# In the matter of Technico Industries Ltd. vs. Debashis Nanda & Ors.

> NCLAT judgment dated 2023-07-19. Citation: TCN-2023-NCLAT-00358. This is an appeal filed under Section 61 of the Insolvency and Bankruptcy Code, 2016, against…

- **Court:** NCLAT
- **Order date:** 19 Jul 2023
- **Citation:** TCN-2023-NCLAT-00358
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/technico-industries-ltd-vs-debashis-nanda-ors-49aad60a

## Summary

### Background

This is an appeal filed under Section 61 of the Insolvency and Bankruptcy Code, 2016, against an order dated 7th June, 2022, passed by the Adjudicating Authority (NCLT, New Delhi). The NCLT order pertained to Company Application C.A. No. 1682/2019 filed by the Liquidator of J.V. Strips Limited in C.P. (IB) No. 452/ND/2017. The appellant, Technico Industries Ltd., contested the NCLT's finding that certain transactions with the Corporate Debtor, J.V. Strips Limited, were undervalued and the direction to pay Rs. 31,00,475.00.

## Facts

Technico Industries Ltd. (Appellant) supplied raw materials to J.V. Strips Limited (Corporate Debtor) starting from September 2017. Payments were made in a running account. On 29.01.2018, the Appellant made an RTGS payment of Rs. 16,36,223.40 to the Corporate Debtor. As of 31.03.2018, Rs. 31,00,474.60 remained to be paid. The Appellant claimed that a meeting on 03.04.2018 resulted in discounts due to poor quality, processing costs, and rate differences, reducing the outstanding amount to Rs. 7,764.60. The Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor commenced on 13.04.2018, and a liquidation order was passed on 18.02.2019. The Liquidator argued that the discounts were given just before CIRP to unduly benefit the Appellant. The NCLT held

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## Issues and analysis

### Issue 1: Whether the discounts allowed to the Appellant by the Corporate Debtor were given in the ordinary …

**Ratio:** Transactions are considered to be in the ordinary course of business if they are

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**Reasoning:** The court reasoned that the Appellant failed to provide contemporaneous evidence of

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**Interpretation:** The 'ordinary course of business' is interpreted strictly, requiring evidence

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**Application:** The court applied the ratio to the facts by noting the lack of prior

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## Parties

- **Judges:** Rakesh…; Alok Sriv…
- **Appellants:** Technico Industrie…
- **Respondents:** J.V. Strips…; DEBASHIS…

## Timeline

- **2017-09-01 — Raw Material Supply…**: Technico Industries Ltd. starts supplying…
- **2018-01-29 — RTGS Pay…**: Technico Industries Ltd. makes an RTGS payment…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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