# In the matter of Kitply Industries Ltd. I.A. No.73-2018 in C.P. No.(IB)02-GB-2018

> NCLT judgment dated 2018-12-07. Citation: TCN-2018-NCLT-00148. Kitply Industries Ltd. faced Corporate Insolvency Resolution Process (CIRP) after IDBI Bank…

- **Court:** NCLT
- **Order date:** 7 Dec 2018
- **Citation:** TCN-2018-NCLT-00148
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kitply-industries-ltd-ia-no73-2018-in-cp-noib02-gb-2018-28dabe49

## Summary

### Background

Kitply Industries Ltd. faced Corporate Insolvency Resolution Process (CIRP) after IDBI Bank Limited, a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority admitted the application on 2018-05-01, declared a moratorium, and appointed Mr. Bijoy Murmuria as the Interim Resolution Professional (IRP). Subsequently, the Committee of Creditors (CoC) appointed Mr. Bijoy Murmuria as the Resolution Professional (RP). The RP invited Expression of Interest (Eol) for a resolution plan, receiving one plan from SREI Multiple Asset Investment Trust (Vision India Fund).

## Facts

IDBI Bank Limited, a financial creditor of Kitply Industries Limited, initiated CIRP by filing an application under Section 7 of the IBC, 2016. The application was admitted on 2018-05-01, and Mr. Bijoy Murmuria was appointed as the IRP and later as the RP. The RP invited Eols and received one resolution plan from SREI Multiple Asset Investment Trust (Vision India Fund). IDBI Bank objected to the resolution plan, alleging that the RP failed to identify related parties within the CoC and that the plan violated Section 29A of the IBC. IDBI Bank also contended that preferential treatment was given to SREI Infrastructure Finance Limited. The CoC approved the resolution plan with 92.74% voting share, while IDBI Bank opposed it. The liquidation value of the corporate debtor

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## Issues and analysis

### Issue 1: Whether the Resolution Professional failed to conduct due diligence in identifying related parties …

**Ratio:** The Resolution Professional has a duty to conduct due diligence to ascertain related

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**Reasoning:** The Adjudicating Authority found that the applicant (IDBI Bank) raised the issue of

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**Interpretation:** Proviso to Section 21(2) of the IBC mandates that a related party to whom a

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**Application:** The Adjudicating Authority concluded that the RP cannot be adjudged guilty of

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## Parties

- **Judges:** P. K. S…
- **Respondents:** Kitply Industries…

## Timeline

- **2018-05-01 — Admission of Ap…**: Adjudicating Authority admitted the application under Section 7 of the IBC, 2016,…
- **2018-06-08 — Appointment of…**: The Committee of Creditors (CoC) appointed Mr. Bijoy Murmuria as the Resolution…

## 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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