# In the matter of Rakesh Arora & Anr. vs. Acute Daily Media Pvt. Ltd. & Ors.

> NCLAT judgment dated 2025-03-07. Citation: TCN-2025-NCLAT-00175. These are two appeals challenging the order dated 12.06.2024 passed by the Adjudicating…

- **Court:** NCLAT
- **Order date:** 7 Mar 2025
- **Citation:** TCN-2025-NCLAT-00175
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/rakesh-arora-anr-vs-acute-daily-media-pvt-ltd-ors-5046ed6d

## Summary

### Background

These are two appeals challenging the order dated 12.06.2024 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi Bench, Court-II in Company Petition (IB) No.50 (PB) 2021. The Adjudicating Authority allowed IA No.3602 of 2022 filed under Section 65 of the IBC and recalled the order dated 17.05.2022 admitting Section 7 application filed by the financial creditor. The Adjudicating Authority issued a Show Cause Notice to the financial creditors- M/s. Acute Daily Media Pvt. Ltd. & Ors. as to why penalty as stipulated under Section 65(1) should not be imposed. Company Appeal (AT) (Ins.) No.1608 of 2024 was filed by Rockman Advertising and Marketing (India) Ltd., a shareholder of M/s. Sharp Eye Advertising Pvt. Ltd.- the corporate debtor.

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## Facts

An application under Section 7 was filed by Respondent Nos.1 to 6 claiming to be financial creditors of corporate debtor- M/s. Sharp Eye Advertising Pvt. Ltd. The Adjudicating Authority vide order dated 17.05.2022 admitted Section 7 application and initiated CIRP process against M/s. Sharp Eye Advertising Pvt. Ltd. After Section 7 application was admitted, an IA No.3602 of 2022 was filed by Appellant- Rockman Advertising and Marketing (India) Ltd. claiming to be majority shareholder of the corporate debtor. The Appellants claimed in the application that Section 7 application was filed fraudulently with malicious intent by financial creditors in collusion with the corporate debtor and its directors. An intervention petition being IA No.36 of 2022 was filed by Rakesh

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority ought to have imposed a penalty on the financial creditors and …

**Ratio:** Section 65 of the IBC is a penal provision and must be strictly construed. The expression

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**Reasoning:** The Tribunal reasoned that Section 65 of the IBC is a penal statute and must be strictly

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**Interpretation:** The court interpreted Section 65 of the IBC to determine whether it allows for

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**Application:** The Tribunal applied the principle that penal statutes must be strictly

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## Parties

- **Judges:** Ashok Bh…
- **Appellants:** Rakesh…
- **Respondents:** Sharp Eye…; Acute Daily Media…
- **Advocates:** Rohit G…; Akshita…; +5 more

## Timeline

- **2022-05-17 — Order by Adjudicating…**: Adjudicating Authority admitted Section 7 application and initiated CIRP process against…
- **2022-01-01 — IA No.3602…**: IA No.3602 of 2022 was filed by Appellant- Rockman Advertising and Marketing (India) Ltd.…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(11) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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