# In the matter of Divyajyoti Sponge Iron Pvt Ltd C.P (IB) No. 363-KB-17

> NCLT judgment dated 2017-12-22. Citation: TCN-2017-NCLT-00016. Punjab National Bank initiated Corporate Insolvency Resolution Process (CIRP) against…

- **Court:** NCLT
- **Order date:** 22 Dec 2017
- **Citation:** TCN-2017-NCLT-00016
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/divyajyoti-sponge-iron-pvt-ltd-cp-ib-no-363-kb-17-7fe754ef

## Summary

### Background

Punjab National Bank initiated Corporate Insolvency Resolution Process (CIRP) against Divyajyoti Sponge Iron Pvt Ltd under Section 7 of the IBC. The Resolution Professional (RP) filed CA (IB) No. 570/KB/2017 seeking orders for the Superintendent of Police to provide necessary assistance for valuation of the corporate debtor's assets. The promoter-director opposed the valuation, citing a pending challenge to the 3rd valuation before the NCLT. The court addressed the promoter-director's obstruction of the valuation process.

## Facts

Punjab National Bank initiated CIRP against Divyajyoti Sponge Iron Pvt Ltd. The Resolution Professional (RP) filed an application (CA (IB) No. 570/KB/2017) seeking necessary orders for the Superintendent of Police to provide assistance for the valuation of the corporate debtor's assets. The promoter-director opposed the valuation, stating that a challenge to the 3rd valuation was pending before the NCLT. The promoter-director expressed unwillingness to allow anyone inside the factory connected with valuation without prior intimation of the names of COC personnel. The RP argued that the promoter-director's actions were obstructing the CIRP. The court noted that after the appointment of the IRP, the management of the corporate debtor vests in the IRP, and the

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## Issues and analysis

### Issue 1: Whether the promoter-director can obstruct the valuation process during the Corporate Insolvency …

**Ratio:** After the appointment of the IRP, the management of the corporate debtor vests in the

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**Reasoning:** The court reasoned that allowing the promoter-director to obstruct the valuation process

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**Interpretation:** The interpretation of the IBC is that once CIRP is initiated and an IRP is

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**Application:** In this case, the promoter-director's attempt to prevent the valuation team

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## Parties

- **Judges:** Vijai Prata…; Jinan…
- **Appellants:** Punjab National…
- **Respondents:** Divyajyoti Sponge…

## Timeline

- **2017-12-22 — Hearing…**: Hearing on CA (IB) No. 570/KB/2017 in C.P. (IB) No. 363/KB/17 regarding assistance for…
- **2018-01-18 — Next Hearin…**: Matter listed for…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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