# In the matter of Kushal Ltd. & Anr. Vs.  Kartik Baldwa & Ors. Comp. App. (AT) (Ins.) No. 678 of 2022

> NCLAT judgment dated 2022-07-21. Citation: TCN-2022-NCLAT-00334. The case involves three appeals against a common order dated 24.03.2021 passed by the…

- **Court:** NCLAT
- **Order date:** 21 Jul 2022
- **Citation:** TCN-2022-NCLAT-00334
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/kushal-ltd-anr-vs-kartik-baldwa-ors-comp-app-a37e9a2a

## Summary

### Background

The case involves three appeals against a common order dated 24.03.2021 passed by the National Company Law Tribunal (NCLT), Ahmedabad Bench, in Interlocutory Applications (I.A.) Nos. 229, 230, and 231 of 2020. The appeals arise from the insolvency resolution process of Rainbow Papers Ltd. The Insolvency Resolution Applicants filed I.A.No. 230 of 2020 requesting the Adjudicating Authority to recall the order dated 27.02.2019 passed by the Tribunal in I.A. No. 224 of 2018 in CP (IB) No. 88/NCLT/AHM/2017 and to issue a direction for return of Rs. 30.5 crores paid by the Applicant pursuant to the resolution plan approved by the order dated 27.02.2019 passed in I.A.No.224 of 2018 in CP (IB) No. 88/NCLT/AHM/2017 and other consequences. I.A. No. 230 of 2020 was dismissed by

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## Facts

Kushal Ltd., along with Sandeep Tulsiram Agarwal, filed appeals against a common order by the National Company Law Tribunal (NCLT), Ahmedabad, concerning the insolvency resolution of Rainbow Papers Ltd. The Resolution Applicants claimed that the Resolution Professional misrepresented the production capacity of Rainbow Papers Ltd. in the Information Memorandum, leading them to submit a resolution plan based on incorrect information. The Appellants argued that the CIRP did not disclose the ongoing assessment proceedings under the Income Tax Act 1961 for the assessment year 2016-17, though they were pending at the time of issuance of Information Memorandum, calling for expression of interest. It resulted in an income tax liability of Rs. 5.22 crores. The Appellants relied

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## Issues and analysis

### Issue 1: Whether the Resolution Professional made any misrepresentation or fraudulent misrepresentation, …

**Ratio:** The Resolution Professional has a duty to provide the most updated and accurate

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**Reasoning:** The NCLAT found that the Resolution Professional had disclosed the available information

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**Interpretation:** The term 'misrepresentation' and 'fraud' are defined under Section 17 and

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**Application:** In this case, the NCLAT found no material to suggest that the Resolution

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## Parties

- **Judges:** Ashok Bh…; M. Satyanarayana…; +1 more
- **Appellants:** Kushal…
- **Respondents:** Rainbow Papers…; Committee of…

## Timeline

- **2017-09-12 — Admission of CP (IB)…**: The Adjudicating Authority admitted CP (IB) No. 88/NCLT/AHM/2017 filed by Operational…
- **2018-06-06 — Resolution Plan Placed…**: The resolution plan submitted by the appellants was placed before the Committee of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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