# In the matter of Shri IRK Raju Vs. Immaneni Eswara Rao & Ors. Company Appeal (AT) (insolvency ) No. 1058 of 2019

> NCLAT judgment dated 2020-01-30. Citation: TCN-2020-NCLAT-00487. The case involves an appeal against the order of the Adjudicating Authority (National Company…

- **Court:** NCLAT
- **Order date:** 30 Jan 2020
- **Citation:** TCN-2020-NCLAT-00487
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/shri-irk-raju-vs-immaneni-eswara-rao-ors-company-appeal-950c2626

## Summary

### Background

The case involves an appeal against the order of the Adjudicating Authority (National Company Law Tribunal), Amaravati Bench at Hyderabad, which admitted an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 filed by 'M/s. Ice TV Private Limited' (Operational Creditor) against 'M/s. Sreedevi Digital Systems Private Limited' (Corporate Debtor). The Appellant, Shri IRK Raju, challenged the order, arguing that the application was filed fraudulently with malicious intent, seeking to extract money rather than resolve insolvency or liquidation. The dispute centers around two Memoranda of Understanding (MoUs) both dated 22nd November, 2015, and the payment of customs duty related to the supply of set-top boxes. The Appellant contended that the debt

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## Facts

Shri IRK Raju, the appellant, challenged an order admitting an insolvency application against Sreedevi Digital Systems Private Limited, the corporate debtor. The application was filed by Ice TV Private Limited, the operational creditor, under Section 9 of the Insolvency and Bankruptcy Code (IBC). The appellant argued the application was filed with malicious intent to extract money, not for resolution. The dispute revolves around two Memoranda of Understanding (MoUs) dated November 22, 2015. The operational creditor claimed an operational debt of Rs. 2,36,18,518, including customs duty. The appellant offered Rs. 1,06,38,500 based on the original MoU, but the operational creditor declined, demanding more. The appellant contended that the second MoU was forged and that

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## Issues and analysis

### Issue 1: Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 was filed …

**Ratio:** An application under Section 9 should not be used for extracting more money, but for

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**Reasoning:** The court found that the 2nd Respondent moved an application under Section 9 fraudulently

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**Interpretation:** Section 65 of the IBC provides for penal action against those who initiate

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**Application:** The court concluded that the application was filed with malicious intent, as

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## Parties

- **Judges:** S.J. Mukhop…
- **Appellants:** IRK R…
- **Respondents:** M/s. Sreedevi…; Immaneni Eswara…

## Timeline

- **2015-11-22 — Memorandum of…**: Two Memoranda of Understanding (MoUs) were signed between Sreedevi Digital Systems Pvt…
- **2018-01-24 — Demand N…**: Demand Notice issued under Section 8(1) mentioning that whatever amount towards Custom…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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