# In the matter of Atibir Industries Company Limited & Ors. vs. Indian Bank

> HC judgment dated 2024-03-20. Citation: TCN-2024-HC-00112. The case involves a writ petition challenging a show-cause notice issued by the…

- **Court:** HC
- **Order date:** 20 Mar 2024
- **Citation:** TCN-2024-HC-00112
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/atibir-industries-company-limited-ors-vs-indian-bank-27ab9179

## Summary

### Background

The case involves a writ petition challenging a show-cause notice issued by the respondent-authorities for declaring the petitioners as wilful defaulters. The petitioners argue that the show-cause notice is based on an NPA classification that was previously subject to an injunction and that the notice violates Section 96 of the IBC due to a pending proceeding under Section 95 of the IBC. The respondent-Bank contends that the NPA classification is valid, the wilful defaulter proceedings are distinct from recovery proceedings, and the show-cause notice is justified.

## Facts

Atibir Industries Company Limited & Ors. filed a writ petition challenging a show-cause notice issued by Indian Bank for declaring them wilful defaulters. The petitioners, including the borrower-Company and its Directors/guarantors, were issued the notice based on a Master Circular on Wilful Defaulters issued by the Reserve Bank of India (RBI). The account of petitioner no. 1 was classified as a Non-Performing Asset (NPA) with effect from December 27, 2020. A prior writ petition restrained the respondent from selling NPAs based on this classification. The respondent-bank also initiated proceedings under Section 7 and Section 95 of the IBC, as well as recovery proceedings before the Debts Recovery Tribunal, and issued a notice under Section 13(2) of the SARFAESI

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## Issues and analysis

### Issue 1: Whether the injunction order passed by the writ court against the respondent-Bank, on the premise …

**Ratio:** A finding made at the interlocutory stage, howsoever backed by reasons, cannot be a

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**Reasoning:** The court reasons that the interim order did not stay the operation of the NPA

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**Interpretation:** The interpretation is that an interim order, especially one that does not

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**Application:** The ratio and reasoning apply to the specific facts by indicating that the

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## Parties

- **Judges:** SABYASACHI…
- **Respondents:** Atibir Industries…; Indian…

## Timeline

- **2020-09-30 — Default by Petitioner…**: Petitioner No. 1 became…
- **2020-11-30 — Time for Making Good…**: Time for making good defaults on…

## 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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