under liquidation and a Provisional
Liquidator had been appointed by the Hon’ble High Court of Delhi in Company
Petitions 986/2016, 12/12/2016 & 12/31/2016. Vide order dated 03.02.2017, the
Provisional Liquidator was directed to take over all assets, books of accounts and
records of the Respondent Company. Directions were given to effect the publication.
The Official Liquidator was directed to prepare an inventory of all the assets of the
Respondent Company and the premises in which they are kept were to be sealed.
The next date fixed in this case before the Hon’ble High Court of Delhi is on
26.04.2017.
6. Ld. Counsel for the applicant has filed written submissions to dispel the
apprehension of the Bench regarding maintainability of the petition under the
provisions of IBC in view of the aforementioned proceeding. Going through the
written submissions filed by the counsel for the applicant, it is seen that an
attempt is sought to be made that the provisions of IBC 2016 would prevail (as per
Sec.238 of the Code), notwithstanding anything inconsistent therewith contained
in any other law for the time being in force. Further it is submitted by the Ld.
Counsel for the applicant that in the absence of any enabling provision to approach
NEW DELHI BENCH 843
Hon’ble High Court in a pending winding up proceedings, the application as filed

by the applicant has to be entertained by this forum if it satisfies the requirements
requisite for initiating the proceeding under the Code. It is also argued that the
object of Code is materially different from Winding Up proceedings before the
Company Court.
7. I am unable to appreciate the submissions made by the Ld. Counsel for the
Operational Creditor. The intent of the legislature is to provide a resolution
mechanism, which if unsuccessful, would culminate in liquidation proceedings.
The directions given in the winding up proceedings are towards the same purpose.
The Provisional Liquidator appointed has to take steps for revival of the company.
Appointing an Interim Insolvency professional would be at cross purposes with
the duty assigned to the Provisional Liquidator. Vide the order of the Hon’ble High
Court of Delhi, all assets of the Corporate Debtor have been directed to be taken
over by the Provisional Liquidator. Taking into consideration the above order
passed by the Hon’ble High Court of Delhi, as well as the Notification S.O.3676(E)
dated 07.12.2016 issued by the Central Government (made effective from
15.12.2016) directing that all cases at the stage of Winding Up which have not
been transferred to this Tribunal shall be proceeded under the Companies Act,
1956, the applicant can only proceed with any other legal proceeding against the
company, by leave of the Court which is seized of the winding up proceedings. In
the present instance no leave has been obtained by the applicant from the Hon’ble
High Court to initiate the present proceedings before this Tribunal.
8. This petition therefore does not merit any consideration and is being rejected
at this preliminary stage. Nothing observed herein shall prejudice the right of the
petitioner to agitate its claim before any other forum.
(Ina Malhotra)
Member (Judicial)

NEW DELHI
Filed on : 29th March, 2017
IN THE MATTER OF
Speculum Plast Pvt. Ltd.
...Applicant
Versus
M/s PTC Techno Pvt. Ltd.
...Respondent
CORAM:
For Petitioner (s) Mr. Kanti Mohan Rustogi and Mr. Shubho Jana, Advocates for
the Applicant.
For Respondent(s)
ORDER
The petitioner has filed present petition under section 9 of the Insolvency and
Bankruptcy Code, 2016 (hereinafter referred to the Code) with a prayer to initiate
corporate insolvency resolution in respect of M/s. PTC Techno Pvt. Ltd. (hereinafter
referred as ‘the Corporate Debtor’).
2. As per averments made in said application, the petitioner, being the ‘Operational
Creditor’, provided services of electroplating to the (IB)-41(ND)2017 Speculum
Plast Pvt. Ltd. v. M/s. PTC Techno Pvt. Ltd. Page 1 of 3 Respondent. Invoices were
raised for the services rendered between from the period 11.04.2013 to 19.09.2013.
It is submitted that the ‘Operational Debtor’ failed to remit the amounts under the
bills. The total aggregate amount claimed is Rs.24,18,273.36/- which includes
the Central Sales Tax for want of submission of the ‘C ‘ forms.
3. The applicant/Operational Creditor has taken due steps to serve a notice u/s
8 of the Code giving ten days time to the Corporate Debtor to respond and/or
raise any dispute. The same has been returned back with the endorsement
“Refused”. The applicant has filed an affidavit deposing that there is no notice
NEW DELHI BENCH 845
given by the Corporate Debtor relating to the dispute of the unpaid Operational
Debt in terms of Section 9 (3)(b) of the Code. Further in compliance of the
requirement u/s 9 (3) (c), the certificate of ICICI Bank has been filed confirming
that there was no payment of the Operational Debt received in the account of the
Operational Creditor. The said application is also annexed with the consent of the
named insolvency professional, who has certified that there are no disciplinary
proceedings pending against him with the Board or with the Indian Institute of
Insolvency Professional of ICAI. The petitioner has filed the copy of the 123 invoices
corroborating the reproduced statement of the ledger account.
4. It is also submitted that there are no prior proceedings pending in any court or
forum.
5. A perusal of the documents on record, reflect that the invoices raised are for
the period 01.04.2013 to 19.09.2013 for the services rendered. The present
proceedings have been initiated on 29.03.2017, i.e., after a period of three years
from the last invoice raised. Ld. Counsel for the Operational Creditor has failed to
satisfy this Bench as to how this claim is legally recoverable being beyond the
period of limitation. He seeks to rely on cheques tendered by the Corporate
Debtor for enhancing the limitation, having been given in acknowledgment of the
outstanding liability and in a bid to reduce the same. There is no difficulty in
accepting the proposition that tender of a cheque would be an acknowledgment
of a debt, but for the fact, that the cheques in this case are dated 31.01.2014 and
07.02.2014. The limitation as such can only be construed from 07.02.2014. As the
petition was filed on 29.03.2017, it is clearly beyond the enhanced period of
limitation.
6. The claim being time barred, cannot be termed as a legally recoverable debt.
In view of the same, the petition cannot be entertained and is liable to be
dismissed.
7. Accordingly this petition under section 9 of the IBC is rejected. No order as to
cost.
(Ina Malhotra)
Member (Judicial)

