# In the matter of Vandana Industries Ltd Vs IL & FS Financial Services Ltd & Anr CA (AT) No.630-2018

> NCLAT judgment dated 2019-02-01. Citation: TCN-2019-NCLAT-00812. The case involves an appeal against an order passed by the Adjudicating Authority (National…

- **Court:** NCLAT
- **Order date:** 1 Feb 2019
- **Citation:** TCN-2019-NCLAT-00812
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/vandana-industries-ltd-vs-il-fs-financial-services-ltd-anr-ca-96e93832

## Summary

### Background

The case involves an appeal against an order passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, which initiated liquidation proceedings against Vandana Udyog Limited ('Corporate Debtor') under Section 33(2) of the Insolvency and Bankruptcy Code, 2016. The appeal was filed by Vandana Industries Limited, a shareholder of the Corporate Debtor. The initial application under Section 10 of the I&B Code was filed by Vandana Udyog Limited through its Board of Directors, listing IL & FS Financial Services Limited as a financial creditor. The appellant contended that the Board of Directors did not have the authority to file the application without prior approval from the shareholders in an Extraordinary General Meeting. The appellant also

…

## Facts

Vandana Industries Ltd., a shareholder, appealed against a liquidation order for Vandana Udyog Limited ('Corporate Debtor'). The liquidation was initiated based on an application under Section 10 of the Insolvency and Bankruptcy Code (I&B Code) filed by the Corporate Debtor's Board of Directors, listing IL & FS Financial Services Limited as a financial creditor. The application was admitted on June 21, 2017, and a liquidation order was passed on June 25, 2018. Vandana Industries Ltd. claimed they were unaware of the application until after the liquidation order. They argued the Board lacked jurisdiction to file the application without shareholder approval, citing Article 129 of the Articles of Association and a prior judgment (Gaja Trustee Company Private

…

## Issues and analysis

### Issue 1: Whether the Board of Directors of a company can file an application under Section 10 of the …

**Ratio:** The ratio is based on the principle that the Board of Directors cannot initiate

…

**Reasoning:** The court reasoned that the Board of Directors' action was not maintainable because it

…

**Interpretation:** The interpretation of Section 10 of the I&B Code, in conjunction with the

…

**Application:** In this specific case, the Board of Directors filed an application under

…

## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Vandana Industries…
- **Respondents:** Vandana Udyog…; IL & FS Financial…

## Timeline

- **2016-06-25 — Order Da…**: Order dated 25.06.2016, whereby and whereunder, the Adjudicating Authority (National…
- **2017-06-21 — Application A…**: The application u/s 10 was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 33(2) — Initiation of liquidation](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-33)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclat-new-delhi/vandana-industries-ltd-vs-il-fs-financial-services-ltd-anr-ca-96e93832