# In the matter of Krish Steel and Trading Private Limited & Ors. Vs. State of NCT of Delhi & Anr. CRL.M.C. 430-2022
CRL.M.A. 1959, 1960 & 1961-2022

> HC judgment dated 2022-02-01. Citation: TCN-2022-HC-00063. The case involves a petition seeking to quash a complaint filed by respondent No. 2 and an order…

- **Court:** HC
- **Order date:** 1 Feb 2022
- **Citation:** TCN-2022-HC-00063
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/krish-steel-and-trading-private-limited-ors-vs-state-of-nct-of-delhi-anr-crlmc-4-fb3b3508

## Summary

### Background

The case involves a petition seeking to quash a complaint filed by respondent No. 2 and an order dated October 30, 2021, summoning the petitioners for offenses under Sections 31(1), 74(3), and 235A of the Insolvency and Bankruptcy Code, 2016 (IBC). Petitioner No. 1 had filed an application in insolvency proceedings before the NCLT, where a Resolution Plan was approved in their favor. However, they failed to comply with the terms of the plan and deposit the required funds. Applications were filed before the NCLT, NCLAT, and the Supreme Court, with various orders passed. Despite efforts and an offer to pay ₹20 Crores, the Special Leave Petition to the Supreme Court was dismissed. Subsequently, respondent No. 2 filed a complaint under Section 74(3) of the IBC, leading to

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## Facts

Krish Steel and Trading Private Limited, the petitioner, initiated insolvency proceedings before the NCLT, where a resolution plan was approved in its favor. However, the petitioner failed to comply with the terms of the resolution plan, leading to applications before the NCLT, NCLAT, and the Supreme Court. Despite efforts to comply, the Supreme Court dismissed the Special Leave Petition. Subsequently, respondent No. 2 filed a complaint under Section 74(3) of the IBC. The Special Judge summoned not only the company (petitioner No. 1) but also its promoters and directors (petitioners No. 2, 3, and 4). The petitioners sought to quash the complaint, arguing that Section 74(3) of the IBC does not impose vicarious liability. The NCLAT's decision in 'Committee of Creditors

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## Issues and analysis

### Issue 1: Whether the summoning of petitioners No. 2, 3, and 4 (promoters/directors) was justified when the …

**Ratio:** Section 74(3) of the IBC does

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**Reasoning:** The court acknowledges a prima facie merit in the argument that Section 74(3) of the IBC

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**Interpretation:** The interpretation of Section 74(3) of the IBC is crucial in determining

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**Application:** The court applied the principle that Section 74(3) of the IBC does not impose

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## Parties

- **Judges:** MUKTA G…
- **Respondents:** KRISH STEEL AND…; STATE OF NCT OF…

## Timeline

- **2021-10-30 — Order by Speci…**: The learned Special Judge passed an order summoning the petitioners for offences…
- **2022-02-01 — Court Or…**: The Court exempts petitioners No. 2, 3, and 4 from appearing before the learned Trial…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 31(1) — Approval of resolution plan](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-31)

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