# In the matter of Neeraj Jain Vs Yes Bank Ltd & Anr CA(AT)(Insolvency) 323 -2019

> NCLAT judgment dated 2019-04-10. Citation: TCN-2019-NCLAT-00682. This is an appeal preferred by Mr. Neeraj Jain, a shareholder of M/s. Namo Alloys Pvt. Ltd.…

- **Court:** NCLAT
- **Order date:** 10 Apr 2019
- **Citation:** TCN-2019-NCLAT-00682
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/neeraj-jain-vs-yes-bank-ltd-anr-ca-08ff1348

## Summary

### Background

This is an appeal preferred by Mr. Neeraj Jain, a shareholder of M/s. Namo Alloys Pvt. Ltd. (the Corporate Debtor), against an order dated March 25, 2018, passed by the Adjudicating Authority (National Company Law Tribunal), Principal Bench, New Delhi. The order initiated the Corporate Insolvency Resolution Process against the Corporate Debtor pursuant to an application under Section 7 of the Insolvency and Bankruptcy Code, 2016. The appellant contends that bank officials fraudulently withdrew amounts from the Corporate Debtor's account, leading to the filing of FIR No. 222/2018. The appellant argues that an amount of Rs. 23 Crores was fraudulently withdrawn, and had this amount remained in the account, the Corporate Debtor would have been able to pay its dues to the

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## Facts

Mr. Neeraj Jain, a shareholder of M/s. Namo Alloys Pvt. Ltd. (Corporate Debtor), filed an appeal against the order of the Adjudicating Authority (NCLT) initiating Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor under Section 7 of the Insolvency and Bankruptcy Code (IBC). The appellant alleged that bank officials fraudulently withdrew amounts from the Corporate Debtor's account, leading to the filing of FIR No. 222/2018. The appellant claimed that Rs. 23 Crores was fraudulently withdrawn, and had this amount remained in the account, the Corporate Debtor would have been able to pay its dues to the Financial Creditors. The Chief Financial Officer of the Corporate Debtor was allegedly involved in signing forged checks and withdrawing from the

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## Issues and analysis

### Issue 1: Whether the pendency of a criminal case relating to misappropriation of funds by the Chief …

**Ratio:** An application under Section 7 of the Insolvency and Bankruptcy Code is an independent

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**Reasoning:** The court reasoned that the Bank, which is the Financial Creditor, is a separate entity

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**Interpretation:** Section 7 of the IBC provides a mechanism for initiating CIRP upon the

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**Application:** In this case, the court applied the ratio and reasoning to the specific facts

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## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…; +1 more
- **Appellants:** Neeraj…
- **Respondents:** M/s. Namo Alloys…; Yes Bank…

## Timeline

- **2018-03-25 — Order by Adjudicating…**: The Adjudicating Authority (National Company Law Tribunal), Principal Bench, New Delhi,…
- **2019-04-10 — Appeal F…**: Mr. Neeraj Jain, Shareholder of ‘M/s. Namo Alloys Pvt. Ltd.’- (‘Corporate Debtor')…

## 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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