# In the matter of Alok Industries Ltd. IA 399-2018 In CP(IB) No. 48-60(5)-NCLT-AHM-2017

> NCLT judgment dated 2019-01-04. Citation: TCN-2019-NCLT-05326. The case involves an application filed by IDBI Bank Ltd. under Section 60(5) of the Insolvency…

- **Court:** NCLT
- **Order date:** 4 Jan 2019
- **Citation:** TCN-2019-NCLT-05326
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/alok-industries-ltd-ia-399-2018-in-cpib-no-48-605-nclt-ahm-2017-addccb49

## Summary

### Background

The case involves an application filed by IDBI Bank Ltd. under Section 60(5) of the Insolvency and Bankruptcy Code (IBC) against the resolution plan of Alok Industries Ltd. The application raises objections to certain provisions of the resolution plan, specifically concerning the treatment of subsidiaries and associated companies of the corporate debtor. IDBI, a financial creditor of Alok Industries, claims that clause 3.7 of the resolution plan, dealing with subsidiaries, is contradictory and curtails IDBI's rights over securities created by a third-party security provider, Alok Infrastructure Industries Ltd.

## Facts

IDBI Bank Ltd., a financial creditor of Alok Industries Ltd. (the Corporate Debtor), filed an application under Section 60(5) of the Insolvency and Bankruptcy Code (IBC) objecting to the resolution plan approved by the Committee of Creditors (COC). IDBI held 4.284% of voting rights in the COC. The resolution plan, dated 12.04.2018, was submitted by JM Financial Asset Reconstruction Limited, JMFARC-March 2018-Trust, and Reliance Industries Limited. IDBI's objection centered on clause 3.7 of the resolution plan, which deals with the subsidiaries and associated companies of the Corporate Debtor, specifically Alok Infrastructure Industries Ltd. IDBI argued that this clause, in conjunction with other clauses, would curtail its rights over the securities created by the

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## Issues and analysis

### Issue 1: Whether clause 3.7 of the Resolution Plan is contradictory to section 1.2(vi)(b) of the Resolution …

**Ratio:** The principle of harmonious construction requires that different clauses of a document

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**Reasoning:** The Adjudicating Authority found no ambiguity or contradiction in the resolution plan. It

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**Interpretation:** Clause 3.7 allows the resolution applicants to deal with the shares/securities

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**Application:** In this case, the court found that the clauses were not contradictory and that

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## Parties

- **Judges:** Manorama…
- **Appellants:** IDBI Bank…
- **Respondents:** Alok Industries…; Ajay J…

## Timeline

- **2017-07-18 — Admission of Ap…**: Application under Section 7 of the IBC by…
- **2017-08-16 — First COC M…**: Respondent No. 1 appointed as…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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