# In the matter of State Bank of India Vs. D. S. Rajendra Kumar CA (AT) Nos. 87 to 91-2018

> NCLAT judgment dated 2018-04-18. Citation: TCN-2018-NCLAT-00322. These appeals were preferred by the State Bank of India against a common order dated January…

- **Court:** NCLAT
- **Order date:** 18 Apr 2018
- **Citation:** TCN-2018-NCLAT-00322
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/state-bank-of-india-vs-d-s-rajendra-kumar-ca-9f336600

## Summary

### Background

These appeals were preferred by the State Bank of India against a common order dated January 23, 2018, passed by the Adjudicating Authority (National Company Law Tribunal), Division Bench, Chennai. The Adjudicating Authority had declared a moratorium under Section 14 of the IBC 2016 in relation to the Corporate Debtor M/s. Brilliant Alloys Private Limited, following petitions filed by State Bank of India for recovery of financial credit. The appeals challenge the directions given by the Adjudicating Authority, arguing they contradict observations made by the Appellate Tribunal in a prior case.

## Facts

State Bank of India (SBI) filed appeals against a common order passed by the National Company Law Tribunal (NCLT), Chennai. The NCLT had initiated a Corporate Insolvency Resolution Process (CIRP) against M/s. Brilliant Alloys Private Limited, the Corporate Debtor, and declared a moratorium under Section 14 of the Insolvency and Bankruptcy Code (IBC) 2016. SBI sought recovery of financial credit extended to the Corporate Debtor. The NCLT's order also appointed an Interim Resolution Professional. The appeals arose because the NCLT's directions were perceived to contradict prior observations made by the National Company Law Appellate Tribunal (NCLAT). The key issue was whether the moratorium extended to proceedings against personal guarantors of the Corporate Debtor. The

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## Issues and analysis

### Issue 1: Whether the moratorium declared under Section 14 of the Insolvency and Bankruptcy Code (IBC) …

**Ratio:** The ratio is based on the interpretation of Section 14 of the IBC, which outlines the

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**Reasoning:** The NCLAT reasoned that the moratorium applies to proceedings against the corporate

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**Interpretation:** Section 14 is interpreted to provide a temporary shield to the corporate debtor

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**Application:** In this case, the NCLAT applied the ratio by clarifying that the moratorium

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** State Bank of…
- **Respondents:** BRILLIANT ALLOYS…; D.S. Rajendra…

## Timeline

- **2018-01-23 — NCLT Ord…**: The National Company Law Tribunal (NCLT), Division Bench, Chennai, passed a common order…
- **2018-02-28 — Previous NCLAT…**: The Appellate Tribunal issued a judgment in 'State Bank of India V/s. V. Ramakrishnan &…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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