# In the matter of State Bank of India Vs. Maithan alloys Limited and Ors.  CA(AT)(Ins) No. 1245-1247 of 2019

> NCLAT judgment dated 2020-02-26. Citation: TCN-2020-NCLAT-00372. The State Bank of India, as the financial creditor, filed an appeal against the impugned…

- **Court:** NCLAT
- **Order date:** 26 Feb 2020
- **Citation:** TCN-2020-NCLAT-00372
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/state-bank-of-india-vs-maithan-alloys-limited-and-ors-ca-9c4178cb

## Summary

### Background

The State Bank of India, as the financial creditor, filed an appeal against the impugned orders passed by the National Company Law Tribunal (NCLT), Kolkata Bench, concerning the liquidation of Impex Metal & Ferro Alloys Limited. The NCLT had directed the liquidator to accept a bid from Sova Electrocasting Limited, Typhoon Financial Services Limited, and Sonar Bangla Career Academy Private Limited, despite an earlier successful bid by Maithan Alloys Limited. The appellant contended that the NCLT's intervention in the public auction was erroneous and that Maithan Alloys Limited should be directed to complete the sale transaction.

## Facts

The State Bank of India (SBI), acting as the financial creditor, initiated Corporate Insolvency Resolution Process (CIRP) against Impex Metal & Ferro Alloys Limited. After the failure of CIRP, NCLT directed the liquidation of the Corporate Debtor. The liquidator initiated an e-auction for the sale of the Corporate Debtor as a going concern. Maithan Alloys Limited (R-1) emerged as the successful bidder in the e-auction, offering Rs. 68 Cr and depositing 25% of the total price. Subsequently, Respondents 2 to 4 (R-2 to R-4) formed a consortium and challenged the e-auction, offering a higher price of Rs. 70 Cr. The NCLT directed the liquidator to accept the bid of R-2 to R-4, allowing Maithan Alloys Limited to withdraw from the process and refunding their deposit. SBI,

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## Issues and analysis

### Issue 1: Whether the NCLT was justified in interfering with the public auction process and directing the …

**Ratio:** Interference in a public auction is generally not permissible unless there are grounds of

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**Reasoning:** The NCLAT found that the NCLT's intervention was unwarranted as there was no evidence of

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**Interpretation:** The IBC and related regulations prioritize the sanctity of the auction process

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**Application:** In this case, the NCLAT applied the principle that the NCLT's intervention was

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## Parties

- **Judges:** Jarat Kuma…; Balvinder…; +1 more
- **Appellants:** State Bank of…
- **Respondents:** Impex Metal &…; Maithan Alloys…

## Timeline

- **2017-12-31 — Outstanding…**: The Appellant had granted credit facility/loans to the Corporate Debtor and an amount of…
- **2018-03-09 — Admission of Section 7…**: Section 7 of the IBC was admitted by NCLT and Corporate Insolvency Resolution Process was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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