NEW DELHI
Reserved on : 29th March, 2017
Date of Decision: 31st March, 2017
IN THE MATTER OF
Under Section 9 of Insolvency and Bankruptcy Code,2016
Raman Seth & Anr.
...Applicants
Versus
M/s Unitech Hi-Tech Developers Ltd.
...Respondent
CORAM:
For Petitioner (s) Mr. Ishan Sanghi, Advocate for the Applicant.
For Respondent(s)
ORDER
This is an application filed under section 9 of Insolvency and Bankruptcy Code,
2016 with a prayer to initiate Corporate Insolvency resolution process in respect
of Unitech Hi-Tech Developers Limited, respondent company.
2. The brief fact of the case is that petitioner had booked an apartment at
Unitech Grande Sector 96, 97, 98, Noida (U.P) in respect of which a provisional
allotment letter dated 14th August 2010 was issued by respondent to the
petitioner. It is submitted that the petitioner has paid a sum of Rs. 1,25,20,514 to
the respondent from time to time in consideration for the booked apartment. It
is also the case of the petitioner that as per allotment letter dated 14th August
2010 the provisional date of allotment was 12th August 2010 and the possession
was to be delivered within 30 months from 12th August 2010. It was a condition
that if the respondent developer is not in a position to give possession of the
apartment, he has to refund the amount deposited by the applicant. It is alleged
that the respondents have failed to deliver the possession of the apartment
within the stipulated time and has not refunded the amount deposited by the
applicant with interest. As per the applicant Rs. 1,37,72,565.40 is the amount of
default outstanding against the respondent as on 12.02.2013. The applicant
NEW DELHI BENCH 847
has enclosed a copy of demand notice dated 24.01.17 issued under Insolvency
and Bankruptcy Code, 2016 to the respondent Unitech Hi-Tech Developers
Limited. The applicant has also enclosed a certificate from ICICI Bank certifying
that since 1.04.10 there has been no payment from the respondent Unitech
Hi-Tech Developers into applicant’s account.
3. Operational creditors and operational debt has been defined under Section
5(20) and 5(21) of the Insolvency and Bankruptcy Code, 2016 which envisages as
follows:
‘5. In this Part, unless the context otherwise requires, -
(20) “Operational creditor” means a person to whom an operational debt is
or transferred.
(21) “Operational debt” means a claim in respect of the provision of goods or
Government, any State Government or any local authority.’
local authority. In the present case the alleged operational debt has not arisen of
goods or services. The debt has also not arisen out of employment or the dues
which are payable under the statute to the Centre/State Government or local
body. The refund sought to be recovered is only associated with the delivery of
the possession of immovable property which has been delayed.
5. The ‘Operational Creditors’ are those persons to whom the ‘Corporate Debt’ is
owed and whose liability from the entity comes from a transaction onoperations.
The Petitioner in the present case has neither supplied any goods nor has
rendered any service to acquire the status of an ‘Operational Creditor’.
6. It is also pertinent to refer here that in respect of the contractual obligation in
question, the petitioner has moved the National Consumer Disputes Redressal
Commission, New Delhi vide Consumer Case No. 92 of 2017. The Annexure-k of
the petition is reproduced below :
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI
CONSUMER CASE NO. 92 OF 2017
1. RAMAN SETH & ANR.
S/O MAJ. DEN K. K. SETH, R/O. A 78, NEW FRIENDS COLONY,
NEW DELHI-110065
2. MRS. RANAJANA SETH

W/O RAMAN SETH, R/O. A 78, NEW FRIENDS COLONY,
NEW DELHI-110065.
VS.
1. M/S. UNITECH HI-TECH DEVELOPERS LIMITED
REGD. OFFICE: BASEMENT, 6, COMMUNITY CENTRE, SAKET,
NEW DELHI-110017
BEFORE:
HON’BLE MR. JUSTICE V. K. JAIN, PRESIDING MEMBER
For the Complainant: Mr. Ishan Sanghi, Afvocate For the Opp. Party:
Dated: 27 Jan 2017
Admitted, subject to just exceptions.
Issue notice to the OP for 20.04.2017.
V. K. JAIN PRESIDING MEMBER”
7. The term dispute has been defined under Section 5(6) of Insolvency and
Bankruptcy Code, 2016 as under:
Section 5(6): “Dispute” includes a suit or arbitration proceedings relating to –
(a) The existence of the amount of debt;
(b) The quality of goods or service; or
(c) The breach of a representation or warranty.
8. Admittedly, the claim of the petitioner against respondents is sub- judice
before National Consumer Disputes Redressal Commission in Consumer Case
No. 92 of 2017. Pendency of the claim before a legal forum clearly shows existence
of a dispute. The debt is to be taken as a disputed obligation in view of the
pendency of the case. Basing on such disputed claim, pending before a legal
forum for adjudication, initiation of insolvency resolution process under the Code
cannot be triggered.
9. As a sequel to above discussion the petition is rejected.
(S.K. Mohapatra)
Member Technical
(Ina Malhotra)
Member (Judicial)
849
NCLAT ORDER
NCLAT ORDERS 851
NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI

Company Appeals (AT)(Ins) No.31 of 2017
IN THE MATTER OF:
Era Infra Engineering Ltd. ...Appellant
Vs
Prideco Commercial Projects Pvt. Ltd. ...Respondent
Present: Mr. Manoj K. Singh, Mr. Vijaya Singh, Ms. Bornali Roy, Mr. Mahip Singh,
Mr. Gyanendra Kumar, Mr. Tanuka De, Advocates for the appellant.
ORDER
03.05.2017- The Appellant/Corporate Debtor has challenged the order(s) dated

12th April, 2017, passed by the Adjudicating Authority, Principal Bench, New Delhi
in Insolvency Petition No. 26(ND) of 2017. By one of the order the Adjudicating
Authority held that the order is being passed, within 14 days, as per Section 9 of
Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the ‘I&B Code’
for short). By the other order dated 12th April 2017, the Adjudicating Authority
initiated Insolvency Resolution Process by admitting the application, appointed
interim resolution professional, ordered Moratorium and passed the following
directions:
“14. (1) Subject to provisions of sub-sections (2) and (3), on the insolvency

moratorium period.
regulator.
10. The insolvency resolution professional shall also take steps and perform
his duties in terms of Section 15, 17 & 18. All personnel of the Corporate Debtor
including its promoters are expected to extend full cooperation to the interim
resolution professional as is provided by Section 19 and any other provisions of
the Code. The insolvency professional shall submit his report to us within four
weeks.
11. The petition stands disposed of in above terms.“
2. Counsel for the Appellant/Corporate Debtor submitted that the Adjudicating
Authority initiated the insolvency process under section 9 of the I & B Code, 2016,
and admitted the case, though the Application preferred by Operational Creditor
was not complete. It is contended that the Appellant/ Corporate Debtor was not
served any notice under section 8 of the I & B Code, 2016, and the petition was not
filed in terms of (Form 3) Insolvency and Bankruptcy (Application to Adjudicating
3. On notice, the Respondent/Operational Creditor has appeared and filed reply
affidavit. Ld. Counsel appearing on behalf of Operational Creditor while accepted
that no notice under section 8 of I & B Code, 2016, was served on the Appellant/
Corporate Debtor, it is submitted that the other formalities were completed. It is
further submitted that earlier a notice was issued to the Appellant/Corporate
Debtor under section 271 of the Companies Act, 2013, for winding up which
should be treated to be a notice for the purpose of section 8 of the I 8& B Code,
2016. However, such submissions made on behalf of the Operational Creditor
cannot be accepted in view of the mandatory provision under section 8 of the I &
B Code read with Rule 5 of Insolvency and Bankruptcy, (Application to Adjudicating
Authority) Rules, 2016 (hereinafter referred to as I 8& B ‘Rules’ for short).
NCLAT ORDERS 853
4. Insolvency resolution by an Operational Creditor can be initiated only on the

