# In the matter of SPS Steels Rolling Mills Limited CA(IB) No. 871-KB-2018 in CP(IB) No. 595-KB-2017

> NCLT judgment dated 2019-04-08. Citation: TCN-2019-NCLT-04096. The case involves the Corporate Insolvency Resolution Process (CIRP) of SPS Steels Rolling…

- **Court:** NCLT
- **Order date:** 8 Apr 2019
- **Citation:** TCN-2019-NCLT-04096
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sps-steels-rolling-mills-limited-caib-no-871-kb-2018-in-cpib-no-595-kb-2017-0819646d

## Summary

### Background

The case involves the Corporate Insolvency Resolution Process (CIRP) of SPS Steels Rolling Mills Limited. Allahabad Bank initiated the process under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Resolution Professional (RP) sought approval of the resolution plan, which was initially approved by the Committee of Creditors (CoC) with 100% vote share. Two resolution applicants, Shakambhari Ispat & Power Limited (SIPL) and Takshvi TMT Mills Private Limited (TTMPL), participated in the bidding process. The CoC adopted a process for outbidding, declaring SIPL as the H-1 bidder and TTMPL as the H-2 bidder. The suspended board of directors of the Corporate Debtor filed a writ petition before the Supreme Court, leading to directions for providing copies of the

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## Facts

Allahabad Bank initiated CIRP against SPS Steels Rolling Mills Limited under Section 7 of IBC. Vijaykumar V. Iyer was appointed as the Resolution Professional. Two resolution applicants, SIPL and TTMPL, submitted resolution plans. The CoC adopted a process for outbidding, declaring SIPL as H-1 and TTMPL as H-2. TTMPL challenged the outbidding process and SIPL's eligibility under Section 29A, alleging that SIPL was a related party due to a manufacturing agreement with Dytron Marketing Services Pvt. Ltd., whose director was related to the Corporate Debtor's director. The suspended board of directors filed a writ petition in the Supreme Court, leading to directions for providing copies of the resolution plans and reconsidering them. The CoC re-approved SIPL's plan with

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## Issues and analysis

### Issue 1: Whether the CoC had modified the process notes by changing the methodology for evaluation of …

**Ratio:** The principle of estoppel applies when a party consents to a process and later attempts

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**Reasoning:** The NCLT found that TTMPL had actively participated in the outbidding process and

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**Interpretation:** The court interpreted that the CoC's decision to modify the process notes was

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**Application:** TTMPL, having consented to the outbidding process, was estopped from

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## Parties

- **Judges:** Jinan…
- **Appellants:** Allahabad…
- **Respondents:** SPS Steels…
- **Advocates:** Jishnu…; Suhani Dw…; +10 more

## Timeline

- **2017-12-22 — Application A…**: Application admitted, appointing Mr. Vijaykumar V. Iyer as Interim Resolution…
- **2018-08-08 — 11th CoC M…**: Resolution Professional informed the CoC that TTMPL wished to submit a revised resolution…

## 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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