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

> NCLAT judgment dated 2023-07-19. Citation: TCN-2023-NCLAT-00360. Technico Industries Ltd. filed an appeal under Section 61 of the Insolvency and Bankruptcy…

- **Court:** NCLAT
- **Order date:** 19 Jul 2023
- **Citation:** TCN-2023-NCLAT-00360
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/technico-industries-ltd-vs-debashis-nanda-ors-59c95118

## Summary

### Background

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

## Facts

Technico Industries Ltd. (Appellant) supplied raw materials to J.V. Strips Limited (Corporate Debtor) starting September 2017. A running account was maintained for payments. On January 29, 2018, the Appellant made an RTGS payment of Rs. 16,36,223.40 to the Corporate Debtor, leaving a balance of Rs. 31,00,474.60 as of March 31, 2018. The Appellant claimed that issues with the quality of raw materials, processing costs, and rate differences led to discussions and discounts. A meeting on April 3, 2018, allegedly resulted in an agreement to credit Rs. 30,92,710.00 to the Appellant's account, leaving only Rs. 7,764.60 to be paid. The Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor commenced on April 13, 2018. The Liquidator argued that the

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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 that occur outside the ordinary course of business and provide undue benefit

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**Reasoning:** The court noted that the discounts were agreed upon shortly before the CIRP initiation

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**Interpretation:** The 'ordinary course of business' refers to transactions that are typical and

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**Application:** The court applied this principle to the facts by noting that the discounts were

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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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