occurrence of a default which is to be followed by a demand notice of unpaid
Operational Debtor as stipulated sub-section (1) of Section 8, as quoted below:
“8(1) An operational creditor may, on the occurrence of a default, deliver a
form and manner as may be prescribed.”
5. Rule 5 of I & B Rules also mandates an Operational Creditor to deliver the
Corporate Debtor a demand notice in Form 3 or a copy of an invoice attached with
a notice in Form 4, as quoted below:
“5. Demand notice by operational creditor.–(1) An operational creditor shall
deliver to the corporate debtor, the following documents, namely. -
(a) a demand notice in Form 3; or
(b) a copy of an invoice attached with a notice in Form 4.
(2) The demand notice or the copy of the invoice demanding payment referred
to in sub-section (2) of section 8 of the Code, may be delivered to the corporate
debtor,
(a) at the registered office by hand, registered post or speed post with
acknowledgment due; or
(b) by electronic mail service to a whole time director or designated partner
or key managerial personnel, if any, of the corporate debtor.
(3) A copy of demand notice or invoice demanding payment served under this rule
by an operational creditor shall also be filed with an information utility, if any.“
6. The application for initiation of corporate insolvency resolution process,
thereafter can be filed by Operational Creditor after expiry of period of 10 days
from the date of delivery of the notice or invoice demanding payment, as provided
under sub-section (1) of section 9.
7. Only thereafter, in terms of sub-section (5) of Section 9, the Adjudicating Authority,
within 14 days of receipt of the application, by an order is required to either admit
the application, if complete or to reject the application if incomplete, provided
seven days’ time is granted for completion of the application if incomplete. As per
clause (ii) (c) & (d) of sub-section (5) of section 9, the adjudicating authority is
required to reject the application, in absence of affidavit that the Operational
Creditor in absence of delivery of demand of notice or invoice demanding payment
to the Corporate Debtor. In this connection we refer Section 9 of the I & B Code, as
quoted below:
9. (1) After the expiry of the period of ten days from the date of delivery of the
notice or invoice demanding payment under sub-section (1) of section 8, if the
operational creditor does not receive payment from the corporate debtor or
notice of the dispute under sub-section (2) of section 8, the operational creditor
may file an application before the Adjudicating Authority for initiating a corporate
insolvency resolution process.
(2) The application under sub-section (1) shall be filed in such form and manner
and accompanied with such fee as may be prescribed.
(3) The operational creditor shall, along with the application furnish–
the operational creditor to the corporate debtor;
(b) an affidavit to the effect that there is no notice given by the corporate
(4) An operational creditor initiating a corporate insolvency resolution process
under this section, may propose a resolution professional to act as an interim
application under sub-section (2), by an order–
creditor and the corporate debtor if,–
(b) there is no repayment of the unpaid operational debt;
sub clause (a) of clause (ii) give a notice to the applicant to rectify the defect in
NCLAT ORDERS 855
adjudicating Authority.
of admission of the application under sub-section (5) of this section.”
Section 230 reads as follows:
“The Board may, by general or special order in writing delegate to any member
or officer of the Board subject to such conditions, if any, as may be specified in
the order, such of its powers and functions under this Code (except the powers
under section 240 as it may deem necessary.”
8. Admittedly, no notice was issued by Operational Creditor under section 8 of
the I & B Code, 2016. Demand notice by Operational Creditor stipulated under
Rule 5 in Form 3 has not been served. Therefore, in absence of any expiry period
of tenure of 10 days there was no question of preferring an application under
section 9 of I & B Code, 2016.
9. The Adjudicating Authority has failed to notice the aforesaid facts and the
mandatory provisions of law as discussed above. Though the application was
not complete and there was no other way to cure the defect, the impugned order
cannot be upheld.
10. For the reasons aforesaid, we set aside the order dated 12th April 2014 passed
by the Adjudicating Authority. The application preferred by Operational Creditor
under section 9 stands dismissed being incomplete. All orders, interim
arrangement etc. as has been made are vacated, moratorium as declared earlier
is quashed, appointment of interim resolution professional also stands quashed.
All action taken by interim resolution profession is declared illegal. The appeal is
allowed with the aforesaid observations.
(Justice S.J. Mukhopadhaya) (Mr. Balvinder Singh)
Chairperson Member (Technical)
IN THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL

COMPANY APPELLATE JURISDICTION
Company Appeal (AT) No. 09 of 2017
(arising out of Order dated 9th March 2017 passed by NCLT, Allahabad Bench in
C.P. No. 19/Ald/2017)
JK Jute Mills Company Limited. ....Appellant
Vs.
M/s Surendra Trading Company. ...Respondent
Present:
For Appellants: Mr. Virendra Ganda, Senior Advocate with Mr. Arvind Kumar and
Mr. Abhijeet Sinha, Advocates
For Respondent: Mr. Krishnendu Dutta with Ms. Bhawna Chopra Rustogi, Ms.
Prachi Ohri, Advocates for R-l Mr. Ashok Kumar Jain with Mr. Sahil Dhawan,
Advocates for R-2
For other Respondents: Mr. Shakti Ahmed and Mr. Atanu Mukherjee, Advocates.
JUDGEMENT
SUDHANSU JYOTI MUKHOPADHAYA, J.

This appeal has been preferred by appellant - J.K. Jute Mills Company Limited
against Order dated 9th March 2017 passed by Adjudicating Authority (National
Company Law Tribunal), Allahabad Bench in C.P. No. 10/Ald/2017.
2. By the impugned order the Adjudicating Authority overruled the objection of
the appellant - corporate Debtor and directed the appellant to maintain status
quo on immovable properties.
3. The question involved in this case is:
Whether the time limit prescribed in Insolvency & Bankruptcy Code, 2016
(hereinafter referred to as Code 2016) for admitting or rejecting a petition or
initiation of insolvency resolution process is mandatory?
4. The brief fact of the case are as follows: -
The Respondent/ ‘operational creditor’ - Surendra Trading Company issued a
Demand notice under section 8 of the ‘Code’ on 6th January 2017 to the
appellant/‘Corporate Debtor’ raising claim of dues pertaining to the year 2001-
2002.
NCLAT ORDERS 857
5. The appellant/’Corporate Debtor’ by letter dated 25th January 2017 objected

