# In the matter of Ayan Mallick and another vs. State Bank of India and others, WPO No. 23 of 2021

> HC judgment dated 2021-03-04. Citation: TCN-2021-HC-00032. The petitioners, former directors of M/s. A K Power Industries Private Limited, filed a writ…

- **Court:** HC
- **Order date:** 4 Mar 2021
- **Citation:** TCN-2021-HC-00032
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-chandigarh-bench/ayan-mallick-and-another-vs-state-bank-of-india-and-others-wpo-no-23-of-2021-f509f6a9

## Summary

### Background

The petitioners, former directors of M/s. A K Power Industries Private Limited, filed a writ petition challenging a show-cause notice issued by the respondent no.1-bank regarding their inclusion in the list of Wilful Defaulters. The company had taken a loan from the bank and failed to repay it. The loans were secured by the petitioners' properties and guarantees. A forensic audit was conducted in April 2019 at the bank's request. The bank declared the company's account as a 'No Fraud Account' on May 10, 2019, after a joint lenders' meeting. Subsequently, the company proposed an One-Time Settlement, which the bank accepted. Meanwhile, Corporate Insolvency Resolution Process (CIRP) was initiated against the company on October 1, 2019, by the National Company Law

…

## Facts

M/s. A K Power Industries Private Limited took a loan from State Bank of India and subsequently defaulted. The loans were secured by primary and collateral securities, including equitable mortgage of immovable properties standing in the name of the company's directors (the petitioners) and their personal guarantees. In April 2019, the bank conducted a forensic audit of the company. On May 10, 2019, the bank declared the company's account as a 'No Fraud Account'. The company proposed an One-Time Settlement, which the bank accepted. On October 1, 2019, Corporate Insolvency Resolution Process (CIRP) was initiated against the company by the National Company Law Tribunal, Kolkata Bench. On November 4, 2019, the bank issued a show-cause notice to the petitioners, asking them

…

## Issues and analysis

### Issue 1: Whether the Identification Committee had the authority to issue the show-cause notice to the …

**Ratio:** The commencement of CIRP does not automatically bar all proceedings against the directors

…

**Reasoning:** The court reasoned that the purpose of the IBC is to resolve the insolvency of the

…

**Interpretation:** The court interpreted the IBC and RBI guidelines to allow for proceedings

…

**Application:** The court applied this reasoning to the specific facts, noting that the

…

## Parties

- **Judges:** SABYASACHI…
- **Appellants:** Ayan Ma…
- **Respondents:** A.K.Power…; State Bank of…

## Timeline

- **2019-04-01 — Forensic…**: Forensic audit was carried out into the affairs of the company at the behest of the…
- **2019-05-10 — Account Decl…**: The respondent no.1 declared the account of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/high-courts-chandigarh-bench/ayan-mallick-and-another-vs-state-bank-of-india-and-others-wpo-no-23-of-2021-f509f6a9