# In the matter of Shah Group Builders Limited C.P.(IB)-556-(MB)-2018

> NCLT judgment dated 2019-02-14. Citation: TCN-2019-NCLT-04849. The case originates from a petition filed by Mr. Satish Sadashiv Rane, a Financial Creditor,…

- **Court:** NCLT
- **Order date:** 14 Feb 2019
- **Citation:** TCN-2019-NCLT-04849
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shah-group-builders-limited-cpib-556-mb-2018-98dac32a

## Summary

### Background

The case originates from a petition filed by Mr. Satish Sadashiv Rane, a Financial Creditor, under Section 7 of the Insolvency & Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Shah Group Builders Limited, the Corporate Debtor. The Financial Creditor claimed a financial debt of ₹6,09,11,309/-, which includes principal, interest, and unpaid amounts accrued on a home loan account. The Corporate Debtor allegedly defaulted on repayments, leading the Financial Creditor to file the petition. The Corporate Debtor raised objections, including the validity of the Power of Attorney used by the Financial Creditor and the claim being barred by limitation.

## Facts

Mr. Satish Sadashiv Rane, the Financial Creditor, filed a petition against M/s. Shah Group Builders Limited, the Corporate Debtor, under Section 7 of the Insolvency & Bankruptcy Code, 2016. The Financial Creditor claimed a financial debt of ₹6,09,11,309/-, comprising principal, interest, and unpaid amounts accrued on a home loan account. The Corporate Debtor allegedly approached the Financial Creditor through its Directors and represented that it was a company incorporated under the Companies Act, 1956. The Corporate Debtor induced the Financial Creditor to initiate deposits with the Corporate Debtor on the basis of an assured return scheme. The Corporate Debtor allegedly accepted deposits from the Financial Creditor from 2012 to April 2014, totaling

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor is maintainable given that it was signed by …

**Ratio:** The practice of using a general Power of Attorney is acceptable, especially when there is

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**Reasoning:** The court reasoned that the Power of Attorney granted substantive authorization to the

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**Interpretation:** The court interpreted that the Insolvency & Bankruptcy Code does not

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**Application:** The court applied the ratio by holding that the application was not defective

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## Parties

- **Judges:** M.K. Sh…
- **Appellants:** Satish Sadashiv…
- **Respondents:** M/s. Shah Group…

## Timeline

- **2018-04-02 — Petition…**: A Petition is filed in Form No.1…
- **2019-01-10 — Hearing…**: The case was heard on…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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