# In the matter of Parabolic Drugs Ltd. CA No. 171-2019 in CP (IB) No. 102-Chd-CHD-2019

> NCLT judgment dated 2019-07-26. Citation: TCN-2019-NCLT-02267. This case involves an intervention application filed by M/s Orbit Lifescience Pvt. Ltd.…

- **Court:** NCLT
- **Order date:** 26 Jul 2019
- **Citation:** TCN-2019-NCLT-02267
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/parabolic-drugs-ltd-ca-no-171-2019-in-cp-ib-no-102-chd-chd-2019-046baa36

## Summary

### Background

This case involves an intervention application filed by M/s Orbit Lifescience Pvt. Ltd. (Intervener) in a corporate insolvency resolution process (CIRP) initiated against Parabolic Drugs Ltd. (Corporate Debtor). The CIRP was commenced following the admission of a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) filed by Weather Makers Pvt. Ltd. The Intervener sought the release of raw materials/stock lying at the Corporate Debtor's plant, which were supplied under a Bailor-Bailee Agreement executed before the commencement of CIRP. The Resolution Professional (RP) and the Committee of Creditors (CoC) objected to the release, citing the moratorium under Section 14 of the IBC. The Intervener argued that the raw materials were owned by them and

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## Facts

M/s Weather Makers Pvt. Ltd. initiated CIRP against Parabolic Drugs Ltd. under Section 9 of the IBC. M/s Orbit Lifescience Pvt. Ltd. (Intervener) filed an intervention application seeking the release of raw materials/stock lying at the Corporate Debtor's plant. A Bailor and Bailee Agreement was executed on 2018-05-01 between Orbit Lifesciences Pvt. Ltd. (Intervener) and Parabolic Drugs Pvt. Ltd. (Corporate Debtor) before the commencement of CIRP. Under the agreement, the Intervener supplied raw materials to the Corporate Debtor for manufacturing. The Corporate Debtor held the stock received from the Intervener as a 'Bailee'. The CIRP commenced on 2018-08-23. The Intervener lodged a claim with the Resolution Professional for ₹16,06,33,009/-, out of which ₹11,01,32,696/-

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## Issues and analysis

### Issue 1: Whether the raw material in possession of the Corporate Debtor should be allowed to be returned on …

**Ratio:** The 'Explanation' to Section 18(1)(f) of the IBC carves out an exception to the general

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**Reasoning:** The court reasoned that Section 14(1)(d) prohibits the recovery of any property by an

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**Interpretation:** The court interpreted Section 14 and Section 18 of the IBC to mean that the

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**Application:** In this case, the raw material was supplied by the Intervener to the Corporate

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## Parties

- **Judges:** M.K. Sh…; Pradeep R.…
- **Appellants:** Weather Makers…
- **Respondents:** Parabolic Drugs…
- **Advocates:** Anand Chh…; Vaibhav…; +3 more

## Timeline

- **2018-05-01 — Bailor and Bailee…**: Execution of Bailor and Bailee Agreement between Orbit Lifesciences Pvt. Ltd.…
- **2018-08-23 — Commencement…**: CIRP commenced against Parabolic Drugs…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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