the claim as ‘time barred’. Thereafter, the respondent/ ‘Operational Creditor’ filed
a petition under section 9 of the ‘Code’, before the Adjudicating Authority,
Allahabad on 10th February 2017. In the said application the adjudicating authority
passed the interim order.
6. According to appellant, the petition under section 9 was filed without following
the mandatory provision of sub-rule (2) of Rule 6 of “Insolvency and Bankruptcy
(Application to Adjudicating Authority) Rules 2016” (hereinafter referred to as
‘Adjudicating Authority Rules’).
7. The case was listed before Adjudicating Authority on 16th February 2017 but
there being defects, learned counsel for the operational creditor sought time to
rectify the defects as also to receive instructions about the stage of proceedings
pending before BIFR though such proceeding stood abated by virtue of Companies
Act 2013.
8. The ‘Adjudicating Authority’ noticed that the debt due for payment was defaulted
in the year 2004. The ‘operational creditor’ was asked to clarify whether the claim
is barred by law of limitation and whether any recovery proceedings were earlier
initiated by the operational creditor before any competent court of Law or was
deferred or stayed under the provisions of ‘Sick Companies Rehabilitation Act
1985’. The matter was ordered to be listed on 28th February 2017 for removal of
objection and procedural defects.
9. On 28th February 2017, counsel for the operational creditor sought more time
for filing formal memo by providing/furnishing of the latest order passed by BIFR.
The appellant - corporate debtor was instructed to clarify about the position of
prescribed limitation for making recovery of his debt through its memo. The case
was ordered to be listed for further hearing on 3rd March 2017.
10. On 9th March 2017, a third party, J.K. Jute Mill Majdur Sabha filed a Misc.
Application for Intervention. The Adjudicating Authority after going through the
petition for intervention observed that its ‘Locus standi’ is to be decided first.
Therefore, parties were granted time to file reply on maintainability of the third
party application/claims. Further, the operational creditor was also granted liberty
to file rejoinder to objection of the corporate debtor. Leaned counsel for the
‘operational creditor’ as also the workers union requested the Adjudicating
Authority to grant order of status quo, as the corporate debtor may alienate its
assets. When it was objected by learned counsel for the appellant/corporate
debtor, the Adjudicating Authority held that under Rule 11 of NCLT Rules 2016, it is
conferred with the powers to provide substantial justice to the party concerned.
11. Learned counsel for the appellant submitted that the Adjudicating Authority
became ‘functus officio’ after the time period specified under section 9 of the
‘Code’ and, therefore, it has no power to grant stay of sale of assets or ‘status quo’
in regard to any assets.
12. It was further contended that no prayer having been made by the ‘operational
creditor’ to grant stay, it was not open to the Adjudicating Authority to pass interim
order of status quo.
13. It was further contended that the Adjudicating Authority has no inherent
jurisdiction under the ‘Code’ to pass any ad interim order.
14. Learned counsel for the appellant highlighted the defects in the Demand
notice dated 6th January 2017 as was sent by respondent/‘operational creditor’. It
was also contended that the petition under Section 9 is barred by law of limitation.
15. On the other hand according to Learned counsel for the respondent/’operational
creditor’ 14 days’ time limit prescribed under section 9 of the ‘Code’ for passing
orders of admission or rejection of application is directory; it is not mandatory. It
was also contended that the court should avoid any construction of an enactment
which will lead to an unworkable, inconsistent or impracticable results. Reliance
was placed on Hon’ble Supreme Court’s decision in H.S. Vankani V. State of
Gujarat, AIR 2010 SC 1714.
16. Referring to different situation, learned counsel for the respondent/’operational
creditor’ further submitted that if 14 days’ period prescribed under section sub-
section (5) of section 9 is considered as mandatory, it will result in numerous
anomalous situations which is not the intention of the legislature in drafting the
Code.
17. Further, according to learned counsel for respondent/’operational creditor 7
days’ period for curing of defects is independent of the 14 days’ period for
prescribed under sub-section (5) of section 9 before admission or rejection of the
application.
18. The case was heard on merit and judgement was reserved on 28th March
2017. The Adjudicating Authority in the meantime was given liberty to decide the
question of maintainability of the petition and the contentions as raised in this
appeal.
19. In the written submissions, it has been brought to the notice of this court that
the Adjudicating Authority fixed 5th April 2017 as the date for hearing the petition
on the question of maintainability as raised in this appeal. Therefore, the
respondent requested the Appellate Tribunal to allow the Adjudicating Authority
to pass the order of maintainability as raised in this appeal with further prayer
‘not to deny’ the right of appeal after final decision rendered by the Adjudicating
NCLAT ORDERS 859
Authority. It is informed that subsequently the Tribunal taken up the matter on 10th
April 2017, but on certain ground adjourned the case.
20. We have also noticed that the Adjudicating Authority, Mumbai Bench in other
cases under section 9 of the ‘Code’ rejected some of the applications in view of
mandatory time limit prescribed under section 9 of the ‘Code’.
21. As important question of law is involved and even after three weeks of reserved
judgement, Adjudicating Authority has nut passed any final order of admission or
rejection on the petition under section 9 and now more than 60 days have passed
after filing of the petition and as important question of law are involved, we
decided to proceed with the matter.
22. To decide the question whether the time limit prescribed for initiation and
completion of Insolvency Resolution Process is mandatory, it is desirable to notice
different time limit prescribed under the Insolvency and Bankruptcy Code, 2016.
23. ‘Corporate Insolvency Resolution Process’ can be initiated under different
provisions of the Code, such as under section 7 by ‘financial creditor’, under
section 9 by ‘operational creditor’ and under section 10 by the ‘Corporate
applicant’. Though procedures after ‘admission’ of Insolvency Resolution Process
is almost common, the legislature prescribed different time limit for admission or
rejection of the petitions.
24. For initiation of Insolvency Resolution Process by ‘financial creditors’ under
section 7, the Adjudicating Authority is allowed 14 days of the receipt of the
application to ascertain the existence of a default from the records with information
utility or on the basis of other evidence furnished by the financial creditors; under
sub-section (5) of Section 7 before or after 14 days, if Adjudicating Authority is
satisfied that a default has occurred and the application under sub-section (2) of
section 7 is complete and there is no disciplinary proceedings pending against
the proposed resolution professional, the Adjudicating Authority is required to
admit the application. On the contrary, if the default has not occurred or the
application is not complete then the Adjudicating Authority is required to dismiss
the petition.
However, in case of incomplete application the Adjudicating Authority is required
to grant seven days’ time to the applicant/financial creditor to rectify the defect.
The Section 7 reads as follows: -
“Section 7. Initiation of corporate insolvency resolution process by financial
creditor -
(1) A financial creditor either by itself or jointly with other financial creditors may
file an application for initiating corporate insolvency resolution process against
a corporate debtor before the Adjudicating Authority when a default has

occurred.
Explanation. – For the purposes of this sub-section, a default includes a default
(3) The financial creditor shall, along with the application furnish–
application under sub-section (2), ascertain the existence of a default from the
records of an information utility or on the basis of other evidence furnished by
the financial creditor under sub-section (3).
(5) Where the Adjudicating Authority is satisfied that–
(a) a default has occurred and the application under sub-section (2) is
complete, and there is no disciplinary proceedings pending against the
proposed resolution professional, it may, by order, admit such application;
or
(b) default has not occurred or the application under sub-section (2) is
incomplete or any disciplinary proceeding is pending against the proposed
resolution professional, it may, by order, reject such application:
Provided that the Adjudicating Authority shall, before rejecting the application
under clause (b) of sub-section (5), give a notice to the applicant to rectify the
defect in his application within seven days of receipt of such notice from the
of admission of the application under sub-section (5).
(7) The Adjudicating Authority shall communicate–
(a) the order under clause (a) of sub-section (5) to the financial creditor and
NCLAT ORDERS 861
(b) the order under clause (b) of sub-section (5) to the financial creditor,
within seven days of admission or rejection of such application, as the case
may be. “
25. On the contrary in the case of ‘operational creditors’ under sub-section (5) of
section 9, within 14 days of the receipt of the application the ‘Adjudicating Authority’
is required to either admit the application, if complete or reject the application, if
not complete or may grant 7 days’ time from the date of receipt of notice to the
operational creditor to rectify the defect, as evident from section 9 and reads as
follows :
“Section 9. Application for initiation of corporate insolvency resolution
process by operational creditor. - (1) After the expiry of the period of ten days
from the date of delivery of the notice or invoice demanding payment under
sub-section (1) of section 8, if the operational creditor does not receive payment
from the corporate debtor or notice of the dispute under sub-section (2) of
section 8, the operational creditor may file an application before the Adjudicating
Authority for initiating a corporate insolvency resolution process.
(2) The application under sub-section (1) shall be filed in such form and manner
and accompanied with such fee as may be prescribed.
(3) The operational creditor shall, along with the application furnish–
the operational creditor to the corporate debtor;
(b) an affidavit to the effect that there is no notice given by the corporate
(4) An operational creditor initiating a corporate insolvency resolution process
under this section, may propose a resolution professional to act as an interim
application under sub-section (2), by an order–
creditor and the corporate debtor if,–
(b) there is no repayment of the unpaid operational debt;

