# In the matter of Mr. KN Devdass, Suspended Director Of Cema Electric Lighting Products India Pvt Ltd Vs M/s. Overdrive Electronics (P) Ltd.

> NCLAT judgment dated 2024-09-24. Citation: TCN-2024-NCLAT-00181. The case involves an appeal against an order passed by the National Company Law Tribunal…

- **Court:** NCLAT
- **Order date:** 24 Sept 2024
- **Citation:** TCN-2024-NCLAT-00181
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/mr-kn-devdass-suspended-director-of-cema-electric-lighting-products-india-pvt-lt-6054e21b

## Summary

### Background

The case involves an appeal against an order passed by the National Company Law Tribunal (NCLT), Chennai Bench, in a corporate insolvency resolution process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code (IBC). The appellant, a suspended director of Cema Electric Lighting Products India Pvt Ltd (the Corporate Debtor), challenged the NCLT's order, arguing that the NCLT failed to consider objections raised regarding the operational creditor's claim. The appellant contended that the NCLT did not properly account for defective goods returned by distributors and the corresponding credit adjustments that should have been made to the operational creditor's claim. The respondent, Overdrive Electronics (P) Ltd., initiated the CIRP. The appellant argued that the

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## Facts

Mr. KN Devdass, the suspended director of Cema Electric Lighting Products India Pvt Ltd, filed an appeal against an order by the National Company Law Tribunal (NCLT), Chennai Bench. The appeal, numbered Company Appeal (AT) (CH) (Ins) No.299/2024, arises from CP/IB/173(CHE)/2023. Overdrive Electronics (P) Ltd. initiated CIRP against Cema Electric. Devdass argued that the NCLT failed to consider objections regarding the operational creditor's claim, specifically concerning defective goods returned by distributors and the corresponding credit adjustments. He submitted that the operational creditor, Overdrive Electronics, had not extended cooperation in inspecting the defective liquidation estate. The appellant also raised objections on 14.03.2024, detailing the amount in

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## Issues and analysis

### Issue 1: Whether the NCLT's order is vitiated due to non-consideration of the objections raised by the …

**Ratio:** The principle that a failure to consider objections raised by a party can vitiate an

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**Reasoning:** The tribunal reasoned that the NCLT's failure to record specific findings on the

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**Interpretation:** This issue involves the interpretation of the adjudicating authority's duty to

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**Application:** The ratio and reasoning were applied to the specific facts of the case, where

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## Parties

- **Judges:** Sharad Kumar…; Jatindranat…
- **Appellants:** KN Dev…
- **Respondents:** Cema Electric…; M/s. Overdrive…
- **Advocates:** P.J. Srig…; Anuj Kumar…

## Timeline

- **2023-01-01 — CP/IB/173(CH…**: Proceedings initiated before the Adjudicating Authority (National Company Law Tribunal',…
- **2024-01-30 — Order by Hon'ble…**: Order passed by the Hon'ble Tribunal regarding inspection of defective goods, which was…

## 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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