# In the matter of Ramkrishna Electricals Ltd Vs. Atul Rajwadkar & Ors. Company Appeal (AT)(Insolvency) No. 983 of 2020

> NCLAT judgment dated 2021-09-02. Citation: TCN-2021-NCLAT-00109. The appeal was filed by Ramkrishna Electricals Ltd. under Section 61 of the Insolvency and…

- **Court:** NCLAT
- **Order date:** 2 Sept 2021
- **Citation:** TCN-2021-NCLAT-00109
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/ramkrishna-electricals-ltd-vs-atul-rajwadkar-ors-company-appeal-1111c1f5

## Summary

### Background

The appeal was filed by Ramkrishna Electricals Ltd. under Section 61 of the Insolvency and Bankruptcy Code, 2016, against the order dated 11.09.2020 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai. The Appellant sought to set aside the impugned order and requested that Respondent No.2 & 3, the erstwhile Directors of the Corporate Debtor in Corporate Insolvency Resolution Process (CIRP), deposit the money. The Appellant is a manufacturer and distributor of transformers and fabrications. They supplied goods to the Corporate Debtor, Enestee Engineering Limited (EEL), during the financial year 2016-17 and 2017-18. The Appellant went under CIRP vide the Adjudicating Authority order 17.09.2019.

## Facts

Ramkrishna Electricals Ltd. (Appellant) filed an appeal against the order of the Adjudicating Authority (NCLT, Mumbai) concerning Enestee Engineering Limited (EEL), the Corporate Debtor. The Appellant supplied goods to EEL during the financial years 2016-17 and 2017-18, with a balance amount of Rs. 2,66,75,764/- remaining outstanding. EEL was later admitted into CIRP. The Appellant received payments from EEL's bank account between 23.07.2019 and 15.10.2019, which the Adjudicating Authority ordered to be refunded. The Appellant claims they were unaware of EEL being under CIRP when the payments were received and that the payments were for dues in the ordinary course of business. The Liquidator for EEL argued that the Appellant withdrew funds during the CIRP, violating

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## Issues and analysis

### Issue 1: Whether the withdrawal of funds by the Appellant (Ramkrishna Electricals Ltd.) from the Corporate …

**Ratio:** Section 14 of the Insolvency and Bankruptcy Code, 2016, imposes a moratorium on the

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**Reasoning:** The court reasoned that any withdrawal of funds from the Corporate Debtor's account

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**Interpretation:** Section 14 is interpreted strictly to prevent any actions that could diminish

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**Application:** The court applied the ratio to the facts of the case, finding that the

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## Parties

- **Judges:** Jarat Kuma…; Ashok Kumar…
- **Appellants:** Ramkrishna…
- **Respondents:** Enestee Engineerin…; Atul Rajw…

## Timeline

- **2019-07-23 — Payment Re…**: Appellant received payment from…
- **2019-09-17 — CIRP Ord…**: Corporate Debtor admitted into…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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