(ii) reject the application and communicate such decision to the operational
creditor and the corporate debtor, if –
(a) the application made under sub-section (2) is incomplete;
(b) there has been repayment of the unpaid operational debt;
(c) the creditor has not delivered the invoice or notice for payment to
(d) notice of dispute has been received by the operational creditor or
(e) any disciplinary proceeding is pending against any proposed
sub clause (a) of clause (ii) give a notice to the applicant to rectify the defect in
adjudicating Authority.
of admission of the application under sub-section (5) of this section.“
26. Similarly in the case of initiation of Corporate Insolvency Resolution Process
by ‘corporate applicant’, like sub-section (5) of section 9, the Adjudicating Authority,
within a period of 14 days of the receipt of the application, by an order required to
admit the application, if it is complete or reject the application if it is incomplete.
However, before rejecting the application it is required to give notice and “corporate
applicant” can be allowed 7 days’ period to rectify the defects. This is evident
from sub-section (4) of section 10, as quoted below:
“Section 10. Initiation of corporate insolvency resolution process by
corporate applicant. – (1) Where a corporate debtor has committed a default,
a corporate applicant thereof may file an application for initiating corporate
insolvency resolution process with the Adjudicating Authority.
NCLAT ORDERS 863
such particulars and in such manner and accompanied with such fee as may
be prescribed.
information relating to–
(a) its books of account and such other documents relating to such period as
may be specified; and
receipt of the application, by an order–
(b) reject the application, if it is incomplete: Provided that Adjudicating Authority
shall, before rejecting an application, give a notice to the applicant to
rectify the defects in his application within seven days from the date of
of admission of the application under sub-section (4) of this section.”
27. Where an application is not disposed of or an order is not passed within a
period specified in the Code, in such case the Adjudicating Authority may record
the reasons for not doing so within the period so specified and may request the
Hon’ble President of National Company Law Tribunal for extension of time, who
may after taking into account the reasons so recorded can extend the period
specified in the Act but not exceeding 10 days, as apparent from sub-section (1) of
Section 64, as quoted below:
“64.(1) Where an application is not disposed of or an order is not passed within
the period specified in this Code, the National Company Law Tribunal or the
National Company Law Appellate Tribunal, as the case may be, shall record
the reasons for not doing so within the period so specified; and the President of
the National Company Law Tribunal or the Chairperson of the National Company
Law Appellate Tribunal, as the case may be, may, after taking into account the
reasons so recorded, extend the period specified in the Act but not exceeding
ten days.”
28. There are other time limit prescribed under the ‘Code’ such as section 16(1) in
terms of which the Adjudicating Authority is required to appoint an interim
resolution professional within 14 days from the insolvency commencement date
(admission of the case). Under sub-section (5) of section 16, the term of the
interim resolution professional cannot exceed 30 days from the date of
appointment, as evident from relevant provisions, which reads as follows:-
“Section 16. Appointment and tenure of interim resolution professional.
(1) The Adjudicating Authority shall appoint an interim resolution professional
within fourteen days from the insolvency commencement date.
(2) Where the application for corporate insolvency resolution process is made
by a financial creditor or the corporate debtor, as the case may be, the resolution
professional, as proposed respectively in the application under section 7 or
section 10, shall be appointed as the interim resolution professional, if no
disciplinary proceedings are pending against him.
(3) Where the application for corporate insolvency resolution process is made
by an operational creditor and–
(a) no proposal for an interim resolution professional is made, the Adjudicating
Authority shall make a reference to the Board for the recommendation of
an insolvency professional who may act as an interim resolution
professional;
(b) a proposal for an interim resolution professional is made under sub-
section (4) of section 9, the resolution professional as proposed, shall be
appointed as the interim resolution professional, if no disciplinary
proceedings are pending against him.
(4) The Board shall, within ten days of the receipt of a reference from the
Adjudicating Authority under sub-section (3), recommend the name of an
insolvency professional to the Adjudicating Authority against whom no
disciplinary proceedings are pending.
(5) The term of the interim resolution professional shall not exceed thirty days
from date of his appointment.”
29. Time limit for completion of Insolvency Resolution Process is prescribed
under section 12 as per which the corporate insolvency resolution process
required to be completed within a period of 180 days from the date of admission
of the application. If resolution professional for any reason not in a position to
complete this job within 180 days may file an application under sub-section (2) of
section 12 before the Adjudicating Authority to extend the period. Under sub-
section (3) of section 12, the Adjudicating Authority may extend the period, but not
exceeding 90 days i.e. total 270 days has been allowed for Insolvency Resolution
Process. This is evidence from section 12 as quoted below:
NCLAT ORDERS 865
“Section 12. Time-limit for completion of insolvency resolution process.

(1) Subject to sub-section (2), the corporate insolvency resolution process shall
be completed within a period of one hundred and eighty days from the date of
admission of the application to initiate such process.
(2) The resolution professional shall file an application to the Adjudicating
Authority to extend the period of the corporate insolvency resolution process
beyond one hundred and eighty days, if instructed to do so by a resolution
passed at a meeting of the committee of creditors by a vote of seventy-five per
cent, of the voting shares.
(3) On receipt of an application under sub-section (2), if the Adjudicating Authority
is satisfied that the subject matter of the case is such that corporate insolvency
resolution process cannot be completed within one hundred and eighty days,
it may by order extend the duration of such process beyond one hundred and
eighty days by such further period as it thinks fit, but not exceeding ninety days:
Provided that any extension of the period of corporate insolvency resolution
process under this section shall not be granted more than once. “
30. Before expiry of the insolvency resolution process of the maximum period
permitted for completion under section 12 if the Adjudicating Authority does not
receive a resolution plan, under section 33 the Adjudicating Authority is required
to pass an order requiring the Corporate Debtor to be liquidated in the manner as
laid down in the said chapter. For proper appreciation, section 33 of the Code is
quoted below:
“33. Initiation of liquidation. - (1) Where the Adjudicating Authority, –
(a) before the expiry of the insolvency resolution process period or the
maximum period permitted for completion of the corporate insolvency
resolution process under section 12 or the fast track corporate insolvency
resolution process under section 56, as the case may be, does not receive
a resolution plan under sub-section (6) of section 30; or
(b) rejects the resolution plan under section 31 for the non- compliance of the
requirements specified therein,
it shall–
(i) pass an order requiring the corporate debtor to be liquidated in the manner
as laid down in this Chapter;
(ii) issue a public announcement stating that the corporate debtor is in
liquidation; and
(iii) require such order to be sent to the authority with which the corporate
debtor is registered.”
31. From the aforesaid provisions we find that time is the essence of the
Insolvency and bankruptcy Code 2016, but it is to be seen whether on failure to
do so, the Adjudicating Authority is competent to pass appropriate order. Further
in case resolution process is not completed within the time prescribed as per
section 33 it will lead to initiation of liquidation proceedings, which may affect the
corporate debtor, which otherwise was not required to be initiated.
32. In P.T. Rajan Vs. T.P.M. Sahir and Ors. (2003) 8 SCC 498, the Hon’ble
Supreme Court observed that where Adjudicating Authority has to perform a
statutory function like admitting or rejecting an application within a time period
prescribed, the time period would have to held to be directory and not mandatory.
In the said case, Hon’ble Apex Court observed:
“48. It is well-settled principle of law that where a statutory functionary is asked
to perform a statutory duty within the time prescribed therefor, the same would
be directory and not mandatory. (See Shiveshwar Prasad Sinha v. The District
Magistrate of Monghur & Anr., AIR (1966) Patna 144, Nomita Chowdhuru v.
The State of West Bengal & Ors., (1999) CLJ 21 and Garbari Union Co-
operative Agricultural Credit Society Limited & Anr. V. Swapan Kumar Jana
& Ors., (1997) 1 CHN 189.)
49. Furthermore, a provision in a statute which is procedural in nature although
employs the word “shall” may not be held to be mandatory if thereby no
prejudice is caused.”
33. That the Hon’ble Apex Court has on numerous occasions interpreted the
word ‘shall’ to mean ‘may’. An analogous position can be found in the context of
the time period prescribed for filing Written Statements by Defendants to a suit,
wherein, the Hon’ble Apex Court was faced with the question of a Court’s power
to take on record Written Statements that were filed beyond the period of 90 days,
as prescribed under Order VIII Rule 1 of the Code of Civil Procedure, 1908. In this
regard, the Hon’ble Supreme Court in Kailash Versus Nanhku and Ors (2005) 4
SCC 480 held as under:-
“27. Three things are clear. Firstly, a careful reading of the language in which
Order 8 Rule 1 has been drafted, shows that it casts an obligation on the
defendant to file the written statement within 30 days from the date of service
of summons on him and within the extended time falling within 90 days. The
provision does not deal with the power of the court and also does not specifically
take away the power of the court to take the written statement on record though
filed beyond the time as provided for. Secondly, the nature of the provision
NCLAT ORDERS 867
contained in Order 8 Rule 1 is procedural. It is not a part of the substantive law.

