# In the matter of Software One India Private Limited vs. Magnamious Systems Pvt. Ltd. COMPANY APPEAL (AT) (INSOLVENCY) No. 828 of 2019

> NCLAT judgment dated 2022-04-18. Citation: TCN-2022-NCLAT-00538. The case involves an appeal against an order passed by the National Company Law Tribunal…

- **Court:** NCLAT
- **Order date:** 18 Apr 2022
- **Citation:** TCN-2022-NCLAT-00538
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/software-one-india-private-limited-vs-magnamious-systems-pvt-ltd-company-appeal-77644611

## Summary

### Background

The case involves an appeal against an order passed by the National Company Law Tribunal (NCLT), Mumbai Bench, which dismissed an application under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. The NCLT dismissed the application on the grounds that the appellant was not authorized to initiate the Corporate Insolvency Resolution Process (CIRP) on the date the notice was issued. The appellant, Software One India Private Limited, an operational creditor, filed an appeal under Section 61 of the IBC.

## Facts

Software One India Private Limited, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Magnamious Systems Pvt. Ltd. The Adjudicating Authority (NCLT, Mumbai Bench) dismissed the application because the person who issued the notice under Section 8 of the IBC, Ms. Meetu Bajaj, was not authorized to do so at the time of issuance. The Appellant argued that a subsequent Board Resolution dated 29.01.2019 ratified the actions taken by Ms. Meetu Bajaj, thereby validating the notice. The Adjudicating Authority relied on a Supreme Court judgment stating that an act by an incompetent authority is invalid and cannot be rectified by ratification. The

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was correct in dismissing the application under Section 9 of the …

**Ratio:** The principle of ratification allows for the validation of an act already done, provided

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**Reasoning:** The NCLAT reasoned that the Adjudicating Authority placed undue emphasis on the initial

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**Interpretation:** The interpretation of Section 9 of the IBC, specifically sub-section (5), is

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**Application:** In this case, the NCLAT applied the principle of ratification by considering

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## Parties

- **Judges:** Anant Bijay…; Ms Shreesha…
- **Appellants:** Software One…
- **Respondents:** Magnamious…

## Timeline

- **2017-10-05 — Board Me…**: Minutes of Meeting of the Board of Directors of the Appellant Company held, wherein Ms…
- **2019-01-29 — Board Me…**: Board of Directors expressly authorised Ms Meetu Bajaj to institute proceedings under IB…

## 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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