# In the matter of Jaidev Laxmidas Panchmatia vs. Fanendra H Munot & Ors. Company Appeal (AT) (Insolvency) No. 840 of 2022

> NCLAT judgment dated 2023-05-25. Citation: TCN-2023-NCLAT-00495. This case involves an appeal against an order dated January 20, 2022, passed by the National…

- **Court:** NCLAT
- **Order date:** 25 May 2023
- **Citation:** TCN-2023-NCLAT-00495
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/jaidev-laxmidas-panchmatia-vs-fanendra-h-munot-ors-company-appeal-9c628358

## Summary

### Background

This case involves an appeal against an order dated January 20, 2022, passed by the National Company Law Tribunal (NCLT), Mumbai Bench, regarding the rejection of a resolution plan submitted by the appellant. The corporate debtor, LB Industries Pvt. Ltd., is a registered MSME. A Section 9 petition under the Insolvency and Bankruptcy Code, 2016, was filed by Wood Preservers Private Limited-Operational Creditor against the Corporate Debtor. Union Bank of India issued a show cause notice to the appellant and other directors, asking why they should not be declared defaulters. The appellant submitted a resolution plan, but the Union Bank of India declared the account as fraud, leading to the rejection of the plan. The Resolution Professional filed an application seeking

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## Facts

LB Industries Pvt. Ltd., a registered MSME, faced a Section 9 insolvency petition filed by Wood Preservers Private Limited. Union Bank of India issued a show cause notice to the appellant, Jaidev Laxmidas Panchmatia, and other directors, regarding their potential declaration as defaulters. The appellant submitted a resolution plan on 04.08.2020. Union Bank of India declared the account as fraud. The Resolution Professional filed an application seeking liquidation. Union Bank of India declared the borrower, promoter, and directors as willful defaulters on 25.05.2021. The appellant challenged this order, and the High Court issued an interim stay on 20.09.2021. The Adjudicating Authority directed liquidation on 20.01.2022. The appellant filed an appeal against the

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## Issues and analysis

### Issue 1: Whether the Appellant was disqualified under Section …

**Ratio:** Section 29A of the Insolvency and Bankruptcy Code disqualifies certain individuals from

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**Reasoning:** The court considered whether the appellant was a willful defaulter at the time the

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**Interpretation:** The interpretation of Section 29A hinges on the timing of the declaration of

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**Application:** The court found that the appellant could not be held to be a willful defaulter

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Jaidev Laxmidas…
- **Respondents:** LB Industries…; Fanendra H…
- **Advocates:** Fatima Baro…; Arvind…; +3 more

## Timeline

- **2019-11-13 — Show Cause…**: Union Bank of India issued a Show Cause Notice against the Appellant, Corporate Debtor…
- **2019-11-19 — Company Petition…**: Company Petition filed by 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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