# In the matter of Adarsh Jhunjhunjwala vs. State Bank of India & Anr. WPO 1548 of 2021

> HC judgment dated 2021-12-24. Citation: TCN-2021-HC-00001. The writ petition seeks intervention against an order dated 18th October 2021, passed by the…

- **Court:** HC
- **Order date:** 24 Dec 2021
- **Citation:** TCN-2021-HC-00001
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/gauhati-high-court-kohima/adarsh-jhunjhunjwala-vs-state-bank-of-india-anr-wpo-1548-of-2021-964fe082

## Summary

### Background

The writ petition seeks intervention against an order dated 18th October 2021, passed by the Reviewing Authority regarding Wilful Defaulter proceedings initiated by the State Bank of India. The bank had communicated the order to RBI, CIBIL, and other sites. The petitioner, Adarsh Jhunjhunwala, is contesting the proceedings, arguing that the moratorium under Section 96 of the IBC should apply to him. The bank contends that wilful defaulter proceedings are distinct from debt recovery and are not covered by the moratorium under Section 96. The petitioner was associated with JVL Agro Industries Ltd, which enjoyed credit facilities from the bank. Insolvency proceedings were initiated against JVL Agro Industries Ltd under Section 7 of the IBC.

## Facts

M/s. JVL Agro Industries Ltd was a constituent of State Bank of India and enjoyed credit facilities. The petitioner, Adarsh Jhunjhunwala, and his family controlled the majority shareholding in JVL Agro Industries Ltd. Jhunjhunwala was also a promoter/director and the main person behind the corporate debtor, M/s. JVL Agro Industries Ltd. Insolvency proceedings, being CP (IB) No. 223/ALD/2018, were initiated against JVL Agro Industries Ltd under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC). The resolution plan for JVL failed, and the company was directed to be wound up. The bank issued a show-cause notice to Jhunjhunwala under the Wilful Defaulter Guidelines on 7th November 2019. During the pendency of these proceedings, an application under Section 95 of

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## Issues and analysis

### Issue 1: Whether the moratorium under Section 96 of the …

**Ratio:** The moratorium under Section 96 of the IBC is restricted to proceedings for recovery of

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**Reasoning:** The court reasoned that the object and purpose of wilful defaulter proceedings are

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**Interpretation:** The court interpreted Section 96 narrowly, emphasizing its focus on debt

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**Application:** The court applied this ratio to the facts of the case, finding that the

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## Parties

- **Judges:** RAJASEKHAR…
- **Appellants:** ADARSH JHUNJHUNJWA…
- **Respondents:** JVL Agro Industrie…; State Bank of…

## Timeline

- **2018-01-01 — Insolvency Proceedings…**: Insolvency proceedings, being CP (IB) No. 223/ALD/2018, were initiated against JVL Agro…
- **2019-11-07 — Show-Cause Noti…**: The bank issued a show-cause notice to the petitioner under the Wilful Defaulter…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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