# In the matter of Fab Pharmaceuticals Private Limited I.A. No. 139-2020 in C.P.(IB) No. 155-BB-2019

> NCLT judgment dated 2020-05-13. Citation: TCN-2020-NCLT-01363. M/s. Origin Formulations Private Limited filed C.P (IB) No. 155/BB/2019 under Section 9 of the…

- **Court:** NCLT
- **Order date:** 13 May 2020
- **Citation:** TCN-2020-NCLT-01363
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/fab-pharmaceuticals-private-limited-ia-no-139-2020-in-cpib-no-155-bb-2019-ab5168ca

## Summary

### Background

M/s. Origin Formulations Private Limited filed C.P (IB) No. 155/BB/2019 under Section 9 of the IBC, 2016, seeking to initiate CIRP against M/s. Fab Pharmaceuticals Private Limited (Corporate Debtor) due to a default of Rs. 21,93,392. The Adjudicating Authority admitted the case on September 19, 2019, initiating CIRP and appointing S. Shivaswamy as IRP. Public announcement was made, and creditors were called to submit claims. HDFC Bank (Financial Creditor) and Ravikumar Karigowda (on behalf of Commercial Tax Department) submitted claims. A Committee of Creditors (COC) was formed with HDFC as the sole financial creditor. The COC decided to confirm the IRP as RP and confirmed the freezing of the Corporate Debtor's account. The HDFC Bank later informed that the Corporate

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## Facts

M/s. Origin Formulations Private Limited initiated CIRP against M/s. Fab Pharmaceuticals Private Limited due to a default of Rs. 21,93,392. The Adjudicating Authority admitted the case on September 19, 2019, initiating CIRP and appointing S. Shivaswamy as IRP. HDFC Bank, the sole Financial Creditor, later categorized the Corporate Debtor's account as a standard asset and was not in favor of continuing CIRP. The Corporate Debtor expressed willingness to settle the dues of the Operational Creditor and CIRP expenses. The Operational Creditor had also initiated CIRP proceedings before the NCLT, Ahmedabad Bench, as a Corporate Debtor. The Operational Creditor did not participate in the video conference. The Corporate Debtor is solvent and has expressed willingness to settle

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## Issues and analysis

### Issue 1: Whether the CIRP proceedings initiated against the Corporate Debtor should be terminated given the …

**Ratio:** The legal principle applied is that CIRP should not be continued if it is against the

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**Reasoning:** The court reasoned that the Financial Creditor, HDFC Bank, being the sole creditor, did

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**Interpretation:** This issue involves the interpretation of the objectives of the IBC, which

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**Application:** The ratio and reasoning are applied to the specific facts of the case, where

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## Parties

- **Judges:** Rajeswara Rao…
- **Appellants:** M/s Origin…
- **Respondents:** M/s. Fab Pharmaceu…; M/s Fab Pharmaceut…
- **Advocates:** Amiraj R…; Praveen Kum…; +4 more

## Timeline

- **2019-09-19 — Admission o…**: The Adjudicating Authority admitted the case and initiated CIRP against M/s. Fab…
- **2019-10-02 — Public Annou…**: The Interim Resolution Professional made a public announcement in Financial Express,…

## 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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