# In the matter of Reliance India Power Fund Vs. Raj Kumar Ralhan Liquidator of Su-Kam Power Systems Limited Company Appeal (AT) (Ins) No.318-2020

> NCLAT judgment dated 2020-02-24. Citation: TCN-2020-NCLAT-00382. This is an appeal against an Impugned Order dated 11th February, 2020, passed by the National…

- **Court:** NCLAT
- **Order date:** 24 Feb 2020
- **Citation:** TCN-2020-NCLAT-00382
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/reliance-india-power-fund-vs-raj-kumar-ralhan-liquidator-of-su-kam-power-systems-d333d0b7

## Summary

### Background

This is an appeal against an Impugned Order dated 11th February, 2020, passed by the National Company Law Tribunal, Principal Bench, New Delhi in CP (IB)-540 (PB)/2017. The Corporate Debtor, Su Kam Power Systems Ltd., is undergoing liquidation proceedings. Before the CIRP started, the Appellant had initiated arbitration proceedings against the Corporate Debtor, which were hit by a moratorium when CIRP started. After the liquidation order was passed, the Appellant wanted to proceed with the arbitration proceedings, but the Liquidator only appeared once and informed the Arbitrators regarding the liquidation proceedings, and thereafter did not participate, leading to the arbitration proceedings being struck.

## Facts

Reliance India Power Fund, Reliance Capital Trustee Company Limited initiated arbitration proceedings against Su Kam Power Systems Ltd. before the CIRP commenced. These proceedings were halted by a moratorium upon the commencement of CIRP. Following a liquidation order, the Appellant sought to continue the arbitration, but the Liquidator of Su Kam Power Systems Ltd. only made a single appearance and then ceased participation, resulting in the arbitration proceedings being struck. The Appellant contends that the Liquidator is obligated to defend the arbitration under Section 35(1) of the IBC, while the Liquidator argues that the arbitration concerns an inter-shareholder dispute unrelated to the Corporate Debtor. The agreement in question (Annexure A-3) was between the

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## Issues and analysis

### Issue 1: Whether the Liquidator is obligated to defend the arbitration proceedings initiated by the …

**Ratio:** The duty cast on the Liquidator is to institute or defend any Suit, prosecution or other

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**Reasoning:** The court reasoned that the Liquidator has the discretion to decide whether to defend any

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**Interpretation:** Section 35(1) of the IBC imposes a duty on the Liquidator to defend legal

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**Application:** The court applied the ratio to the facts by stating that since the Liquidator

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## Parties

- **Judges:** A.I.S. C…; A.B. S…; +1 more
- **Appellants:** Reliance India…
- **Respondents:** SU KAM POWER…; Raj Kumar…

## Timeline

- **2020-02-11 — Impugned Ord…**: Date of the order passed by the National Company Law Tribunal, Principal Bench, New Delhi…
- **2020-02-24 — Appeal He…**: The date on which the appeal was heard by the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 35(k) — Powers and duties of liquidator](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-35)

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