# In the matter of Mohan Lal Jain Vs. Insolvency and Bankruptcy Board of India WP(C) 3692-2020 and other appeals

> HC judgment dated 2020-06-29. Citation: TCN-2020-HC-00028. The case involves a petition filed by Mohan Lal Jain, who was appointed as the Insolvency…

- **Court:** HC
- **Order date:** 29 Jun 2020
- **Citation:** TCN-2020-HC-00028
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-chandigarh-bench/mohan-lal-jain-vs-insolvency-and-bankruptcy-board-of-india-wp-0fb67d84

## Summary

### Background

The case involves a petition filed by Mohan Lal Jain, who was appointed as the Insolvency Professional (IP) of Mack Soft Tech Private Limited. The Corporate Insolvency Resolution Process (CIRP) against Mack Soft Tech was initiated on 2017-08-11. Jain took over as the IP on 2018-01-31. He is alleged to have violated the terms of the moratorium by allowing amounts to flow out to a debtor, violating the provisions of the IBC. The petitioner claims no violation occurred as the monies were remitted from an escrow account maintained by HDFC Bank and were not under his control. He also claims he followed decisions of the previous IP and Committee of Creditors (CoC).

## Facts

Mohan Lal Jain was appointed as the Insolvency Professional (IP) for Mack Soft Tech Private Limited. The Corporate Insolvency Resolution Process (CIRP) against Mack Soft Tech was initiated on 2017-08-11. Jain assumed the role of IP on 2018-01-31. An allegation was made that Jain violated the moratorium terms by permitting funds to be disbursed to a debtor, thereby contravening the Insolvency and Bankruptcy Code (IBC). Jain argued that the funds were remitted from an escrow account held with HDFC Bank, and he adhered to prior decisions made by the previous IP and the Committee of Creditors (CoC). The petitioner's counsel cited similar cases where IPs received warnings for misinterpreting the IBC. The court stayed the impugned order subject to a deposit of Rs. 25 lakhs

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## Issues and analysis

### Issue 1: Whether the petitioner, Mohan Lal Jain, violated the terms of the moratorium under the Insolvency …

**Ratio:** The principle of moratorium under the IBC aims to protect the assets of the corporate

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**Reasoning:** The court considered the petitioner's argument that the funds were remitted from an

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**Interpretation:** The interpretation of the moratorium provisions under the IBC is crucial in

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**Application:** In this case, the court stayed the operation of the impugned order, indicating

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## Parties

- **Judges:** A. K. C…
- **Appellants:** Mohan Lal…
- **Respondents:** Mack Soft Tech…; Insolvency and…

## Timeline

- **2017-08-11 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP) initiated against Mack Soft Tech Private…
- **2018-01-31 — IP Appoin…**: Mohan Lal Jain took over as the Insolvency Professional (IP) for Mack Soft Tech Private…

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