# In the matter of Jagdish Prasad Saboo vs. IDBI Bank Limited

> HC judgment dated 2023-11-06. Citation: TCN-2023-HC-00020. The Letters Patent Appeal was filed against the order of the Single Judge dated 27.03.2023, which…

- **Court:** HC
- **Order date:** 6 Nov 2023
- **Citation:** TCN-2023-HC-00020
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/jagdish-prasad-saboo-vs-idbi-bank-limited-3b4c50a1

## Summary

### Background

The Letters Patent Appeal was filed against the order of the Single Judge dated 27.03.2023, which dismissed a writ petition challenging orders dated 12.05.2022 and 30.08.2022 passed by the Willful Defaulter Identification Committee (WDIC) and the Willful Defaulter Review Committee (WDRC), respectively, as well as a communication dated 16.05.2022 declaring the appellant as a 'Willful Defaulter'. The appellant, a director of Surya Exim Limited (SEL), faced proceedings under the RBI Master Circular on Willful Defaulters after SEL's account became a Non-Performing Asset (NPA).

## Facts

The appellant, a director of Surya Exim Limited (SEL), faced proceedings after SEL's account became an NPA in August 2019. The account was red-flagged on 09.10.2019, and Canara Bank conducted an internal investigation. A Forensic Auditor (SKVM & Co.) was appointed by Canara Bank and sought clarification from the appellant on 14.02.2020. The appellant claims he was unaware of the Forensic Audit Report submitted on 08.07.2020, even though he submitted his reply on 13.07.2020. The appellant requested all documents, including the Forensic Audit Report, on 18.01.2021, but received no reply. A show cause notice dated 28.05.2021 was issued to the appellant, but no documents were provided. The appellant filed Special Civil Application No.2233 of 2021, wherein an interim

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## Issues and analysis

### Issue 1: Whether the interim moratorium under Section 96 of the Insolvency and Bankruptcy Code (IBC) would …

**Ratio:** The interim moratorium under Section 96 of the IBC is 'debt-centric' and applies only to

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**Reasoning:** The court reasoned that willful defaulter proceedings aim to prevent further fraud and

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**Interpretation:** Section 96 of the IBC provides for an interim moratorium that commences on the

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**Application:** The court applied the ratio to the facts of the case, holding that the

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## Parties

- **Judges:** Sunita Ag…; ANIRUDDHA P…
- **Appellants:** MR ADITYA A…
- **Respondents:** Surya Exim…; MR BH BHAGA…
- **Other parties:** Kohi…

## Timeline

- **2019-08-01 — Account beco…**: The account of Surya Exim Limited (SEL)…
- **2019-10-09 — Account Red-…**: The account of SEL is…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 96 — Interim- moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-96)

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