# In the matter of Leel Electricals Limited IA No. 128 of 2020 in CP(IB) No. 189-ALD-2019

> NCLT judgment dated 2020-10-16. Citation: TCN-2020-NCLT-00376. The case involves an application filed by the Interim Resolution Professional (IRP) of MKM…

- **Court:** NCLT
- **Order date:** 16 Oct 2020
- **Citation:** TCN-2020-NCLT-00376
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/leel-electricals-limited-ia-no-128-of-2020-in-cpib-no-189-ald-2019-6980c766

## Summary

### Background

The case involves an application filed by the Interim Resolution Professional (IRP) of MKM Technologies Pvt. Ltd., which is undergoing Corporate Insolvency Resolution Process (CIRP). The IRP sought a direction from the Adjudicating Authority to the Commissioner of Customs to hand over goods/assets owned by the Corporate Debtor, which were lying with the Customs Department as of the CIRP commencement date. The Corporate Debtor had imported certain goods, and these were lying with the Commissioner of Customs, Noida. The value of these goods, as per the information provided by the Corporate Debtor, was Rs. 36,44,46,464.88 as on 04.03.2020. Despite communications and a legal notice, the IRP received no response from the Customs Department. The Customs Department contended

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## Facts

MKM Technologies Pvt. Ltd. is undergoing Corporate Insolvency Resolution Process (CIRP). Arvind Mittal is the Interim Resolution Professional (IRP). Leel Electricals Limited is the Corporate Debtor. The IRP filed an application seeking the handover of goods owned by the Corporate Debtor, which were lying with the Commissioner of Customs, Noida. The value of the goods was Rs. 36,44,46,464.88 as of 04.03.2020. The IRP sent communications and a legal notice to the Customs Department but received no response. The Customs Department claimed the right to recover dues under Section 72 of the Customs Act, 1962, and stated that disposal proceedings had begun before March 2020. The IRP argued that the moratorium under Section 14 of the IBC prevented the Customs Department from

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## Issues and analysis

### Issue 1: Whether the moratorium imposed under Section 14 of the Insolvency and Bankruptcy Code (IBC), 2016, …

**Ratio:** Section 14 of the IBC imposes a moratorium on the institution or continuation of suits or

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**Reasoning:** The Adjudicating Authority reasoned that the moratorium imposed under Section 14 of the

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**Interpretation:** Section 14 of the IBC is interpreted to provide a standstill period during

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**Application:** In this case, the moratorium was imposed against the Corporate Debtor. The

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## Parties

- **Judges:** Rajesh Daya…
- **Appellants:** Arvind M…
- **Respondents:** LEEL Electricals…

## Timeline

- **2020-03-04 — CIRP Init…**: Adjudicating Authority initiated CIRP based on a petition filed by the Operational…
- **2020-03-07 — Public Annou…**: The applicant made a public announcement…

## 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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