# In the matter of National Plywood Industries Ltd. I.A. No. -2020 In CP (IB) No. 09-GB-2018

> NCLT judgment dated 2020-06-05. Citation: TCN-2020-NCLT-01239. The case involves an application filed by the Resolution Professional (RP) seeking modification…

- **Court:** NCLT
- **Order date:** 5 Jun 2020
- **Citation:** TCN-2020-NCLT-01239
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/national-plywood-industries-ltd-ia-no-2020-in-cp-ib-no-09-gb-2018-59d09697

## Summary

### Background

The case involves an application filed by the Resolution Professional (RP) seeking modification of an interim order issued by the Adjudicating Authority (AA) on 20.05.2020. The RP contends that the interim order inadvertently recognized banking transactions conducted by the erstwhile management on 18.04.2020, which the RP argues were illegitimate and devoid of authority due to the ongoing Corporate Insolvency Resolution Process (CIRP). The RP seeks to reverse these transactions and reinstate the funds.

## Facts

The Resolution Professional (RP) filed an application seeking modification of an interim order dated 20.05.2020 issued by the Adjudicating Authority (AA). The RP argued that the interim order inadvertently granted legal recognition to banking transactions performed by the erstwhile management on 18.04.2020. These transactions involved the transfer of Rs. 32.50 lakhs from the Corporate Debtor's (CD) bank account and Rs. 3.29 lakhs spent on purchasing raw materials. The RP contended that these transactions were illegitimate because they occurred during the ongoing CIRP and without the RP's authorization. The RP further alleged that the suspended board of directors transferred Rs. 35.79 lakhs on 18.04.2020 through unauthorized internet banking to JSVM Plywood Industries

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## Issues and analysis

### Issue 1: Whether there is any apparent error or mistake in the interim order dated 20.05.2020 that warrants …

**Ratio:** Rules 154 and 155 of the NCLT Rules allow the Tribunal to correct clerical or

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**Reasoning:** The court found that there were no clerical or arithmetical mistakes in the interim order

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**Interpretation:** Rules 154 and 155 provide a limited scope for the Tribunal to rectify errors in

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**Application:** The court applied the rules to the facts of the case and determined that the

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## Parties

- **Judges:** Jinan…
- **Appellants:** Sandeep K…
- **Respondents:** National Plywood…
- **Advocates:** Ashok Kumar…; Ashoke Kumar…

## Timeline

- **2020-04-18 — Banking Transactions by…**: The erstwhile management performed banking transactions, including the transfer of funds,…
- **2020-05-20 — Interim Order by…**: The Adjudicating Authority issued an…

## 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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