# In the matter of Asset Reconstruction (India) Ltd. & Ors. Vs. R.Venkatakrishnan & Anr CA(AT)(Insolvency) No. 232 & 233-2019

> NCLAT judgment dated 23 Jul 2019. Citation: TCN-2019-NCLAT-00429. The appeals challenge a common order passed by the Adjudicating Authority (NCLT, Chennai)…

- **Court:** NCLAT
- **Order date:** 23 Jul 2019
- **Citation:** TCN-2019-NCLAT-00429
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/asset-reconstruction-india-ltd-ors-vs-rvenkatakrishnan-anr-ca-24380a19

## Summary

### Background

The appeals challenge a common order passed by the Adjudicating Authority (NCLT, Chennai) regarding the adjustment of electricity dues paid during the Corporate Insolvency Resolution Process (CIRP) and the release of funds from an escrow account to the Kerala State Electricity Board.

## Facts

Two Corporate Insolvency Resolution Processes (CIRP) were initiated against M/s. Paragon Steels (P) Ltd. and M/s. SMM Steel Re-rolling Mills Private Limited. A common Resolution Professional was appointed for both. M/s. Kerala State Electricity Board supplied electricity to the units, which was disconnected due to non-payment of dues during the CIRP period. The Adjudicating Authority, on October 26, 2018, directed the Resolution Professional to deposit Rs. 3.25 Crores in an Escrow Account for dues during the CIRP period, and the Electricity Board was directed to restore power.

…

## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was justified in directing the release of Rs. 3.25 Crores from…

**Ratio:** An Adjudicating Authority cannot pass an order for the release of funds from an escrow…

**Reasoning:** The Adjudicating Authority's order to release the escrow amount was passed after the…

**Interpretation:** The NCLAT interpreted Section 31 of the I&B Code to mean that once a Resolution…

**Application:** The Adjudicating Authority's order to release Rs. 3.25 Crores to the…

## Parties

- **Judges:** S.J. Mukhop…
- **Advocates:** For Appel…; Dinkar…; +8 more

## Timeline

- **September 15, 2017 — Outstandin…**: M/s. Paragon Steels had an outstanding payment of Rs. 2,60,47,669 and M/s. SMM Steel…
- **September 24, 2017 — Public Annou…**: Mr. R. Venkatakrishnan, the Resolution Professional, published a public announcement in…

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclat-new-delhi/asset-reconstruction-india-ltd-ors-vs-rvenkatakrishnan-anr-ca-24380a19