# In the matter of Krystal Stone Exports Ltd. vs. Stressed Assets Stabilization Fund & Anr.

> NCLAT judgment dated 2024-10-16. Citation: TCN-2024-NCLAT-00156. The appeal was filed against an order dated 03.05.2024, which admitted an application under…

- **Court:** NCLAT
- **Order date:** 16 Oct 2024
- **Citation:** TCN-2024-NCLAT-00156
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/krystal-stone-exports-ltd-vs-stressed-assets-stabilization-fund-anr-d642fa95

## Summary

### Background

The appeal was filed against an order dated 03.05.2024, which admitted an application under Section 7 of the Code, 2016 by Stressed Assets Stabilization Fund (Financial Creditor) against Krystal Stone Exports Ltd. (Corporate Debtor). The Corporate Debtor, Krystal Stone Exports Ltd., filed the appeal through one of its directors, Mr. B.D Agarwal, authorized by a board resolution dated 01.12.2023. A preliminary objection was raised regarding the maintainability of the appeal, arguing that it was filed by the CD through its director authorized by the board resolution dated 01.12.2023.

## Facts

Stressed Assets Stabilization Fund (Financial Creditor) initiated insolvency proceedings against Krystal Stone Exports Ltd. (Corporate Debtor) under Section 7 of the Code, 2016. The application was admitted on 03.05.2024. Krystal Stone Exports Ltd., through its director Mr. B.D Agarwal authorized by a board resolution dated 01.12.2023, filed an appeal against the admission order. The respondent raised a preliminary objection, arguing that the appeal was not maintainable because it was filed by the Corporate Debtor through its director. The respondent cited the Supreme Court's decision in Innoventive Industries Ltd. to support their argument that once an insolvency professional is appointed, the erstwhile directors cannot maintain an appeal on behalf of the company. The

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## Issues and analysis

### Issue 1: Whether the appeal filed by the Corporate Debtor through its director is maintainable, considering …

**Ratio:** Once an insolvency professional is appointed to manage the company, the erstwhile

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**Reasoning:** The court relied on the decision in Innoventive Industries Ltd., which established that

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**Interpretation:** The legal issue revolves around the authority of the Corporate Debtor's

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**Application:** The ratio of Innoventive Industries Ltd. was applied to the facts of the case.

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## Parties

- **Judges:** Rakesh Kuma…; Naresh Sa…; +1 more
- **Respondents:** Krystal Stone…; Stressed Assets…

## Timeline

- **2023-12-01 — Board Reso…**: Board resolution authorizing Mr. B.D Agarwal…
- **2024-05-03 — Admission of Ap…**: Application under Section 7 of the Code, 2016 by Stressed Assets Stabilization Fund…

## 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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