# In the matter of R. B. Rice Mills Pvt. Ltd. CA No. 251-2018 in Company Petition (IB)No. 154-ALD-2018

> NCLT judgment dated 2019-07-23. Citation: TCN-2019-NCLT-02344. The case involves an application filed under Section 60(5) of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 23 Jul 2019
- **Citation:** TCN-2019-NCLT-02344
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/r-b-rice-mills-pvt-ltd-ca-no-251-2018-in-company-petition-ibno-154-ald-2018-7474970f

## Summary

### Background

The case involves an application filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, read with Section 65, in compliance with a High Court order. The applicant, an auction purchaser of the corporate debtor's assets, sought exclusion of the plant and machinery from CIRP proceedings, claiming rights based on an e-auction. The Bank of Baroda, a secured creditor, had conducted the e-auction. However, CIRP was initiated against the corporate debtor by an operational creditor, Aryan Traders. The applicant claimed the bank never demanded the balance amount after the adjudicating authority's order and had obtained a loan to pay it. The applicant argued that the auction was accepted and confirmed before the CIRP proceedings.

## Facts

M/s Khan Enterprises filed an application under Section 60(5) and 65 of the Insolvency and Bankruptcy Code, 2016, pursuant to a High Court order. M/s Khan Enterprises was the auction purchaser of the Corporate Debtor M/s R.B Rice Mills Pvt. Ltd.'s assets through an e-auction held on 2018-05-01, with a highest bid of Rs. 2,16,00,000. They deposited Rs. 54 Lacs on 2018-04-27 and Rs. 26 Lacs on 2018-05-18. The e-auction was for realization of debts due to Bank of Baroda, the sole secured creditor. Bank of Baroda informed the applicant on 2018-07-10 about the admission of CIRP against the Corporate Debtor, initiated by Aryan Traders, an operational creditor. The applicant claimed the balance amount was never demanded after the adjudicating authority's order on 2018-05-10,

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## Issues and analysis

### Issue 1: Whether the plant and machinery of the corporate debtor should be excluded from the CIRP …

**Ratio:** The principle is that once CIRP is initiated and a moratorium is in place under Section

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**Reasoning:** The tribunal reasoned that the moratorium period under Section 14 of the IBC had started

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**Interpretation:** This issue involves the interpretation of Section 14 of the IBC regarding the

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**Application:** The ratio and reasoning apply to the specific facts because the e-auction was

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## Parties

- **Judges:** Sh. H.P Cha…; Ms Saroj R…
- **Appellants:** M/s Khan Enterpris…
- **Respondents:** M/s R.B Rice…; M/s Aryan T…

## Timeline

- **2018-05-01 — E-auction…**: E-auction of the Corporate…
- **2018-04-27 — Deposit of…**: Applicant deposited Rs.…

## 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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