# In the matter SAK Industries Pvt Ltd Vs. Fenance Auto Ltd CA (AT) No. 201-2017

> NCLAT judgment dated 2017-11-15. Citation: TCN-2017-NCLAT-00067. The appeal was preferred by SAK Industries Pvt Ltd, the operational creditor, against an…

- **Court:** NCLAT
- **Order date:** 15 Nov 2017
- **Citation:** TCN-2017-NCLAT-00067
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/in-the-matter-sak-industries-pvt-ltd-vs-fenance-auto-ltd-ca-5c83a4f6

## Summary

### Background

The appeal was preferred by SAK Industries Pvt Ltd, the operational creditor, against an order dated July 19, 2017, passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi. The application preferred by the appellant under Section 9 of the Insolvency and Bankruptcy Code, 2016, was rejected because the defects had not been removed within 7 days, which was considered mandatory based on a prior Appellate Tribunal decision. The respondents were notified but did not appear or dispute the facts in the appeal.

## Facts

SAK Industries Pvt Ltd, the operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority (National Company Law Tribunal), New Delhi, rejected the application because the defects were not removed within 7 days. The appellant appealed to the National Company Law Appellate Tribunal (NCLAT). The respondents were notified but did not appear. The appellant cited the Supreme Court's decision in M/s Surendra Trading Company Vs M/s Juggilal Kamlapat Jute Mills Company Ltd and Others, Civil Appeal No.8400 of 2017 etc., which held that the 7-day defect removal period is not mandatory. This Supreme Court decision is crucial because it directly contradicts the basis on which the Adjudicating Authority rejected

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## Issues and analysis

### Issue 1: Whether the 7-day period for removing defects in an application under Section 9 of the Insolvency …

**Ratio:** The Supreme Court in M/s Surendra Trading Company Vs M/s Juggilal Kamlapat Jute Mills

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**Reasoning:** The NCLAT reasoned that it was bound by the Supreme Court's decision. Since the Supreme

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**Interpretation:** The interpretation of Section 9 of the IBC, specifically regarding the timeline

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**Application:** The Supreme Court's ratio was directly applied to the facts of the case. The

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** SAK Industries…
- **Respondents:** Fenance Au…

## Timeline

- **2017-07-19 — Order by Adjudicating…**: The Adjudicating Authority (National Company Law Tribunal), New Delhi, passed an order…
- **2017-09-19 — Supreme Court…**: The Supreme Court issued a judgement in Civil Appeal No.8400 of 2017, clarifying that the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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