# In the matter of Kharkia Steels Private Limited C.P. (I.B) No. 1440-KB-2018

> NCLT judgment dated 2020-06-17. Citation: TCN-2020-NCLT-01155. M/s. Equal Commosale Private Limited was the successful bidder for two properties of the…

- **Court:** NCLT
- **Order date:** 17 Jun 2020
- **Citation:** TCN-2020-NCLT-01155
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kharkia-steels-private-limited-cp-ib-no-1440-kb-2018-f6f82082

## Summary

### Background

M/s. Equal Commosale Private Limited was the successful bidder for two properties of the Corporate Debtor (Kharkia Steels Private Limited) in an auction by the Recovery Officer, Kolkata Debt Recovery Tribunal-II. The Corporate Debtor is under CIRP as per the order in C.P. (I.B.) No. 1440 of 2018 dated 20th September 2019. Equal Commosale paid Rs. 8,27,02,000/- as sale consideration. However, due to the initiation of CIRP, the Recovery Officer set aside the sale and withdrew the sale certificate. Despite demands, the refund was not made. Equal Commosale filed an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking a direction to the Resolution Professional to refund the amount with interest.

## Facts

M/s. Equal Commosale Private Limited was the successful bidder in an auction for two properties belonging to M/s. Kharkia Steels Private Limited (the Corporate Debtor). The auction was conducted by the Recovery Officer, Kolkata Debt Recovery Tribunal-II. The Corporate Debtor was already under CIRP, initiated by Dena Bank under Section 7 of the IBC, as per an order dated 20th September 2019. Equal Commosale paid Rs. 8,27,02,000/- as the entire sale consideration. The Recovery Officer set aside the sale on 3rd September 2019 and withdrew the sale certificate due to the ongoing CIRP. Equal Commosale requested a refund with 18% interest. The Committee of Creditors (CoC) included Dena Bank. The money was with the certificate holder banks, members of the CoC. The Resolution

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## Issues and analysis

### Issue 1: Whether the application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 is …

**Ratio:** An application under Section 60(5) of the Code is not maintainable when the claim is

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**Reasoning:** The court reasoned that the claim was not against the Corporate Debtor or its properties

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**Interpretation:** Section 60(5) of the IBC provides the NCLT with jurisdiction to entertain or

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**Application:** In this case, the claim was for a refund of money paid by the auction purchaser

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## Parties

- **Judges:** Jinan…
- **Appellants:** Equal Commosale…
- **Respondents:** Kharkia Steels…; Uday Naraya…

## Timeline

- **2018-09-20 — CIRP Ord…**: Order in C.P. (I.B.) No. 1440 of 2018 dated 20th September 2019 by the NCLT Kolkata Bench…
- **2019-09-03 — Sale Set…**: Recovery Officer, Debt Recovery Tribunal-II, set aside the sale conducted on 3rd…

## 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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