# In the matter of Royal India Corporation Limited vs. Nandkishor Vishnupant Deshpande & Ors.

> NCLAT judgment dated 2024-05-06. Citation: TCN-2024-NCLAT-00458. The appeal challenges an order dated 07.01.2021 by the National Company Law Tribunal (NCLT),…

- **Court:** NCLAT
- **Order date:** 6 May 2024
- **Citation:** TCN-2024-NCLAT-00458
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/royal-india-corporation-limited-vs-nandkishor-vishnupant-deshpande-ors-b9df24ac

## Summary

### Background

The appeal challenges an order dated 07.01.2021 by the National Company Law Tribunal (NCLT), Mumbai, regarding IA No. 1266 of 2020 in CP (IB) No. 2556/MB/2019. The case originates from an application under Section 9 of the Insolvency & Bankruptcy Act, 2016, filed by Raksha Bullion, which led to the admission of Royal Refineries Private Limited (RRPL) into Corporate Insolvency Resolution Process (CIRP) on 13.11.2019. Nandkishore Deshpande was appointed as Interim Resolution Professional (IRP), later confirmed as RP. RRPL was involved in trading bullion, importing gold, processing it, and exporting it, along with local sales and purchases. In May 2019, the Department of Revenue Intelligence (DRI) searched RRPL and associated entities, finding that RRPL was a front

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## Facts

Raksha Bullion initiated Corporate Insolvency Resolution Process (CIRP) against Royal Refineries Private Limited (RRPL) under Section 9 of the Insolvency & Bankruptcy Act, 2016. RRPL was admitted into CIRP on 13.11.2019. Nandkishore Deshpande was appointed as Interim Resolution Professional (IRP) and later confirmed as Resolution Professional (RP). RRPL's business involved trading in bullion, importing gold, processing it, and exporting it, along with local sales and purchases. In May 2019, the Department of Revenue Intelligence (DRI) conducted searches on RRPL and associated entities. DRI's investigation revealed that RRPL was a front company managed by Manoj Kumar Babulal Punamiya, who arranged finances and recruited directors. These directors allegedly diverted

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## Issues and analysis

### Issue 1: Whether the proceedings under Section 66 of IBC, 2016 are maintainable against the appellant, Royal …

**Ratio:** Section 66 of the IBC empowers the Adjudicating Authority to pass an order for recovery

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**Reasoning:** The NCLAT reasoned that the Adjudicating Authority has the power to pass orders against

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**Interpretation:** Section 66 of the IBC is interpreted to provide a broad scope for the

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

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## Parties

- **Judges:** Rakesh Kuma…; Ajai Das Me…
- **Appellants:** Royal India…
- **Respondents:** Royal Refineries…; Nandkishor…
- **Advocates:** Sanchar…; Deeksha…; +6 more

## Timeline

- **2019-05-01 — DRI Sear…**: Department of Revenue Intelligence (DRI)…
- **2019-11-13 — CIRP Admi…**: Royal Refineries Private Limited (RRPL) was admitted into Corporate Insolvency Resolution…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 66 — Fraudulent trading or wrongful trading](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-66)

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