# In the matter of Devashree Developers Pvt. Ltd. & Ors. vs. Aravali Cylinders Pvt. Ltd. & Ors.

> NCLAT judgment dated 2024-08-05. Citation: TCN-2024-NCLAT-00283. The appeal was filed against an order dated 29.08.2023 by the Adjudicating Authority…

- **Court:** NCLAT
- **Order date:** 5 Aug 2024
- **Citation:** TCN-2024-NCLAT-00283
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/devashree-developers-pvt-ltd-ors-vs-aravali-cylinders-pvt-ltd-ors-6b010c31

## Summary

### Background

The appeal was filed against an order dated 29.08.2023 by the Adjudicating Authority (National Company Law Tribunal, New Delhi) dismissing an application filed by Leelawati Mahipal and Sanjay Mahipal, shareholders of Aravali Cylinders Pvt. Ltd. (Corporate Debtor), under Sections 60(5), 65, and 75 of the Code. The application was dismissed because it was filed before the admission of an application under Section 7 of the Code. The appellant argued that the Tribunal erred in dismissing the application solely on the grounds that it was filed before the admission of the Section 7 application, which they claim is contrary to the law established by the Supreme Court.

## Facts

Devashree Developers Pvt. Ltd. filed an appeal against an order dated 29.08.2023. Leelawati Mahipal and Sanjay Mahipal, shareholders of Aravali Cylinders Pvt. Ltd. (Corporate Debtor), jointly filed an application under Section 60(5), 65 and 75 of the Code. The application was dismissed because it was filed before the admission of the application filed under Section 7 of the Code. The appellant argued that the Tribunal erred in dismissing the application solely on the grounds that it was filed before the admission of the Section 7 application. The court considered precedents including Beacon Trusteeship Limited Vs. Earthcon Infracon Pvt. Ltd., Ashmeet Singh Bhatia Vs. Sundrm Consultants Pvt. Ltd., and Shree Ambica Rice Mill Vs. Kaneri Agro Industries Ltd. The court

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## Issues and analysis

### Issue 1: Whether an application filed under Section 65 of the Code is maintainable after the filing of the …

**Ratio:** The ratio is that an application under Section 65 of the Code is maintainable after an

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**Reasoning:** The court reasoned that the Tribunal's dismissal of the application solely on the ground

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**Interpretation:** Section 65 of the IBC is interpreted to allow for applications alleging

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**Application:** In this specific case, the court applied the ratio by setting aside the

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## Parties

- **Judges:** Rakesh Kuma…; Naresh Sa…; +1 more
- **Appellants:** Devashree…
- **Respondents:** Aravali Cylinders…
- **Advocates:** Sumesh D…; Vatsala…; +3 more

## Timeline

- **2023-08-29 — Order by Adjudicating…**: The Adjudicating Authority (National Company Law Tribunal, New Delhi) passed an order…
- **2024-08-05 — NCLAT Or…**: The NCLAT allowed the appeal, set aside the impugned order, restored the application, and…

## 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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