# In the matter of Su-Kam Power System Ltd. & Another vs. State of Himachal Pradesh & Others

> HC judgment dated 2024-08-21. Citation: TCN-2024-HC-00047. The case involves Su-Kam Power System Ltd. & Another (petitioners) versus State of Himachal Pradesh…

- **Court:** HC
- **Order date:** 21 Aug 2024
- **Citation:** TCN-2024-HC-00047
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/su-kam-power-system-ltd-another-vs-state-of-himachal-pradesh-others-e7842443

## Summary

### Background

The case involves Su-Kam Power System Ltd. & Another (petitioners) versus State of Himachal Pradesh & Others (respondents). The 1st petitioner is a company incorporated in 1998. The 2nd petitioner is a resident of Haryana and a citizen of India. The issue is regarding certain red entries/charge over the properties of the 1st petitioner on account of dues recoverable from the erstwhile management. The State Bank of India initiated Corporate Insolvency Resolution Process (CIRP) against the petitioner-Company due to default in financial discipline. The petition was admitted on 05.04.2018, and a Resolution Professional was appointed. The Committee of Creditors resolved to initiate liquidation proceedings, and the NCLT ordered the liquidation of the

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## Facts

Su-Kam Power System Ltd. (petitioner) underwent Corporate Insolvency Resolution Process (CIRP) initiated by State Bank of India due to financial defaults. A moratorium was imposed on 05.04.2018. Later, liquidation was ordered on 03.04.2019. During the moratorium, the Department of State Taxes & Excise, Himachal Pradesh (respondent), created a 'red entry' charge on the petitioner's properties for outstanding dues on 07.01.2020. The Liquidator treated the department's claim as an 'Operational Creditor' claim. An e-auction was conducted, and the current management acquired the company as a going concern, with the acquisition plan approved by NCLT on 11.05.2022. An ex-promoter's challenge to the NCLT order was dismissed by NCLAT and the Supreme Court. Despite the

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## Issues and analysis

### Issue 1: Whether the creation of a charge/red entry on the petitioner-Company's property by the respondents …

**Ratio:** Section 14(4) of the IBC stipulates that a moratorium imposed by the NCLT has effect from

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**Reasoning:** The court reasoned that since the red entry/charge was created on 07.01.2020, which falls

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**Interpretation:** The interpretation is that any action taken during the moratorium period that

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**Application:** The court applied the ratio to the facts by holding that the creation of the

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## Parties

- **Judges:** M.S.Ramachandra…; Satyen V…
- **Respondents:** Su-Kam Power…; State of Himachal…
- **Other parties:** Kohi…

## Timeline

- **1998-10-14 — Company Incor…**: The 1st petitioner, Su-Kam Power…
- **2018-04-05 — CIRP Admission and…**: Corporate Insolvency Resolution Process (CIRP) was initiated against the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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