# In the matter of Ramswarup Industries Ltd. CP (IB) No. 349-KB-2017

> NCLT judgment dated 2018-01-08. Citation: TCN-2018-NCLT-01957. The case involves an application filed by Ramswarup Industries Ltd., the corporate applicant,…

- **Court:** NCLT
- **Order date:** 8 Jan 2018
- **Citation:** TCN-2018-NCLT-01957
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ramswarup-industries-ltd-cp-ib-no-349-kb-2017-f5f3a101

## Summary

### Background

The case involves an application filed by Ramswarup Industries Ltd., the corporate applicant, under Section 10 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP). The application was based on a default in payment to financial creditors. ICICI Bank Ltd., a financial creditor, filed an objection, alleging that the application was filed fraudulently and with malicious intent to exploit the moratorium provisions and thwart recovery actions. The corporate applicant had previously undergone Corporate Debt Restructuring (CDR), which was ultimately rejected. The application was filed after a reference before the Board for Industrial and Financial Reconstruction (BIFR) was abated due to the Sick Industrial Companies

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## Facts

Ramswarup Industries Ltd. filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP). The application was based on a default in payment to financial creditors, with a total default amount of Rs. 3,379.77 crore and an outstanding amount of Rs. 2,047.70 crore. ICICI Bank Ltd., a financial creditor, objected to the application, alleging fraudulent intent and abuse of the moratorium provisions. ICICI Bank claimed that the corporate applicant had initiated the proceedings to thwart recovery actions and that the default was a result of fraud and siphoning off funds. The corporate applicant had previously undergone Corporate Debt Restructuring (CDR), which was rejected in December 2011.

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## Issues and analysis

### Issue 1: Whether the application filed by the corporate applicant under Section 10 of the Insolvency and …

**Ratio:** Section 10 of the Insolvency and Bankruptcy Code, 2016, allows a corporate applicant to

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**Reasoning:** The NCLT considered the provisions of Section 10 of the IBC and the objections raised by

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**Interpretation:** Section 10 provides a mechanism for a corporate debtor to initiate CIRP when it

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**Application:** The NCLT applied Section 10 to the facts of the case, finding that Ramswarup

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## Parties

- **Judges:** V. P. S…; Jinan…
- **Respondents:** Ramswarup…; ICICI Ban…

## Timeline

- **2010-11-01 — Corporate Debt…**: Corporate applicant referred to…
- **2010-12-01 — CDR Admi…**: Corporate Debt…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 11 — Persons not entitled to make application](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-11)

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