Thirdly, the object behind substituting Order 8 Rule 1 in the present shape is to
curb the mischief of unscrupulous defendants adopting dilatory tactics, delaying
the disposal of cases much to the chagrin of the plaintiffs and petitioners
approaching the court for quick relief and also to the serious inconvenience of
the court faced with frequent prayers for adjournments. The object is to expedite
the hearing and not to scuttle the same. The process of justice may be speeded
up and hurried but the fairness which is a basic element of justice cannot be
permitted to be buried. “
34. Further, 140111316 Supreme Court in the matter of Smt. Rani Kusum vs Smt
Kanchan Dexn and Ors (2005) 6 SCC 705, concurring with the ratio laid down
in Kailash Versus Nanhku (supra) held that:
“10. All the rules of procedure are the handmaid of justice. The language
employed by the draftsman of processual law may be liberal or stringent, but
the fact remains that the object of prescribing procedure is to advance the
cause of justice. In an adversarial system, no party should ordinarily be denied
the opportunity of participating in the process of justice dispensation. Unless
compelled by express and specific language of the statute, the provisions of
CPC or any other procedural enactment ought not to be construed in a manner
which would leave the court helpless to meet extraordinary situations in the
ends of justice.
11. The mortality of justice at the hands of law troubles a judge’s conscience
and points an angry interrogation at the law reformer.
12. The processual law so dominates in certain systems as to overpower
substantive rights and substantial justice. The humanist rule that procedure
should be the handmaid, not the mistress, of legal justice compels consideration
of vesting a residuary power in the judges to act ex debito justitiae where the
tragic sequel otherwise would be wholly inequitable. Justice is the goal of
jurisprudence, processual, as much as substantive. (See Sushil Kumar Sen v.
State of Bihar (1975) 1 SCC 774.
13. No person has a vested right in any course of procedure. He has only the right
of prosecution or defence in the manner for the time being by or for the court in
which the case is pending, and if, by an Act of Parliament the mode of procedure
is altered, he has no other right than to proceed according to the altered mode.
(See Blyth v. Blyth [(1966) 1 All ER 524 : 1966 AC 643 : (1966) 2 WLR 634 (HL)] .) A
procedural law should not ordinarily be construed as mandatory; the procedural
law is always subservient to and is in aid to justice. Any interpretation which
eludes or frustrates the recipient of justice is not to be followed.
(See Shreenath v. Rajesh [(1998) 4 SCC 543 : AIR 1998 SC 1827].)

