# In the matter of Mr. Lagadapati Ramesh Vs. Mrs. Ramanathan Bhuvaneshwari CA(AT)(Ins) No. 574 of 2019

> NCLAT judgment dated 2019-09-20. Citation: TCN-2019-NCLAT-00259. The case involves appeals against orders passed by the National Company Law Tribunal (NCLT)…

- **Court:** NCLAT
- **Order date:** 20 Sept 2019
- **Citation:** TCN-2019-NCLAT-00259
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/mr-lagadapati-ramesh-vs-mrs-ramanathan-bhuvaneshwari-ca-1c8f5841

## Summary

### Background

The case involves appeals against orders passed by the National Company Law Tribunal (NCLT) in relation to a Corporate Insolvency Resolution Process (CIRP) initiated against M/s. Bhuvana Infra Projects Private Limited. The Resolution Professional (RP) filed an Interlocutory Application under Section 66 of the Insolvency and Bankruptcy Code (IBC), seeking to attach the personal assets of certain individuals allegedly responsible for defrauding creditors. The NCLT directed an investigation by the Serious Fraud Investigation Office (SFIO). The appellants challenged this order, arguing that the NCLT lacked the authority to directly order an SFIO investigation.

## Facts

The Corporate Insolvency Resolution Process (CIRP) was initiated against M/s. Bhuvana Infra Projects Private Limited. The Resolution Professional (RP) filed an application alleging fraudulent transactions and diversion of funds by the company's promoters to group companies. The RP sought attachment of personal assets of Mr. Pratap Kunda, Mr. Sanjay Raj, and Mr. Srinivas to recover dues of Rs. 461,163,402. The RP claimed the Corporate Debtor had become a shell company with no business activity. The RP alleged promoters were not cooperating and had diverted assets to group companies. Audited financial statements revealed significant receivables from group companies, including M/s. Prisha Properties India Pvt. Ltd., M/s. Commune Properties Pvt. Ltd., and M/s. Golden Gate

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## Issues and analysis

### Issue 1: Whether the National Company Law Tribunal (NCLT) has the power to directly order an investigation …

**Ratio:** Section 212 of the Companies Act, 2013, empowers the Central Government, not the NCLT, to

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**Reasoning:** The appellate tribunal reasoned that Section 212 explicitly vests the power to order an

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**Interpretation:** Section 212 is interpreted to mean that the NCLT cannot bypass the Central

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**Application:** The NCLAT found that the NCLT's direct order for an SFIO investigation was

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## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…; +1 more
- **Appellants:** Lagadapati…
- **Respondents:** M/s.Bhuvana Infra…; RamanathanBhuvanes…

## Timeline

- **2018-01-17 — Admission of Application…**: Application under Section 7 of…
- **2019-04-16 — Impugned Order…**: NCLT passed an order…

## 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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