# In the matter of B.Rajesh Vs. Union of India,  Rep. by its,  Ministry of Corporate Affairs and Ors. WP.Nos.31140 of 2019 and 31432 of 2019 and other petitions

> HC judgment dated 2020-09-03. Citation: TCN-2020-HC-00016. The case involves two writ petitions (WP.No.31140 of 2019 and WP.No.31432 of 2019) connected to…

- **Court:** HC
- **Order date:** 3 Sept 2020
- **Citation:** TCN-2020-HC-00016
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-chandigarh-bench/brajesh-vs-union-of-india-rep-by-its-ministry-of-corporate-affairs-and-ors-wpnos-def5ae99

## Summary

### Background

The case involves two writ petitions (WP.No.31140 of 2019 and WP.No.31432 of 2019) connected to M/s. Everon Castings Private Limited. Mr. Rajesh, the petitioner in WP.No.31140 of 2019, is the founder director of the company. Mrs. Dhanalakshmi, the petitioner in WP.No.31432 of 2019, is a third-party guarantor who provided collateral securities for the company to obtain credit facilities from State Bank of India. Everon Castings, established in 2008, faced financial difficulties due to a crash in crude oil prices in 2014-2015. State Bank of India took over the existing loan facilities from Karur Vysya Bank in 2017. An operational creditor initiated Corporate Insolvency Resolution Process (CIRP) against the company, which was admitted by the National Company Law Tribunal

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## Facts

M/s. Everon Castings Private Limited, established in 2008, faced financial difficulties due to a crash in crude oil prices in 2014-2015. State Bank of India took over the existing loan facilities from Karur Vysya Bank in 2017. An operational creditor initiated Corporate Insolvency Resolution Process (CIRP) against the company, which was admitted by the National Company Law Tribunal (NCLT) on 29.12.2017. Mr. Rajesh, the founder director of the company, filed WP.No.31140 of 2019. Mrs. Dhanalakshmi, a third-party guarantor, filed WP.No.31432 of 2019, challenging the declaration of Non-Performing Asset (NPA) by State Bank of India. The Managing Director of the company approached the NCLT seeking exclusion of 120 days from the CIRP and other reliefs, but the petition was

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## Issues and analysis

### Issue 1: Whether the declaration of Non-Performing Asset (NPA) by the financial creditor (State Bank of …

**Ratio:** The declaration of NPA during the CIRP and the applicability of moratorium are governed

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**Reasoning:** The court considered the arguments presented by both sides regarding the legality of the

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**Interpretation:** The court interpreted the provisions of the Insolvency and Bankruptcy Code,

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**Application:** The court applied the principles of the Insolvency and Bankruptcy Code, 2016,

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## Parties

- **Judges:** M.M. SUN…; R.HEMAL…
- **Appellants:** B.Raj…
- **Respondents:** M/s.Everon…; Union of…
- **Advocates:** N.L. R…; E.Jayash…; +1 more

## Timeline

- **2008-01-01 — Establishment of Everon…**: M/s.Everon Castings…
- **2010-01-01 — Commencement of…**: Everon Castings…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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