# In the matter of Diamond Power Infrastructure Ltd. IA 139 of 2019 in CP(IB)No. 137/7/NCLT/AHM/2018

> NCLT judgment dated 2020-09-04. Citation: TCN-2020-NCLT-00712. This is an application filed under Section 60(5) of the Insolvency & Bankruptcy Code, 2016…

- **Court:** NCLT
- **Order date:** 4 Sept 2020
- **Citation:** TCN-2020-NCLT-00712
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/diamond-power-infrastructure-ltd-ia-139-of-2019-in-cpibno-1377ncltahm2018-ee0e5f92

## Summary

### Background

This is an application filed under Section 60(5) of the Insolvency & Bankruptcy Code, 2016 against the Resolution Professional Mr. Bhuvan Madan of the Corporate Debtor M/s. Diamond Power Infrastructure Ltd., which was admitted under Corporate Insolvency Resolution Process by the Adjudicating Authority vide its order dated 24th August, 2018. The applicant sought directions to the Resolution Professional to return goods (raw materials/semi-finished/finished) owned by the Applicant lying with the Corporate Debtor. The applicant claimed the raw material was delivered to the Corporate Debtor for processing, with an agreement that the Corporate Debtor would return the processed goods.

## Facts

KEC International Ltd. (Applicant) filed an application against Mr. Bhuvan Madan, the Resolution Professional (RP) of Diamond Power Infrastructure Ltd. (Corporate Debtor). The Corporate Debtor was admitted into Corporate Insolvency Resolution Process (CIRP) on August 24, 2018. The Applicant sought the return of raw materials/semi-finished/finished goods owned by them, which were lying with the Corporate Debtor for processing. The Applicant claimed that the goods were delivered to the Corporate Debtor under an agreement that the Corporate Debtor would return the processed goods. The RP refused to return the goods, citing the moratorium under Section 14 of the Insolvency & Bankruptcy Code, 2016, and the Applicant's failure to pay processing charges of Rs. 37.37 lacs.

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## Issues and analysis

### Issue 1: Whether the Resolution Professional is justified in withholding the goods (raw …

**Ratio:** The Resolution Professional cannot withhold goods owned by a third party but in the

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**Reasoning:** The court reasoned that Section 18(f) of the Insolvency & Bankruptcy Code, 2016,

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**Interpretation:** The court interpreted Section 18(f) in conjunction with its explanation to mean

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**Application:** In this case, the goods were held by the Corporate Debtor for processing under

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** KEC International…
- **Respondents:** Diamond Power…; Bhuvan Mad…
- **Advocates:** Rashesh San…; Nirag P…; +1 more

## Timeline

- **2018-08-24 — Admission in…**: Diamond Power Infrastructure Ltd. admitted under Corporate Insolvency Resolution Process…
- **2019-12-11 — 12th Committee of…**: The 12th Committee of Creditors meeting was held, wherein the dispute about the goods was…

## 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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