# In the matter of Shriramrathi Steels Private Limited CP (IB) No. 391-KB-2018

> NCLT judgment dated 2019-06-10. Citation: TCN-2019-NCLT-02988. Jai Balaji Industries Limited, an Operational Creditor, filed an application under Section 9 of…

- **Court:** NCLT
- **Order date:** 10 Jun 2019
- **Citation:** TCN-2019-NCLT-02988
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shriramrathi-steels-private-limited-cp-ib-no-391-kb-2018-e8d4e29f

## Summary

### Background

Jai Balaji Industries Limited, an Operational Creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Shriramrathi Steels Private Limited, the Corporate Debtor. The application was admitted on August 2, 2018, and an Interim Resolution Professional, Sri Rakesh Kumar Agarwal, was appointed. The Resolution Professional initiated the resolution process and invited expressions of interest. However, only one Resolution Plan was received from M/s. Rare Asset Reconstruction Limited (RARE ARC).

## Facts

Jai Balaji Industries Limited, acting as an Operational Creditor, initiated Corporate Insolvency Resolution Process (CIRP) against Shriramrathi Steels Private Limited under Section 9 of the Insolvency and Bankruptcy Code, 2016. The application was admitted on August 2, 2018. Rakesh Kumar Agarwal was appointed as the Interim Resolution Professional. Only one resolution plan was received from Rare Asset Reconstruction Limited (RARE ARC). The Committee of Creditors (CoC), consisting solely of Indian Overseas Bank, rejected the resolution plan due to a significant haircut (Rs. 21 crores offered against dues of Rs. 167 crores), extended payment tenure, and the use of unsecured SRs for payment. The CoC highlighted these concerns in a meeting on March 29, 2019. The Resolution

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority has the power to review the decision taken by the CoC regarding …

**Ratio:** The Supreme Court has observed that the word "may" in section 30(4) is

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**Reasoning:** The Adjudicating Authority relied on the Hon'ble Supreme Court's observation in K.

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**Interpretation:** This means that the Adjudicating Authority cannot interfere with the commercial

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**Application:** In this case, the Adjudicating Authority accepted the CoC's decision to reject

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## Parties

- **Judges:** Jinan…; Harish Chander…
- **Appellants:** Jai Balaji…
- **Respondents:** Shriramrathi…; Shriramrathi…

## Timeline

- **2016-01-01 — Enactment…**: The Insolvency and…
- **2018-08-02 — Application A…**: The application filed by Jai Balaji Industries…

## 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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