# In the matter of Sri Srivathsa Paper Mills Private Limite dIA(IB)-2330-2020 in CP-762--2018

> NCLT judgment dated 2021-04-12. Citation: TCN-2021-NCLT-02410. The Applicants filed an application seeking to condone a delay of 381 days in relation to their…

- **Court:** NCLT
- **Order date:** 12 Apr 2021
- **Citation:** TCN-2021-NCLT-02410
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sri-srivathsa-paper-mills-private-limite-diaib-2330-2020-in-cp-762-2018-a3704b8b

## Summary

### Background

The Applicants filed an application seeking to condone a delay of 381 days in relation to their main application. The main application sought to institute an inquiry into the conduct of the Resolution Professional, declare the CIRP culminating in the acceptance of the Resolution Plan of M/s. Hi-tech Bio Products Pvt. Ltd. as null and void, and direct the restart of the CIR process. The Applicants alleged that copies of the status report filed by the Resolution Professional were not handed over to them and that they only became aware of serious flaws and mistakes committed by the Resolution Professional in the last week of October 2019. They also alleged that the Resolution Professional created a 'Chinese wall mentality' by shutting them out from accessing details.

## Facts

The Applicants, Ms. Pavithra and Mrs. Elavarasi, sought to condone a delay of 381 days in filing their main application. The main application aimed to challenge the conduct of the Resolution Professional, invalidate the CIRP culminating in the acceptance of Hi-tech Bio Products Pvt. Ltd.'s Resolution Plan, and restart the CIR process. The Applicants claimed they were unaware of the Resolution Professional's flaws until late October 2019, alleging a 'Chinese wall mentality' that prevented them from accessing crucial details. The Asset Reconstruction Company (India) Ltd., the 2nd Respondent, argued that the Applicants were ineligible under Section 29(A) of the IBC, 2016, and that their challenge had already been dismissed in MA/393/2019, with appeals also dismissed by

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## Issues and analysis

### Issue 1: Whether the delay of 381 days in filing …

**Ratio:** Sufficient cause must be shown

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**Reasoning:** The Tribunal found that the Applicants failed to provide a sufficient cause for the delay

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**Interpretation:** The interpretation of 'sufficient cause' requires a reasonable explanation for

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**Application:** The Applicants' explanation of 'administrative reasons' was deemed insufficient

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## Parties

- **Judges:** R. VARADH…; Anil Ku…
- **Appellants:** Pavit…
- **Respondents:** Srivathsa Paper…; Mr.A.Aru…

## Timeline

- **2018-11-13 — CIRP Init…**: CIRP of the Corporate…
- **2018-12-14 — CoC Consti…**: The CoC was constituted in accordance…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(24) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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