# In the matter of Quantum Ltd. IVN.P. No. 02-2017 & MA. 222-2017 in C.P. No. 1043-I&BP-NCLT-MAH-2017

> NCLT judgment dated 2017-09-26. Citation: TCN-2017-NCLT-00357. The case involves a miscellaneous application (IA 02/2017) filed by J. M. Financial Asset…

- **Court:** NCLT
- **Order date:** 26 Sept 2017
- **Citation:** TCN-2017-NCLT-00357
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/quantum-ltd-ivnp-no-02-2017-ma-222-2017-in-cp-no-1043-ibp-nclt-mah-2017-4a46d9f0

## Summary

### Background

The case involves a miscellaneous application (IA 02/2017) filed by J. M. Financial Asset Reconstruction Company, a secured creditor, seeking recall of the moratorium order declared in CP 1043/I&BP/NCLT/MB/MAH/2017 against Quantum Ltd, the corporate debtor. The applicant argues that the moratorium should not affect its rights to enforce security over the corporate debtor's assets, particularly concerning a property sold in SARFAESI proceedings to Omni Active Health Technologies Ltd. The corporate debtor had defaulted on loan repayments to Corporation Bank, which assigned the debt to JM. SARFAESI proceedings were initiated, and the corporate debtor challenged these proceedings before the Debt Recovery Tribunal (DRT). JM proceeded with an auction, confirming the

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## Facts

1. Quantum Ltd. (Corporate Debtor) defaulted on loan repayments to Corporation Bank.
2. Corporation Bank assigned the debt to J. M. Financial Asset Reconstruction Company (JM).
3. JM initiated SARFAESI proceedings against Quantum Ltd.
4. Quantum Ltd. challenged the SARFAESI proceedings before the Debt Recovery Tribunal (DRT), Pune.
5. JM proceeded with an auction of the Corporate Debtor's asset.
6. Omni Active Health Technologies Ltd. (Omni) was the highest bidder and deposited 25% of the sale price.
7. The DRT ordered Quantum Ltd. to pay JM ₹14,58,46,527 with interest.
8. Quantum Ltd. failed to comply with the DRT's order.
9. Indus Finance Ltd. (Indus) offered to deposit ₹5 crores on behalf of Quantum Ltd., but the DRT did not entertain the application.
10. Indus filed a

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## Issues and analysis

### Issue 1: Whether the sale allegedly confirmed is hit by …

**Ratio:** The ratio is based on the interpretation of Section 14 of the Insolvency & Bankruptcy

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**Reasoning:** The court reasoned that the word 'confirmation' employed in sub rule -2 of Rule 9 is

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**Interpretation:** The interpretation of Section 14 of the IBC is that it suspends all proceedings

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**Application:** The ratio and reasoning were applied to the specific facts of the case. Omni

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## Parties

- **Judges:** B.S.V. Prakash…; V. Nallasen…
- **Appellants:** J. M. Financial…
- **Respondents:** Quantum…
- **Advocates:** Vineet J…; Nena Ja…; +9 more

## Timeline

- **2013-03-30 — Corporation Bank…**: Corporation Bank assigned the debt of Quantum Ltd. to J. M. Financial Asset…
- **2014-05-05 — DRT orders Quantum Ltd.…**: The Debt Recovery Tribunal (DRT), Pune, ordered Quantum Ltd. to pay JM ₹14,58,46,527 with…

## 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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