# In the matter of Rajesh Kedia Vs. Phoenix ARC Private Limited and Anr., CA (AT) (Insolvency) No. 996 of 2021

> NCLAT judgment dated 2022-04-11. Citation: TCN-2022-NCLAT-00546. The appeal was filed by the Suspended Director of Ajanta Paper and General Products Limited,…

- **Court:** NCLAT
- **Order date:** 11 Apr 2022
- **Citation:** TCN-2022-NCLAT-00546
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/rajesh-kedia-vs-phoenix-arc-private-limited-and-anr-ca-04547cd3

## Summary

### Background

The appeal was filed by the Suspended Director of Ajanta Paper and General Products Limited, challenging the order dated 07/10/2021 passed by the National Company Law Tribunal, Mumbai Bench, which admitted an application under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority admitted the application based on outstanding Non-Convertible Debentures and acknowledgement of debt in the balance sheet. The appellant argued that the claim included excessive interest and was barred by limitation.

## Facts

Rajesh Kedia, the Ex-Director of Ajanta Paper and General Products Ltd., filed an appeal against the order of the National Company Law Tribunal (NCLT), Mumbai Bench, which admitted a Section 7 application under the Insolvency and Bankruptcy Code (IBC). The NCLT's decision was based on the existence of outstanding Non-Convertible Debentures and the acknowledgement of debt in the balance sheet of Ajanta Paper. UTI had advanced financial assistance to Ajanta Paper in the form of subscription of Secured Redeemable Non-Convertible Debentures. UTI issued a recall notice for default of debentures. UTI accepted a proposal to settle the claims. UTI assigned its debt to Phoenix ARC Private Limited. Phoenix ARC Private Limited filed Section 7 Application under the Code. The

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was justified in admitting the Section 7 application against the …

**Ratio:** The Hon'ble Supreme Court in ‘M/s. Innoventive Industries Ltd.' Vs. ‘ICICI & Anr.',

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**Reasoning:** The court considered the balance sheets from 2003 to 2019 and found acknowledgements of

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**Interpretation:** The court interpreted Section 7 of the IBC and the definition of 'claim' to

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

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## Parties

- **Judges:** Ashok Bh…; Alok Sriv…; +1 more
- **Appellants:** Rajesh…
- **Respondents:** Ajanta Paper &…; Phoenix Arc…
- **Advocates:** Vishesh…; Ayush…; +3 more

## Timeline

- **1998-02-16 — Sanction…**: Sanction letter for financial…
- **1998-05-04 — Modification…**: Letter of modification related…

## 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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