# In the matter of Duncans Industries Limited IA No. 1477-KB-2020 In CP (IB) No. 184-KB-2018

> NCLT judgment dated 2021-05-19. Citation: TCN-2021-NCLT-02115. The case involves an application filed by Ram Ratan Modi, the Resolution Professional of…

- **Court:** NCLT
- **Order date:** 19 May 2021
- **Citation:** TCN-2021-NCLT-02115
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/duncans-industries-limited-ia-no-1477-kb-2020-in-cp-ib-no-184-kb-2018-d5a3b807

## Summary

### Background

The case involves an application filed by Ram Ratan Modi, the Resolution Professional of Duncans Industries Limited (the Corporate Debtor), seeking the release of a lien/attachment on the corporate debtor's current account. The Corporate Insolvency Resolution Process (CIRP) was initiated against Duncans Industries Limited based on an application filed by Sangita Fiscal Private Limited and others under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority admitted the corporate debtor into CIRP on 05.03.2020. The Resolution Professional made a public announcement regarding the CIRP initiation. The Respondent, ICICI Bank, had marked a freeze on the corporate debtor's accounts due to notices received from the Deputy Commissioner of Income Tax

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## Facts

Sangita Fiscal Services Private Limited and others initiated CIRP against Duncans Industries Limited under Section 7 of IBC. The NCLT admitted Duncans Industries Limited into CIRP on 05.03.2020. Ram Ratan Modi was appointed as the Resolution Professional. ICICI Bank, the respondent, had frozen the corporate debtor's account (635405000368) due to notices from the Deputy Commissioner of Income Tax (TDS) dated 17.07.2019 and EPFO dated 31.07.2019 and 27.08.2019, for outstanding dues. The Income Tax notice was issued under section 226(3) of the Income Tax Act, 1961, demanding Rs. 1,21,39,847. The EPFO notices related to defaults in provident fund payments for Rungli Rungliot Tea Estate, a unit of Duncans Industries Limited, amounting to Rs. 36,66,947. The Resolution

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## Issues and analysis

### Issue 1: Whether the attachment of the corporate debtor's bank account by statutory authorities (Income Tax …

**Ratio:** The legal principle is that the Insolvency and Bankruptcy Code, 2016 (IBC) has an

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**Reasoning:** The court reasoned that the purpose of the IBC is to conduct the CIRP in a time-bound

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**Interpretation:** This interprets Section 238 of the IBC to mean that once CIRP is initiated and

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**Application:** In this case, the court applied the principle to direct the release of the

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## Parties

- **Judges:** Rajasekha…; Harish Chander…
- **Appellants:** Ram Ratan…
- **Respondents:** Duncans Industries…; ICICI…

## Timeline

- **2020-03-05 — Admission in…**: Duncans Industries Limited was admitted into Corporate Insolvency Resolution Process…
- **2020-03-11 — Public Annou…**: Mr. Ram Ratan Modi, the Interim Resolution Professional, made a public announcement in…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 17(1) — Management of affairs of corporate debtor by…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-17)

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