14. Processual law is not to be a tyrant but a servant, not an obstruction but an
aid to justice. Procedural prescriptions are the handmaid and not the mistress,
a lubricant, not a resistant in the administration of justice. “
35. Sub-section (2) of section 7, sub-section (2) of section 9 and sub-section (2) of
section 10 deals with the form and manner in which respective applications
under section 7, 9 and 10 ought to be filed along with such process fee as may be
prescribed. This is a procedural matter to be verified by the Registry of the NCLT.
36. Sub-section (1) of Section 5 defines “adjudicating authority” for the purpose of
that part means “National Company Law Tribunal”, (NCLT) constituted under Section
408 of the Companies Act, 2013 (18 of 2013).
37. We have noticed that Code, empowers ‘adjudicating authority’ to pass orders
under Section 7, 9 and 10 of the Code, 2016 and not the NCLT. It is by virtue of the
definition under sub-Section (1) of Section 5 of the Code, the NCLT plays its role as
“adjudicating authority” and not that a Company Law Tribunal. Therefore, in strict
sense, mandate under Section 420 of the Companies Act, 2016 cannot be
transpose in Code 2016 by reading ‘orders of Tribunal, as “Order of Adjudicating
Authority”.
38. The Adjudicating Authority has different roles to play at different stages. The
one of such role is somewhat administrative in nature when under sub-section
(4) of section 7 or sub-section (5) of section 9 and sub-section (4) of section 10, the
adjudicated authority is required to find out whether (i) the case is complete in
terms of the provisions of sub-section (2) of section 7 or sub-section (2) of section
9 or sub-section (2) of section 10, as the case may be or (ii) whether there is a
defect i.e. application is nor in order and incomplete. Otherwise role of Adjudicating
Authority is judicial in nature particularly when it decides as to whether the
‘Insolvency Resolution Process’ to be initiated by admitting of the application or to
reject the application. As a judicial authority, in case the application is incomplete,
it is also empowered to decide whether to grant 7 days’ time to rectify the defects.
In case the applications are admitted and resolution process starts, the Adjudicating
Authority is required to pass judicial order under section 13 and 14 of the ‘Code’
and may order for public announcement in terms section 15 and then to oversee
the resolution process and finally, if so required, to pass order for liquidation.
39. The time period of 14 days prescribed under sub-section (4) of section 7, sub-
section (5) of section 9 and sub-section (4) of section 10 are to be counted from the
date of receipt of application. The word ‘date of receipt of application’ cannot be
treated to be ‘date of filing of the application’. We have noticed that the Registry is
required to find out whether the application is in proper form and accompanied
NCLAT ORDERS 869
with such fees as may be prescribed. So, the Registry will take certain time and
during such period, the applications are not brought to the notice of the
‘Adjudicating Authority’. Therefore, 14 days’ period granted to the Adjudicating
Authority under the provisions of the Code cannot be counted from the ‘date of
filing of the application’ but from the date when such application is presented
before the Adjudicating Authority i.e. ‘the date on which it is listed for admission/
order.
40. In the present scenario, the Insolvency Bankruptcy Code do not bar or render
the Adjudicating Authority powerless to admit an application or rejecting the
application.
41. Further, nature of the provisions contained in sub-section (5) of section 7 or
sub-section (5) of section 9 and sub-section (4) of section 10 of the ‘Code’ like
Order VIII, rule 1 being procedural in nature cannot be treated to be a mandate of
law.
42. The object behind the time period prescribed under sub-section (5) of section
7, sub-section (5) of section 9 and sub-section (4) of section 10, like Order VIII,
Rule 1 of CPC is to prevent the delay in hearing the disposal of the cases. The
Adjudicating Authority can not ignore the provisions. But in appropriate cases, for
the reasons to be recorded in writing, it can admit or reject the petition after the
period prescribed under section 7 or section 9 or section 10.
43. Thus, in view of the aforementioned unambiguous position of law laid down
by the Hon’ble Apex Court and discussion as made above, we hold that the
mandate of sub-section (5) of section 7 or sub-section (5) of section 9 or sub-
section (4) of section 10 procedural in nature, a tool of aid in expeditious
dispensation of justice and is directory.
44. However, the 7 days’ period for the rectification of defects as stipulated under
proviso to the relevant provisions as noticed above is required to be complied
with by the corporate debtor whose application, otherwise, being incomplete is
fit to be rejected. In this background we hold that the proviso to sub-section (5) of
section 7 or proviso to sub-section (5) of section 9 or proviso to sub-section (4) of
section 10 to remove the defect within 7 days are mandatory, and on failure
applications are fit to be rejected.
45. Section 12 is a “time limit for completion of insolvency resolution process”
which is to be completed within 180 days from the date of admission of the
application. An extension of the period of corporate insolvency resolution process
can be granted by the Adjudicating Authority but it cannot exceed 90 days and
cannot be granted more than once.
46. The resultant effect of non-completion of insolvency resolution process within
the time limit of 180 days + extended period of 90 days i.e. total 270 days will
result in to initiation of liquidation proceedings under section 33. As the end
result of Resolution Process is approval of resolution plan or initiation of liquidation
of proceedings, we hold the time granted under section 12 of ‘the Code’ is
mandatory.
Similarly, term allowed to “Interim resolution professional” is 30 days. Thereby
“Interim resolution professional” cannot exceed 30 days from the date of his
appointment as per sub-section (5) of section 16. However, as the Regular
resolution professional starts functioning on completion of period of Interim
resolution professional the performance of the duties of Interim resolution
professional cannot be held to be mandatory though the period is required to be
counted for completion of the interim resolution process i.e., 180 days and in
appropriate case another 90 days can be granted i.e. maximum 270 days which
is mandatory.
47. It is not mandatory for ‘operational creditors’ to propose the resolution
professional to act as an interim resolution professional. It may or may not propose.
In such case, the Adjudicating Authority will nominate insolvency resolution
professional as recommended by the Board on reference from the Adjudicating
Authority. This process also may take some time after admission of the case and
therefore, it is clear that the procedural part of section 7 or section 9 or section 10
are directory in nature.
48. We have noticed the decision of Hon’ble Supreme Court in “Union of India Vs.
Popular Construction Co.” (2001) 8 SCC 470. In the said case, Hon’ble Supreme
Court was deciding the question regarding extension of time period beyond the
time prescribed in the statutes and held when the legislatures prescribed a
special limitation for the purpose of the appeal, the Court cannot entertain an
application beyond the extended period, if prescribed therein.
49. The aforesaid decision of the Hon’ble Supreme Court in Popular Construction
Company cannot be said to be applicable to procedural part of section 7 or
section 9 or section 10, though it is applicable to section 64 which mandates
extension of period not beyond 10 days as also to sub-section (3) and (4) of
section 12 which relates to time limit prescribed for completion of insolvency
resolution process.
50. In these cases, we are not happy with the manner by the Adjudicating Authority
has passed one or other order. The Adjudicating Authority, in spite of time frame
scheme has taken the matter very leisurely and lightly. The time is the essence of
the Code and all the stakeholders, including the Adjudicating Authority are required
to perform its job within time prescribed under the Code except in exceptional
circumstances if the adjudicating authority for one or other good reason fail to do
NCLAT ORDERS 871
so. In the case in hand we find that the Adjudicating Authority has unnecessarily
adjourned the case from time to time which is against the essence of the Code.
51. Further, we find that the application was defective, and for the said reason the
application was not admitted within the specified time. Even if it is presumed that
7 days additional days time was to be granted to the operational creditor, the
defects having pointed out on 16th February 2017 and having not taken care within
time, we hold that the petition under section 9 filed by respondent/operational
creditor being incomplete was fit to be rejected.
52. For the reasons aforesaid, we direct the Adjudicating Authority to reject and
close the Petition preferred by Respondents. After we reserved the judgment if
any order has been passed by the Adjudicating Authority, except order of
dismissal, if any, are also declared illegal.
53. The appeal is allowed. However, there shall be no order as to cost.
(Mr. Balvinder Singh) (Justice S.J. Mukhopadhaya)
Member (Technical) Chairperson
NEW DELHI
1st May, 2017
NATIONAL COMPANY LAW APPELLATE TRIBUNAL

NEW DELHI
COMPANY APPEAL (AT) (Insolvency) No. 16 OF 2017
In the matter of:
ASTRA Offshore SDN BHD .....Appellant
Versus
Swiber Offshore (India) Pvt Ltd. ....Respondent
Present: Mr. Sanjay Grover, Advocate for the appellant.
ORDER
01.05.2017- Learned counsel for the appellant submits that against corporate
debtor M/s Swiber Offshore (India) Pvt Ltd., another petition under Section 9 of the
Insolvency & Bankruptcy Code, 2016 was filed by one Mr. Ajay Joseph, Proprietor
of M/s Global Marine Supply Company. The adjudicating authority, National
Company Law Tribunal, Mumbai Bench, vide its order dated 31.3.2017 in CP
No.51/ 1 & BP/NCLT/MAH/2017 admitted the petition, declared moratorium and
passed consequential directions, as mentioned below: -
i. That this Bench hereby prohibits the institution of suits or continuation of
property including any action under the Securitization and reconstruction
ii. That the supply of essential goods or services to the corporate debtor, if
moratorium period.
iii. That the provisions of sub-section (1) shall not apply to such transactions
iv. That the order of moratorium shall have effect from 31.03.2017 till the
NCLAT ORDERS 873

passes an order for liquidation of corporate debtor under Section 33, as
the case may be.
v. That the public announcement of corporate insolvency resolution process
shall be made immediately as specified under section 13 of the Code.
vi. That the Bench hereby appoints Mr. Rajeev Mannadiar, Registration No.
IBBI/ IPA-01/IP- 00320/ 2016-17/1904 residing at Rustomjee Azziani, Flat
No. 1501, 15th floor, A Wing, Near Saket Complex Majiwada, Thana (West)
- 400601, Email: mannadiarrajeevfauahoo.co.in as interim resolution
Bankruptcy Code.
8. Accordingly, this Petition is admitted. “
In view of aforesaid direction of the Adjudicating Authority, National Company
Law Tribunal, Mumbai Bench against the corporate debtor, learned counsel for
the appellant sought permission to withdraw the appeal to enable the appellant
to raise its claim before the ‘Interim Resolution Professional’.
Inspite of notice to the respondent it has not turned up, nor appeared. In the
circumstances we allow the appellant to withdraw the appeal with liberty to
move before Interim Resolution Professional raising its claim. However, we make
it clear that we have not decided the question as to whether the appellant is
entitled to any amount as per the provisions of Insolvency & Bankruptcy code,
2016 which may be decided by the appropriate authority. The appeal stands
disposed of as withdrawn with the aforesaid observations.
IN THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL

