# In the matter of Electrosteel Steels Ltd. CA (IB) No. 173-KB-2018 IN CP (IB) No. 361-KB-2017

> NCLT judgment dated 2018-03-09. Citation: TCN-2018-NCLT-01732. The case involves an application filed by the Resolution Professional under Section 60(5)(a)(c)…

- **Court:** NCLT
- **Order date:** 9 Mar 2018
- **Citation:** TCN-2018-NCLT-01732
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/electrosteel-steels-ltd-ca-ib-no-173-kb-2018-in-cp-ib-no-361-kb-2017-0af9c80c

## Summary

### Background

The case involves an application filed by the Resolution Professional under Section 60(5)(a)(c) read with Section 25 of the Insolvency and Bankruptcy Code, 2016, seeking directions to Respondents 2 to 7 not to withhold permission for providing railway wagons for transporting coking coal and iron ore to the Corporate Debtor. The Corporate Debtor requires these materials to continue operating as a going concern during the Corporate Insolvency Resolution Process (CIRP). An earlier application by the Resolution Professional sought permission for the Corporate Debtor to procure, store, and transport coking coal and iron ore from their jurisdiction to the Bokaro Plant. The Director of Mines, Odisha, had replied that procurement of raw materials could be allowed upon receipt

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## Facts

The State Bank of India initiated Corporate Insolvency Resolution Process (CIRP) against Electrosteel Steels Limited, the Corporate Debtor. The Resolution Professional (RP) filed an application seeking permission for the Corporate Debtor to procure, store, and transport coking coal and iron ore, essential for its operations as a going concern. The RP requested directions to Respondents 2 to 7 not to withhold permission for providing railway wagons (rakes) for transporting these materials. The Director of Mines, Odisha, indicated that raw material procurement could be allowed upon receipt of a Certificate to Operate (CTO) from the JSPCB. The Corporate Debtor had applied for a CTO, but the JSPCB granted a CTO valid only until 31.12.2017. The CIRP period was set to expire

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## Issues and analysis

### Issue 1: Whether the first respondent can deny permission to the Corporate Debtor for procuring essential …

**Ratio:** The moratorium declared under Section 14 of the I&B Code aims to preserve the

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**Reasoning:** The adjudicating authority reasoned that the moratorium's purpose is to maintain the

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**Interpretation:** The moratorium under Section 14 is interpreted broadly to protect the Corporate

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**Application:** In this case, the first respondent's denial of permission based on the expired

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## Parties

- **Judges:** Jinan…
- **Appellants:** State Bank of…
- **Respondents:** Electrosteel…; The Director of…
- **Advocates:** Souvik Ma…; Arif…; +2 more

## Timeline

- **2016-01-01 — Enactment of Insolvency…**: The Insolvency and…
- **2016-09-29 — Application…**: Corporate Debtor filed an application before the JSPCB for the CTO for a period of five…

## 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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