# In the matter of Gaytech Engineering Pvt. Ltd. C.P. No. (IB) 137-10-NCLT-AHM-2017

> NCLT judgment dated 2017-12-22. Citation: TCN-2017-NCLT-00008. Gaytech Engineering Private Limited initiated Corporate Insolvency Resolution Process (CIRP) by…

- **Court:** NCLT
- **Order date:** 22 Dec 2017
- **Citation:** TCN-2017-NCLT-00008
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/gaytech-engineering-pvt-ltd-cp-no-ib-137-10-nclt-ahm-2017-c466869a

## Summary

### Background

Gaytech Engineering Private Limited initiated Corporate Insolvency Resolution Process (CIRP) by filing a petition under Section 10 of the Insolvency and Bankruptcy Code (IBC), 2016, due to its critical financial condition. The company's Board of Directors resolved to file the petition on September 15, 2017. The Corporate Applicant showed 'Indian Bank' as 'Financial Creditor'. The total debt raised is Rs. 882.78 lacs. The total amount of default is Rs. 10,36,85,017.17 ps. Indian Bank, the financial creditor, objected to the petition, stating that the corporate debtor was attempting to stall recovery proceedings by misusing the provisions of the IBC. Indian Bank had initiated recovery actions under the SARFAESI Act, including issuing notices and taking symbolic

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## Facts

Gaytech Engineering Private Limited's Board of Directors resolved on September 15, 2017, to file a petition under the Insolvency and Bankruptcy Code, 2016. A General Body Meeting also held on September 15, 2017, resolved to initiate Corporate Insolvency Resolution Process. Sunil Sunderlal Luhar, Director of Gaytech Engineering Private Limited, filed the petition under Section 10 of the IBC. The paid-up share capital of the Corporate Debtor is Rs. 24,88,000/-. The total debt raised is Rs. 882.78 lacs, with a total default amount of Rs. 10,36,85,017.17. Indian Bank is the Financial Creditor. Indian Bank issued notices to the Company, including a notice dated 4.9.2017 for intended sale under the Security Interest (Enforcement) rules, 2002. Indian Bank also filed an

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## Issues and analysis

### Issue 1: Whether the initiation of proceedings under the SARFAESI Act or the pendency of proceedings before …

**Ratio:** The pendency of proceedings under the SARFAESI Act or before the DRT is not a ground for

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**Reasoning:** The court reasoned that Section 238 of the IBC gives it overriding effect over other

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**Interpretation:** Section 238 of the IBC is interpreted to mean that the IBC takes precedence

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**Application:** The court applied this principle to the facts by stating that the fact that

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## Parties

- **Judges:** BIKKI RAVEENDRA…; Manorama…
- **Appellants:** Sunil Sunderlal…
- **Respondents:** Gaytech Engineerin…; Indian…

## Timeline

- **2017-09-15 — Board Reso…**: Gaytech Engineering Private Limited's Board of Directors resolved to file a petition…
- **2017-09-15 — General Body…**: Gaytech Engineering Private Limited's General Body Meeting resolved to initiate Corporate…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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