NEW DELHI
Company Appeal (AT) (Insolvency) No. 11 of 2017
Hind Motors India Ltd. ....Appellants
Vs.
Adjudicating Authority NCLT, Chandigarh ....Respondents
Present : For Appellant: Mr. Ajay K. Jain & Mr. Atanu Mukherje, Advocates.
For Respondents:
ORDER
10.04.2017 The appellant is “Corporate Applicant” who filed application under

section 10 of the Insolvency and Bankruptcy code 2016 for initiating Corporate
Insolvency Resolution Process with Adjudicating Authority. The Adjudicating
Authority (NCLT Bench) by impugned order dated 9th March 2017 in C.P. No.
06(Chd)/2017 while admitted the appeal qua the debts of ‘financial institution’
and ‘operational creditor’, has segregated the application in so far it relates to
public depositors. The grievance of appellant is that the Adjudicating Authority
cannot exclude the ‘public depositors’ who also come within the meaning of
‘financial creditors’.
Having gone through the impugned order and the submission made on behalf of
the appellant, we left the question open for determination at appropriate stage for
the following reasons: -
The application under section 10 having admitted and consequential orders
having been passed by the Adjudicating Authority, pursuant to notice under section
15 of the ‘I and B Code’ 2016 if any ‘public depositor’ applies showing due of debt
claiming itself as ‘operational creditor’ and the Resolution Professional or the
Tribunal do not accept the claim on the ground that they are not ‘financial creditor’,
we allow the appellant to raise the question before the Tribunal and if any adverse
decision is given by the Tribunal, it will be open to the appellant to raise the issue
before this Appellate Tribunal.
The appeal stands disposed of with the aforesaid observation. No cost.
NCLAT ORDERS 875
NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI

Company Appeals (AT) (Insolvency) No.3 of 2017
IN THE MATTER OF:
Sree Metaliks Ltd. ...Appellants
Vs
M/s Srei Equipment Finance Ltd. ...Respondents
Present: Mr. Vivek Sibal and Mr. Ramesh Gopinathan, Advocates for the appellants.
Mr. Gopal Jain, Sr. Advocate with As Chinmayee Chandra, Advocate alongwith
Mr. Dheeraj Kumar Sharma, PCS, Mr. Aman Nijhawan, PCS and Ms. Nitu Poddar,
PCS.
ORDER
21.02.2017- The appellant has challenged the order dated 30th January, 2017
passed by the National Company Law Tribunal, Kolkata Bench, Kolkata in Company
Petition No. 16/2017.
Ld. Counsel for the appellant submits that he has no objection to the admission of
the Insolvency Petition but has objection with regard to appointment of “Interim
Resolution Professional (IRP)” under the “Insolvency and Bankruptcy Code 2016”
for the reasons pleased in the appeal.
Learned counsel for Respondent on instructions submits that the “Interim
Resolution Professional” will step down today without prejudice to the rights and
contentions of the Respondent. The Respondent will provide another name of the
“Interim Resolution Professional” who will function during the rest of the period
and as may be ordered by the NCLT. He further submits that in the meeting of
Committee of Creditors it will be decided as to who will be the “Interim Resolution
Professional/Insolvency Professional” whose name shall be placed before the
National Company Law Tribunal, Kolkata Bench for consideration for appointment
as IRP/IP
In view of the submissions made by the Learned Counsel for the Respondent, no
further order required to be passed. The appeal stands disposed of.
ABOUT
ICSI INSOLVENCY PROFESSIONALS AGENCY
The ICSI Insolvency Professionals Agency (ICSI IPA) is a Section 8

Company, incorporated under the Companies Act, 2013 and is a
wholly owned subsidiary of the Institute of Company Secretaries of
India. The ICSI IPA is registered as an Insolvency Professional Agency
with the Insolvency and Bankruptcy Board of India (IBBI) and is one of
the vital institutions in implementation of the Code. It is cast with the
responsibility of not only enrolling, educating, training, monitoring
the performance of the members practicing as Insolvency
Professionals (IPs) and laying down the standards of professional
conduct for them but also to develop and further advance the law
relating to insolvency in India under the aegis of the Code.

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Printed at Chandu Press/500/May, 2017

The Indian economy witnessed an era of economic liberalization in 1990s.

The institutional mechanism, adjudication process and time bound

Since the Code is a new piece of legislation, therefore, the IBC-

I compliment the Institute of Company Secretaries of India (ICSI) IPA for

The Insolvency and Bankruptcy Code is built with strong institutional

“IBC-Case Law Compendium (with Case Briefs)” is a compendium of orders

I commend the dedicated efforts of the team ICSI Insolvency

CS (DR.) SHYAM AGRAWAL

The Insolvency and Bankruptcy Code, 2016 (“Code”) provides for a

This publication of ICSI Insolvency Professionals Agency titled “IBC – A

Sl. Particulars Page

2 New Delhi Bench 9 4 5

1 Palogix Infrastructure ICICI Bank 30.03.2017 Rejected No No

1 Keshav Sponge & Keshav Sponge & Energy 16.02.2017 Admitted No No

ORDERS PASSED BY KOLKATA BENCH-II (upto 30th April, 2017)

M/S HOTEL GAUDAVAN PRIVATE LIMITED

Name of the Financial Creditor/ Alchemist Asset Reconstruction Company

Company Petition No. CP No. (IB)23/PB/2017

Date of Order 31.03.2017

Section involved Section 7 of IBC, 2016 (Code)

Amount involved Rs. 23.50 Crores

Status of Application Admitted

Brief Facts of the Case

SARFAESI Act which was challenged successfully by the CD on the ground

Grounds of Admission and Details of the Order

BEFORE THE PRINCIPAL BENCH NATIONAL COMPANY LAW

to recover its dues of Rs.39,69,10,137.88/-. However, the State Bank of India

as grant a moratorium in terms of Section 14 of the IBC to be enjoyed by the

(CHIEF JUSTICE M.M. KUMAR)

INTERNATIONAL RECREATION AND AMUSEMENT LTD.

Name of the Corporate Debtor International Recreation and Amusement

Company Petition No. (IB)-68(PB)/2017

Bench NCLT, Special Bench, New Delhi

Date of the Order 28.04.2017

Section involved Section 8 of IBC, 2016 (Code)

Status of Application Admitted

Brief Facts of the Case:

6. Subsequently, the OC issued a notice for winding up under the provisions

Grounds of Admission and Details of the Order

BEFORE THE NATIONAL COMPANY LAW TRIBUNAL, SPECIAL

1. The Petitioner categorizing himself as ‘Operational Creditor’ has approached

agreement and the Completion Certificate issued by the Corporate Debtor, as

Interim Resolution Professional within a period of 10 (ten) days as mandated

M/S ERA INFRA ENGINEERING LTD.

Name of Operational Creditor/ Prideco Commercial Projects Pvt. Ltd.

Company Petition No. 26(ND) of 2017

Date of Order 12.04.2017

Section involved Section 9 of IBC, 2016 (Code)

Amount Involved Rs. 68,23,328/- along with interest

Status of Application Admitted

Brief facts of the case

Grounds of Admission and Details of the order

earliest cheque dishonoured was dated 15.03.2014 and present application

BEFORE THE NATIONAL COMPANY LAW TRIBUNAL, PRINCIPAL

BEFORE THE NATIONAL COMPANY LAW TRIBUNAL, PRINCIPAL

1. The petitioner, M/s Prideco Commercial Projects Private Limited have

4. EILE-EPC/2009-10/304, Dt. 01.06.2009 value Rs. 3,66,240/-