# In the matter of Tata Steel BSL Ltd. Vs. Varsha & Anr. Writ Petition No. 8620 of 2018

> HC judgment dated 2019-03-28. Citation: TCN-2019-HC-00017. This writ petition challenges the order of the Trial Court rejecting the petitioner's application…

- **Court:** HC
- **Order date:** 28 Mar 2019
- **Citation:** TCN-2019-HC-00017
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-chandigarh-bench/tata-steel-bsl-ltd-vs-varsha-anr-writ-petition-no-8620-of-2018-c88c171e

## Summary

### Background

This writ petition challenges the order of the Trial Court rejecting the petitioner's application for dismissal of a suit filed by the respondent for recovery of an amount. The petitioner contends that the corporate insolvency resolution process triggered under the Insolvency and Bankruptcy Code (IBC) and the respondent's participation in it render the suit non-maintainable. The respondent, an operational creditor, filed a suit for recovery of Rs. 38,89,674.14 against Bhushan Steel Ltd. The petitioner, Tata Steel BSL Ltd., submitted a resolution plan under the IBC, which was approved. The petitioner then sought dismissal of the respondent's suit, arguing that the resolution plan extinguished the liability. The Trial Court rejected this application, leading to the

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## Facts

Varsha Maheshwari, a proprietor, filed a summary suit in 2011 against Bhushan Steel Ltd. for recovery of Rs. 38,89,674.14 for supply of magnetite powder. Bhushan Steel disputed the quality of the supplied material. The suit was at the stage of recording evidence when the IBC was enacted in 2016. State Bank of India initiated corporate insolvency resolution process against Bhushan Steel under Section 7 of IBC. Varsha Maheshwari filed a claim as an operational creditor. Tata Steel BSL Ltd. submitted a resolution plan, which was approved by the National Company Law Tribunal on 2018-05-15. Appeals against this order were dismissed by the National Company Law Appellate Tribunal on 2018-08-10. Tata Steel BSL Ltd. then filed an application in the civil suit to dismiss it,

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## Issues and analysis

### Issue 1: Whether the Trial Court was justified in rejecting the application filed by the petitioner for …

**Ratio:** The IBC aims to revive corporate debtors while balancing the interests of creditors. A

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**Reasoning:** The Trial Court correctly recognized that the resolution plan acknowledged the

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**Interpretation:** The IBC's provisions, particularly sections 63 and 238, should not be

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**Application:** The resolution plan recognized the respondent's claim and allocated funds for

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## Parties

- **Judges:** MANISH P…
- **Appellants:** M/S. TATA STEEL…
- **Respondents:** Bhushan Ste…; Varsha W/o. Ajay…

## Timeline

- **2011-01-01 — Suit Fil…**: Varsha Maheshwari filed a suit against Bhushan Steel Ltd. for recovery of Rs.…
- **2016-01-01 — IBC Enac…**: The Insolvency and Bankruptcy…

## 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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