# In the matter of Jailaxmi Sugar Products (Nitali) Pvt. Ltd. I. A. No. 123 OF 2020 in C.P. (IB) No. 3568/(MB)-2019

> NCLT judgment dated 13 Jan 2021. Citation: TCN-2021-NCLT-03304. The Corporate Debtor, Jailaxmi Sugar Products (Nitali) Pvt. Ltd., was admitted into Corporate…

- **Court:** NCLT
- **Order date:** 13 Jan 2021
- **Citation:** TCN-2021-NCLT-03304
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jailaxmi-sugar-products-nitali-pvt-ltd-i-a-no-123-of-2020-in-cp-ib-no-3568mb-201-dc2ec773

## Summary

### Background

The Corporate Debtor, Jailaxmi Sugar Products (Nitali) Pvt. Ltd., was admitted into Corporate Insolvency Resolution Process (CIRP) by an order of the NCLT on November 6, 2019. Following the commencement of CIRP, the Resolution Professional (Applicant) informed various statutory authorities, including the Goods & Service Tax (GST) Department, about the ongoing moratorium. Despite this, on December 4, 2019, a sum of Rs. 76,75,000/- was debited from the Corporate Debtor's bank account and credited to the Respondent, the GST Department, Nashik. This debit occurred due to recovery proceedings initiated by the Collector of Usmanabad for tax arrears, which were, in fact, owed by a different entity, M/s Sheelatul Sugar Tech Private Limited, for whom the Corporate Debtor had previously undertaken to pay the GST dues.

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## Facts

The Corporate Debtor, Jailaxmi Sugar Products (Nitali) Pvt. Ltd., was admitted into the Corporate Insolvency Resolution Process (CIRP) by an order of the NCLT, Mumbai Bench, on November 6, 2019. The Resolution Professional, Dharit Kishorbhai Shah, was appointed to manage the affairs of the Corporate Debtor during the CIRP.

On November 16, 2019, the Applicant (Resolution Professional) informed various statutory authorities, including the Goods & Service Tax (GST) Department and EPFO, about the ongoing CIRP and the imposition of a moratorium. This notification was intended to ensure compliance with the provisions of the Insolvency and Bankruptcy Code, 2016.

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## Issues and analysis

### Issue 1: Whether the withdrawal of Rs. 76,75,000/- from the Corporate Debtor's bank account by the GST…

**Ratio:** Any recovery of dues from a corporate debtor's account by any creditor, including…

**Reasoning:** The court reasoned that the Corporate Debtor was under a moratorium as per **Section 14**…

**Interpretation:** The court interpreted **Section 14(1)(b)** of the IBC broadly to mean that any…

**Application:** Applying this interpretation, the court found that the debit of Rs. 76,75,000/-…

## Parties

- **Judges:** Harihar Prakash…; V. Nallasen…
- **Advocates:** For the Applicant:…; with…; +5 more

## Timeline

- **November 6, 2019 — CIRP Commen…**: The Corporate Debtor, Jailaxmi Sugar Products (Nitali) Pvt. Ltd., was put under Corporate…
- **November 16, 2019 — Authorities Informed of…**: The Applicant (Resolution Professional) informed various statutory authorities, including…

## 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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