# In the matter of Sona Alloys Private Limited IA No. -314-(AHM)- 2021 In CP (IB)- 586-(AHM) -2019

> NCLT judgment dated 6 Feb 2023. Citation: TCN-2023-NCLT-04764. This case involves an application filed by the Resolution Professional (RP) under Sections…

- **Court:** NCLT
- **Order date:** 6 Feb 2023
- **Citation:** TCN-2023-NCLT-04764
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sona-alloys-private-limited-ia-no-314-ahm-2021-in-cp-ib-586-ahm-2019-da401034

## Summary

### Background

This case involves an application filed by the Resolution Professional (RP) under Sections 30(6) and 31 of the Insolvency & Bankruptcy Code, 2016 (IBC) for the approval of a resolution plan for the Corporate Debtor, M/s. Sona Alloys Private Ltd. The successful Resolution Applicant (SRA) is MTC Business Private Ltd. (MBPL). However, the approval of this plan is contested by M/s. Vedanta Ltd. (VL), an unsuccessful resolution applicant, which has raised significant objections. Vedanta Ltd. alleges that the resolution process was vitiated by a conflict of interest because MBPL, the SRA, was also a financial creditor and a member of the Committee of Creditors (CoC). This, according to Vedanta Ltd., led to a breach of confidentiality regarding their resolution plan and

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## Facts

The Corporate Debtor, M/s. Sona Alloys Private Ltd., was admitted into the Corporate Insolvency Resolution Process (CIRP) by an order dated June 16, 2020, following an application by M/s. Noble Resources International Pte. Ltd., an operational creditor, under Section 9 of the IB Code, 2016. Mr. Jagdischandra Babulal Mistri was initially appointed as the Interim Resolution Professional (IRP). Subsequently, a public announcement was made, claims were collated, and the Committee of Creditors (CoC) was constituted.

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## Issues and analysis

### Issue 1: Whether the resolution process was vitiated by a conflict of interest due to the successful…

**Ratio:** A financial creditor who is also a resolution applicant is legally permitted under the…

**Reasoning:** The NCLT reasoned that the **proviso to Section 30(5) of the IBC, 2016**, explicitly…

**Interpretation:** The court interpreted the **proviso to Section 30(5) of the IBC** as a clear…

**Application:** Applying this interpretation, the NCLT found that MBPL's presence and vote in…

## Parties

- **Judges:** DEEPTI M…; Ajai Das Me…
- **Advocates:** For…; Saurabh Soparkar,…; +10 more

## Timeline

- **June 16, 2020 — CIRP Init…**: The Corporate Debtor was admitted into…
- **July 27, 2020 — RP Appoin…**: CoC resolved to replace IRP with Mr.…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 30(6) — Submission of resolution plan](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-30)

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